RE: Economic Concepts #3 - Substitutes vs. Complements
I'm loving this series, @spectrumecons!
Once we learn to see things in terms of complementarity and substitutability, we can see so many other phenomena in a new light:
Personally, I like thinking about beliefs and inferences as mental tools that can be analyzed in this way. 'X' and 'not-X' are strong (maybe even perfect) substitutes for each other. 'If P, then Q' means that Q is a strong (maybe perfect) complement to P. But this does not necessarily mean that P is just as good a complement to Q.
Inter-personal power can also be analyzed in this way: A powerful person in one that functions as a strong complement or pre-condition to other people's well-being but has few if any substitutes to challenge his/her position.
While my ideas aren't completely clear on the subject, it seems like substitutability is simply another word for "zero-sumness" while complementarity means "non-zero-sumness"... But my convictions on this point and quite negotiable. (I'm open to substitutes!)
Thanks @paradigms.lost. It is important to understand the use of complements and substitutes for many reasons.
I understand what you mean by substitutability and 'zero-sumness'. For perfect substitutes it is either one or the other. In many cases the lines are a little blurred. Perfect substitutes are unusual. Most substitutes offer similarities which are sufficient to act as functional replacements.
100% agree