Re: [tlug] Open-source Japan

[Gernot Hassenpflug <aikishugyo@example.com>]

On Thu, Mar 5, 2009 at 9:09 AM, Curt Sampson <cjs@example.com> wrote:
> On 2009-03-04 16:29 +0900 (Wed), Stephen J. Turnbull wrote:
>
> On 2009-03-04 17:15 +0900 (Wed), Stephen J. Turnbull wrote:
>
> Let me be more clear about what I am trying to say. /../ My opinion
> is that, to make markets most "fair," we want first to minimize
> false information believed to be true, and after that maximize true
> information known to be true. /../

I woulkd say that for any individual this is true in some limited
aspect: but resources being scarce, an individual will have to
prioritize, and value truth in some things more than in others. Having
to pay for someone's else's extra truth via regulation taxes would be
grossly inefficient use of money I would think.

> /../ and buyers a) become more reluctant to take the risk of buying,
> and b) spend more money on verifying information, leaving less to make
> actual purchases.

I.e., A lemon's market? (BTW thanks Prof. Turnbull for pointing out
that "the market itself is one such kind of service" in an earlier
post. I'd be interested to hear what kind of environment is required
to obtain such a market, and what are the best methods to allow such a
market to change to a different type.

> So the best outcome for the group is to be absolutely honest. However,
> in a classic game theory problem, being absolutely honest will not
> necessarially lead to the best outcome for the individual. In some
> cases, the best outcome will come to an individual only if others
> co-operate; in other cases co-operation of others doesn't even matter,
> fraud will always produce a better outcome (in the short run) for that
> individual regardless of the circumstances. (In the long run, the
> individual's progeny are likely to lose out because of the way a lot of
> this hinders economic growth.)
>
> This is essentially an argument for regulation.

Hmm, just a wild thought: if rule of law, high regard for private
property rights, and voluntary exchange (use of force basically
abrogated) allow, with enough effort expended, all true information to
be eventually found out, then could one expect, in the long run, that
entrpreneurs will expend rationally as much resources to obtain truth
as they feel is warranted (cost/benefit-wise). In other words, trading
off truth and risk based on cost is rational market behaviour... or
not? I'm not competent to argue for or against regulation, or how much
(like price, I imagine there is no "fair" amount of regulation).
-- 
Gernot Hassenpflug