rhanson@gmu.edu said:
> I don't think you understand my concern yet. [...]
> 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?
I'm explicitly assuming that at least some of the potential do-gooders
will be incented to do good by having bought low-priced bonds with the
ability to make the claim come true. If everyone is only betting on the
action from the sidelines, I would agree that it's hard for do-gooders to
make a difference by investing. They make a difference by choosing a
market to invenst in in which they can change the outcome.
Chris
---
Chris Hibbert It is easy to turn an aquarium into fish soup, but
hibbert@netcom.com not so easy to turn fish soup back into an aquarium.
-- Lech Walesa on reverting to a market economy.
http://discuss.foresight.org/~hibbert/home.html
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