Yesterday, I was tired and while I was playing Aisleriot, I suddenly started thinking about the Prisoners' dilemma in game theory:
Quote:
Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal. If one testifies ("defects") for the prosecution against the other and the other remains silent, the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?
http://en.wikipedia.org/wiki/Prisoners'_Dilemma
Then I thought that Subsidies are a kind of prisoners' dilemma for governments. It would be most advantageous for all governments not to subsidize industry. When only a few or even one uses subsidies it can mean that more industry settles there. But since most nations do it, it does not even make that much of a difference and other factors are more important. But it would put the government, which stops doing it at a disadvantage. Of course this commits the fallacy of grouping all companies into one group, some might prefer lower taxes to this.
However seeing that most comapies are probably as described... is there a chance to see the IMHO harmful culture of subsidy-giving cease?
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I am not a native speaker. Please contact me if I made grammatical mistakes in the posting above.
Penguins cannot fly because what cannot fly cannot crash!
10 Jan 2009, 7:54 am
