Economic Development Deals Are a Curse, Not a Blessing
As states periodically consider renewing and increasing economic development incentives, they would do well to consider the problem of the Winner’s Curse. The Winner’s Curse is a common result of competitive auctions, where the bidder who “wins,” say, a used car, is overly optimistic about its condition and value and thus overpays for it. Congratulations, […]
A tale of two banks
What does it mean to say something is risky? How would we know? Would a failure confirm the view that a particular activity was risky? Consider two people gambling at roulette. Joe puts $100 on each number from 1 to 35. Jane puts $3500 on number 36. Both have bet $3500, and both bets have […]
Inconvenient View, Free Press Edition
Scott Sumner recently posted on the importance of holding views that are inconvenient to your larger beliefs. I agree – it’s important for good intellectual hygiene to be aware of these things. In his excellent book Governing Least: A New England Libertarianism, Dan Moller makes a similar point, using constitutional law as a framing device: […]
