Chris Hibbert wrote:
> > Thus the only way do-gooder buyers can make a net profit is by tending
> > to buy more bonds in this initial auction when their private info says
> > they expect to do good, and fewer bonds when their private info says
> > otherwise.
>Okay, let me try to understand. Are you assuming that the do-gooders
>aren't changing their behavior depending on how much of the bonds they
>buy? ... They make a difference by choosing a
>market to invest in in which they can change the outcome.
No. I assume that they do sometimes change their non-bond-market behavior
in ways that helps the social policy, but this doesn't help them unless
they also have private info about whether they will help, and buy more
bonds when they privately know they will help.
Robin Hanson firstname.lastname@example.org http://hanson.gmu.edu
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323
This archive was generated by hypermail 2b30 : Mon May 28 2001 - 09:56:24 MDT