Re: taxi transitional gains trap
Huge coordination problems, aren't there? -- Mark Steckbeck Assistant Professor of Economics Hillsdale College Economics Department 33 E. College Street Hillsdale, MI 49242 (517) 437-7341 [EMAIL PROTECTED] On 7/26/02 2:50 PM, Bryan Caplan [EMAIL PROTECTED] wrote: Is there really a transitional gains trap? If a majority of NYers seriously wanted free entry in cabs, wouldn't it happen regardless of the opinions of cab companies?
taxi transitional gains trap
Here is an interesting plan to get out of NYCs transitional gain trap regarding taxi medallions. Basically the author suggests buying out the current medallion holders and selling taxi-cab licenses on an open basis. I think his numbers don't add up but this might make an interesting microeconomics exercise for students perhpas in conjunction with Tullock's paper on the transitional gains trap. http://www.city-journal.org/html/12_2_how_to_fix.html Alex -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED]
RE: taxi transitional gains trap
Bryan Caplan: If a majority of NYers seriously wanted free entry in cabs, wouldn't it happen regardless of the opinions of cab companies? Sure it would -- if your definition of seriously includes are willing and able to put enough pressure on the relevant city officials to both persuade them and to overcome the vigorous opposition of incumbents. Michael E. Etchison Texas Wholesale Power Report MLE Consulting www.mleconsulting.com 1423 Jackson Road Kerrville, TX 78028 (830) 895-4005
Re: taxi transitional gains trap
Is there really a transitional gains trap? If a majority of NYers seriously wanted free entry in cabs, wouldn't it happen regardless of the opinions of cab companies? Prof. Bryan Caplan Uh-oh. The Median Voter Theorem rears its ugly head again. Couldn't we just say that taxi cab owners are a small well organized group with huge incentives for the status quo, while NYers are a large group with weak preferences? Ie, why can't just invoke Mancur Olson here? Fabio
Re: taxi transitional gains trap
Bryan Caplan wrote: If a majority of NYers seriously wanted free entry in cabs, wouldn't it happen regardless of the opinions of cab companies? Bryan is gently pointing out that my assumptions may be inconsistent with my earlier posts on democracy. Nevermind, I contain multitudes. It does seem, however, that this is a good case of concentrated benefits, diffuse costs. In addition, there are serious constitutional issues involved in opening the market to free-entry because this would probably constitute a taking. Thus the cab companies have the motive and means to prevent entry. Of course, there's no denying a majority if it really wants something - even the constitution can be overriden (does anyone remember that little thing about Congress having the power to declare war?) - but in this case the public doesn't care enough about the issue to overcome the cab companies at their most powerful but it might care enough to overcome the companies if their opposition was diminished by a buyout. Alex -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED]
Re: taxi transitional gains trap
Alex Tabarrok wrote: . . . In addition, there are serious constitutional issues involved in opening the market to free-entry because this would probably constitute a taking. . . . How about this? Every day from now on, the city must auction off one new taxi medallion, no minimum price. Does the announcement of such a plan constitute a taking? -- Anton Sherwood, http://www.ogre.nu/
