Introduction
This article deconstructs standard microeconomic assumptions, showing how seemingly rational decisions based on decision trees lead to systemic dysfunctions. We analyze why Pareto efficiency does not guarantee justice and how artificial intelligence is changing the concept of monopoly. You will learn how the elasticity of demand determines the actual tax burden and how different cultures manage risk. This is a critical look at market mechanisms in the age of algorithms, questioning the moral compass of the modern economy.
Decision Trees, Present Value, and the Prisoner's Dilemma
In modern microeconomics, a decision tree is a model of sequential choices made under the pressure of uncertainty. A key element of this calculation is present value, which uses discount rates to value future profits. The higher the rate, the more heavily the future is discounted, influencing investment choices. Attitudes toward risk create three cultural regimes: American (glorified gambling), European (insured caution), and Islamic (shared risk).
The pursuit of Pareto efficiency—a state where one person's situation cannot be improved without making another's worse—often ignores social justice. An example is the prisoner's dilemma, describing destructive market mechanisms such as price wars. A lack of cooperation means that individual rationality leads to collective catastrophe, as seen in arms races or financial crises.
Coase Theorem, Demand Elasticity, and Systemic Anomie
The Coase Theorem assumes that negotiations lead to optimal solutions; however, in the real economy, they are blocked by high transaction costs and information asymmetry. Similarly, the elasticity of demand and supply unmasks political narratives about taxes. The actual distribution of the tax burden depends on market reactions, not on who is formally obligated to pay. Companies use price elasticity as the foundation of their margin strategies, shifting costs onto consumers.
Elżbieta Mączyńska points out that such mechanisms build systemic anomie—a breakdown of norms where profits are privatized and risk is socialized. Artificial intelligence deepens this process by enabling algorithmic data control. Global platforms build digital monopolies and monopsonies, precisely extracting surplus from suppliers and customers, leading to toxic inequalities.
Algorithms, AI, and Cultural Risk Models
Modern algorithms redefine the market through real-time price personalization and customer segmentation. AI challenges the classic paradigm of rationality, replacing free choice with precise demand manipulation. Frequently applied short-term discount rates become harmful to society, as they penalize long-term investments in ecology or education in favor of immediate speculative gains.
Differences in risk approaches between the USA, EU, and Arab countries show that microeconomics must account for institutional context. Instead of blind optimization, microeconomics can become a tool for the engineering of just institutions. The challenge is to redesign decision trees to include responsibility for the future rather than just algorithmic profit, avoiding systemic dysfunction and anomie.
Summary
Can we truly revise an economic model in which the future is discounted at the expense of the present? Perhaps it is time to stop blindly following algorithmic decision trees and instead plant a new forest where the long-term common good is the priority. Microeconomics must evolve into a science of responsible action, combining technological precision with normative rightness. Or perhaps we ourselves are prisoners of the dilemma that defines our era?
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