From: Lee Corbin (lcorbin@tsoft.com)
Date: Sat Apr 19 2003 - 22:29:46 MDT
Rafal writes
> > > ### According to game theory, certain strategies are
> > > inherently unstable due
> > > to the coordination problem. Forced coordination,
> > > as in legislation to impose a monopoly bargaining
> > > entity in the form of labor unions, or to stop
> > > individual bargaining for wages, does solve the
> > > problem, which is why immediately after the imposition
> > > the law there is an increase in income to
> > > the beneficiaries of the law (as in unionized workers).
> >
> > I don't know what this BS about coordination is all about,
> > but I do see that you are pointing out that for a particular
> > set of workers, their wages will go up if it's mandated some
> > way, or they achieve it some way through bargaining.
>
> ### You might want to read about the coordination problem at
> http://william-king.www.drexel.edu/top/eco/game/game.html.
>
> The "queuing game" is quite enlightening.
Yes, that's fun. (There are many obvious things that airlines
could do that would minimize discomfort, although I believe
that people are sufficiently irrational that most of them
would not be accepted by the herd boarding the planes.)
> Formation of an effective monopoly does increase
> the potential income of the monopolist compared
> to a competitve equilibrium. This is uncontroversial, I
> hope?
Yes, with stress on "potential". It's not so clear that
in practice monopolies are as bad as is commonly thought;
Rockefeller, for example, might not have been able to
maintain his if gouging had been his objective.
> > Okay. But what about the following *immediate* effect:
> > if all the janitors in the U.S. get their wages doubled
> > overnight, then [more janitors are *immediately* without
> > jobs]. Likewise, if all unions were busted tomorrow (by
> > equally magical fiat), then the total number of employed
> > persons would *immediately* go up. Right?
>
> ### Not immediately in the latter situation.
> BTW, you don't need to "bust" labor unions,
> merely abolish the laws that mandate their
> formation.
What is the technical definition of "busting" a union? ;-)
Lee
> Most labor unions would go out of business pretty quickly.
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