100 Economics Question of the Day: An Intermittent Blog: October 2006

Saturday, October 28, 2006

A Footnote for the Ages

With a hat tip to Greg Mankiw via David Friedman, comes this from Todd Kendall's "Pornography, Rape, and the Internet" (PDF):
35 On the other hand, as discussed earlier, more dating also means more opportunities for date rape.

posted by Ken Houghton at 13:11 0 comments

Monday, October 16, 2006

If We Were All Rational, would everyone be speeding?

Thought-experiment: assume that all cars work perfectly, that law enforcement is not absolute, and that people are strictly rational. Would not one then conclude that the optimum speed i at which one should drive, given p(x) as the probability of receiving a ticket for speeding and s(x) is the level of the speeding fine, is:



Given that p(x) at i=56 <> 1, no rational driver would drive at or below the speed limit.

The proximate reason for this thought is the exchange between Mark Pauly and Kenneth Arrow on the matter of "moral hazard," in which both appear to conclude that social stigma alone are not a matter of governance.

posted by Ken Houghton at 23:27 1 comments