Economics & Self-Interest

I have been ploughing (slowly, painfully) through Amartya Sen's "The Argumentative Indian". A related wiki search led me to an interesting clip:

The absurdity of public-choice theory is captured by Nobel Prize-winning economist Amartya Sen in the following little scenario: "Can you direct me to the railway station?" asks the stranger. "Certainly," says the local, pointing in the opposite direction, towards the post office, "and would you post this letter for me on your way?" "Certainly," says the stranger, resolving to open it to see if it contains anything worth stealing.
--Linda McQuaig, All You Can Eat

Clearly, he was making good use of pejorative rhetoric and sophistry (deceptive reasoning). But one question led to another and here is the days collection of interesting terms:

PUBLIC CHOICE THEORY studies the behavior of voters, politicians, and government officials as (mostly) self-interested agents and their interactions in the social system. It is the use of modern economic tools to study problems that are traditionally in the province of political science.

POSITIVE ECONOMICS sometimes defined as the economics of "what is", whereas normative economics discusses "what ought to be". It focuses on facts and cause-and-effect relationships to identify a problem or suggest how a system could be improved by changes in rules .

RATIONAL IGNORANCE: Ignorance about an issue is said to be "rational" when the cost of educating oneself about the issue sufficiently to make an informed decision can outweigh any potential benefit one could reasonably expect to gain from that decision, and so it would be irrational to waste time doing so.

PUBLIC GOOD is a good that is non-rivalrous and non-excludable. Consumption of the good by one individual does not reduce the amount of the good available for consumption by others;

BUDGET-MAXIMIZING MODEL argues that rational bureaucrats will always and everywhere seek to increase their budgets in order to increase their own power, thereby contributing strongly to state growth and potentially reducing social efficiency. This is an influential new stream of public choice theory and rational choice analysis in public administration inaugurated by William Niskanen, in 1971.

RENT SEEKING occurs when an individual, organization, or firm seeks to make money by manipulating the economic and/or legal environment rather than by making a profit through trade and production of wealth. Eg,: A farm lobby that seeks tariff protection or an entertainment lobby that seeks expansion of the scope of copyright.