Theory of Equality: A Behavioral Perspective of Newton’s Third Law of Motion
It is a very famous third law of Newton as formally stated, “Newton’s third law is: For every action, there is an equal and opposite reaction.” For example in science we often read this example If an object A exerts a force on object B, then object B must exert a force of equal magnitude and opposite direction back on object A. In math’s’ terms it is exemplified as The third law states that all forces between two objects exist in equal magnitude and opposite direction: if one object A exerts a force FA on a second object B, then B simultaneously exerts a force FB on A, and the two forces are equal in magnitude and opposite in direction: FA = −FB.
An Economic Perspective of Newton’s Third Law of Motion
Every economic perspective can be understood as a transaction. A transaction is referred to as a buying or selling mechanism through which a buyer gives money (medium of exchange) and buys the desired good. Here, money is considered something of value which is earned (output) after giving input (services, energy, time, cognitive or mental service, any good, etc.) (Lee and Park, 2013). This transaction must have equal worth both sides. For this, we formulate an equation following the law of Newton.
A = B + ε
Here A refers to a good/service that is bought against the exchange of equal money; however, we have put error term with B, which refers to any other discrepancy. For example, a boy goes to a shop and buys a coffee cup of 1 dollar. So that cup of coffee must worth 1 dollar. However, if the seller underweighted the amount of coffee or mixed some water instead of milk or unpurified other ingredients, then the error term reflects that discrepancy. If the seller made the corruption of 0.2 cents, then the error term is 0.20. Thus, we form a new equation.
A (1$) = B Coffee (0.8$) + (0.2$) ε Corruption
Thus, equation results indicate that both sides equal similar to Newton’s Third Law of Motion. The above model is very simple and easy to understand. However, in this complex financial world where from a simple transaction to the stock exchange, the same principle applies. For example, when we buy vegetable in the market, the rate of vegetable frequently change due to various factors. Among the major factors can be the law of demand and supply, government role, and others which we call the error term. For example, today you went to the market and bought a dozen eggs against the amount 3.8 dollars; however, next week when you went to buy one dozen of the same eggs, you paid 5 dollars which means 1 dollar extra for the same number of eggs; but why? There can be various possible answers to this question. You might have paid extra money to seller due to higher demand, less supply, the personal gain of the supplier, government taxes, etc. now we argue that the one extra dollar that you paid might have gone into the treasure of government or pocket of seller or supplier. Less supply could be due to the factor that hens might have died, not given eggs or some other reasons, which imply that your loss of 1 dollar is caused by some external factor that exists in the environment. Perhaps some hens might have died due to the carelessness of owners of hens or some disease might have deteriorated the strength of hens which reduced growth in egg production due to which you lost your 1 dollar. The purpose of this explanation is that you lost your dollar due to either deficiency, mistake or some extra measures. In the end, the economic equation is equal on both sides.
Lee, H.S., Park, J., 2013. Deductive Reasoning to Teach Newton’s Law of Motion. Int. J. Sci. Math. Educ. 11, 1391–1414. https://doi.org/10.1007/s10763-012-9386-4
Perception 