Wednesday, October 13, 2004
Economists are weird
Reading Alex Tabarrok on Marginal Revolution (been there yet? you should) talking about Kydland and Prescott winning the Nobel, I found this quote about the time-inconsistency problem that simply floored me for its brilliance.
Thomas Schelling once described a similar idea this way: If you are kidnapped who do you want in charge of the negotiations, your loving wife or your nasty ex-wife? Easy, right? But suppose that the kidnappers know in advance who will be in charge of the negotiations - now who do you want? See? Sometimes, nasty people do good things.If you need any further proof that economists are into weird things, you're not reading enough economics.
