I wish there were some examples (other than the Soviet nails) … if I had some better idea of what G and G* might actually represent, I’d be able to more easily get my head around the rest of the post.
110phil
Karma: 193
Ah, but now you’re changing the argument! In the post, you argued that it’s OK to interfere because people are being tricked (an argument for which I have some sympathy). Now, you’re arguing that it’s OK to interfere because the only purpose of the cards is to match borrowers with lenders. That, I dont agree with at all.
People choose a card for many different reasons. I can imagine people choosing to (perhaps falsely) signal their high wealth by choosing a high-rate card (their friends will assume they pay it off every month). They might choose the “trick” card to give themselves an incentive to pay on time. They may enjoy trying to “outwit” others by paying the card off on time and letting others cover the issuer’s expenses.
In a competitive market, the money the company makes by “tricks” is competed down: other cards will find it profitable to enter the market and charge less (even if they use the same “tricks”). So a larger cost is borne by those who fall for the “tricks”. Still, those people might not be happier with the tricks removed.
For instance, suppose I forget to pay on time every five years (which is probably about right). And suppose my forgetting costs $60. Now, the government comes along and decrees that, instead of charging me $60 when I forget, they’ll charge me $1 a month regardless.
I wouldn’t like that. It might be irrational, but that’s still my preference. Haven’t you, the government, done me wrong by eliminating the “trick” that I understood but chose anyway? Does my being less happy than before rank at zero on your scale of costs and benefits?
Suppose the terms “if you are even one day late with a payment, your interest rate jumps to 29.99% forever” are in very large print on the contract, and the cardholder has to read it and initial it (or, perhaps, copy it out in full!) before the card is approved.
And suppose that consumers accept those terms even after understanding them.
Would that weaken your argument?
(The reason I ask: I am fully capable of paying off my balance every month. Sometimes I forget. When I forget, it costs me $80 in interest. I am capable of borrowing money at a rate that would cost me only $10 in interest for that kind of debt.
Therefore, I see the interest I paid as a bit of a “gotcha”. But I am willing to accept it. I figure it’s part of the cost of the card, that it’s going to cost me $80 or so every few years on the rare occasions I forget.
I entered the agreement knowing that was there, and I would do so again. I figure there are indeed people out there who would voluntarily accept the “one late payment and your interest rate is 29.99%” condition too.
Maybe they think they would just apply for a low-interest card and transfer the balance, but, when push comes to shove, they’re just too lazy to do that. Or maybe they might figure that other people might forget to pay, but not them. Or maybe a host of other reasons. )
I’ve done the same thing!
Perhaps you were assuming that your net wealth was a certain fixed amount, and that if the bill had been a $5 instead of a $1, it would have meant that there was $4 less at home or in the bank.
In that case, you’re rooting only for having the right change on you, rather than having less money overall.
I’d like to see an adult child hold a grudge and use the “my house, my rules” tactic against visiting parents.
“Dad, I appreciate you and Mom coming to visit all the way from Houston. But you weren’t home by 10:30 as per the rules of this house, which I paid for. You’re grounded for two days. I’ve taken your car keys. Also, Mom, if you want to live under this roof, even for a week, you’ll stop using that Lady Grecian formula. No mother of mine is going out looking like a blonde harlot. And I don’t care if your other 64-year-old friends are doing it.”
In the community of sports statistical analysis, the most-accepted hypothesis is that coaches are reluctant to try new strategies for rational reasons. If the new strategy succeeds, they get a bit of utility, but if the new strategy fails, they get fired—and so lose a lot more utility.
Being a maverick has a negative expectation for the coach, even though it might have a positive expectation for the team.
This hypothesis makes a lot more sense to me than assuming that coaches are unaware of the result.
The “Players whose names start with K tend to strikeout more” study, is, I believe, flawed. It’s true that K names struck out more historically, but that’s because K names (Kyle, Kevin, etc.) are much more common now, when strikeout rates are high, than they were in previous generations, when strikeout rates were low.
See:
http://sabermetricresearch.blogspot.com/2007/11/k-study-for-real_26.html
This may be related … a friend once said that when she half-wakes from a dream, if she rolls over and goes back to sleep, the dream ends. But if she doesn’t roll over, the dream continues.
I believe this works for me, too. Perhaps it’s not just a change in sight, but in touch too. Or perhaps in any of the senses.
The man has done nothing shameful: (a) his life is his own; and (b) the insurance company bet, with its eyes open, that sufficient suicide-intenders would back down from their plans within two years that the policies would still be profitable. It lost its bet, but it was a reasonable bet.
The man has done nothing admirable, either; he has taken money from the shareholders of the insurance company, and given it to charity. Presumably this is something the shareholders could have done themselves, if they chose to. So from a libertarian standpoint, this is not an admirable act—he forced the shareholders to do something they didn’t want to do. Even though he did this through “voluntary” means.
However, I can see that if you’re of the opinion that it’s a good thing to take money from shareholders (who presumably are wealthier than average) and use it to save lives, then I can see how you would think this to be an admirable act.
You could also argue that the insurance company isn’t stupid: it may have sold a thousand policies to intended-suiciders, and this was the only one who went through with it. In that case, the insurance company made a profit, and this man actually had a 99.9% probability of being one of the mind-changers. Unless he had strong reason to believe that he’d be the exception, he should have realized that there was a large probability, that, like the others, he was irrationally believing that his probability was higher than 0.1%.
What he should have done was contingently committed to selling his organs on the black market before committing suicide. Then, there would have been a net benefit to his death, instead of it being zero-sum, and his actions would have been admirable.
Sorry, what is “NT”? I read this blog often enough that I feel like I should know, but I don’t.