Utility : Expression of subjective preference between two or more ways to acquire well-being.
Money : Measure of utility. Exchange means with the highest probability of acceptance.
Wage labor : contractual exchange of a portion of one's freedom to use a part of his life time against money. Each party seeks to secure its supply over time of convenience being exchanged . (subordination vs money) .
We learned early on that we could do more and better bearing our needs and desires by using mutual and exchange . By specializing in specific tasks and allocating tasks across multiple individuals, we make better performance. The value created is then redistributed between individuals via exchange.
Tasks and utility distribution result from negotiations between individuals in which each asserts his skills but also his power.
Generally rational individuals seeking to maximize their individual well-being would :
give the least possible effort
give the least possible of the non renewable, non extensible (yet) life time ressource
receive the maximum utiliy in return.
Economic actors develop strategies more or less sophisticated to achieve their goals.
The more an individual has power the more he will attempt to set rules for sharing tasks with minimal negotiation, while maintaining others in terms of motivation that maximizes his utility . He will also seek a redistribution of utility produced that maximizes his individual utility . Again maintaining a certain level of motivation in others is sought.
The supply security of utility is itself a utility (or meta-utility if you wish) commonly sought.
One way to acquire this security is to compel a supplier either by violence or by obtaining commitment.
A contract of paid employment is a way for two players to get a utility supply security by binding to a contractual commitment. The employer seeks to secure its supply of subordinate labor and the employee to secure its supply of money. In return each make commitments that limit their freedom. This is a tradeoff between two opposing utilities: freedom vis a vis others against security and support provided by others.
For many people security of supply is an important meta-utility that allows better enjoy multiple sources of value and achieve well-being . The absence of this security greatly reduces their welfare even in the presence of multiple sources of utility.
Individuals with greater power are aware of that and put this information to good use when sharing negotiations . Individuals with lesser power often accept unfavorable bargains.
For example an employer has less strain on his freedom of movement . He smoothes his commitment to provide a steady income using his right to cancel his involvement in certain economic conditions ( market losses ... ) .
By contrast, an employee has a more limited freedom of movement. The security of a fixed income over time deprives him of all or part of the increased wealth produced due to the reinvestment of a portion of the profits .
In addition to securing his supply of subordinate employment by contractual agreement , an employer multiplies his utility by making several simultaneous exchanges . He sells the work of many people, then distributes them some of the harvested utility. His own utility is a direct function of the number of employees.
The simultaneous exchange with several people is a convenient way to get great utility against a minimum life time spent and, often, effort .
A musician can perform at a concert a simultaneous exchange with dozens of people at once . Spectators are very happy to have spent $ 25 each and feel they have made a good deal . The musician is happy to have won $ 200 in two hours. It is a mutually beneficial exchange that poses few ethical problems , while wage labor is accepted mainly because of the imbalance of power and offers little real income security, even though many people make rationalizations about it.
From a "utility versus time & effort" yield point of view giving piano concerts is a lucrative business . Activities may have a high yield without necessarily require simultaneous exchanges . A rare and sought after talent can be redeemed against a lot of utility with little expense in time and effort. Executive coaching for example . If simultaneity is possible, this will further increase performance.
Beyond a certain return , an individual can consider that the expected income offsets the insecurity generated by the renunciation of paid employment . He became an entrepreneur.
For some people with a certain type of personality , the threshold is lower than for others. They are more likely to be entrepreneurs ( by choice) .
Some other people find that freedom by its own brings them enough welfare to offset much of the loss of security due to the renunciation of wage labor . If they had some way to meet their basic subsistence needs they would make the leap.
If these individuals are talented , it will be even easier to acquire high utility without the inconvenience of wage labor .
There are however more flexible work organizations where greater freedom is left to the workers in the management of their time and how to achieve the objectives without sacrificing the (seeming) stability of income contractually guaranteed . For some people this would be a good compromise.
Translated from french mainly by Google Translate (narraow) AI and some modifications of mine. This is still poor english. Sorry for that.
A : A complete suspension of diplomatic relations between the USA and Russia, sometime in 2023.
B : A Russian invasion of Poland, sometime in 2023.
C : Chicago Bulls winning NBA competition, sometime in 2023.
D <=> A & B
E <=> A & C.
In order to estimate the likelyhood of an event, the mind looks in the available memory for information. The more easily available an information the more it is taken into account.
A and B hold information that is relevent to each other. A and B are correlated and the occurence of one of them strengthens the probability of the other happening. The mind while trying to evaluate the likelyhood of each of the components of D takes one as a relevant information about the other hence leading to overestimate p(A) and p(B).
p(D) = p(A&B) = p(A).p(B | A) = p(B).p(A | B)
Then the mind gets it wrong is when it makes the above equation equal to either p(A | B) or p(B | A) or oddly equal to their sum, as it has been mentionned in previous comments.
The intuitive mind has trouble understanding probability multiplication. It rather functions in an addition (for correlated events) and substraction (for independent events) mode when evaluating likelyhood. p(E) for example is likely to be seen as p(C) - p(A). C is a more likely event ( even more if you live in Chicago) than A. Let say 5% for C and to be generous 1% for A.
The mind would rather do p(E) = p(C) - p(A) = 4 % which ends up making p(A&C) > p(A) ,
rather than the correct p(A) . p(C |A) = p(C) . p(A | C) = p(A) . p(C) = 0.05 % assuming A and C completely independent.
The great speed at which the intuitive mind makes decisions and assigns likelyhood for propositions seems to be at the expense of occuracy due to oversimplification, poor calculus ability, sensitivity to current emotional state leading to volatility of priority order, sensitivity to chronology of information acquisition... etc.
Nevertheless, the intuitive mind shared with other species proved to be a formidable machine fine tuned for survival by ages of natural selection. It is capable of dealing with huge amount of sensorial and abstract information gathered upon time, sorting it dynamically, and making survival decisions in a second or two.