----- Original Message ----- From: "Fred Foldvary" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Friday, November 02, 2001 9:25 AM Subject: Re: Tax with positive growth effect
> > Whereas if there were no tax (i.e. if it was voluntary), individual > businesses would be reluctant to use their money that way, even if > they knew that everybody would be better off if everybody invested > their share into the collective fund > > (prisoner's paradox). > > Gustavo > > Does the prisoners' paradox not disappear when the game is on-going > and the participants may communicate? Why would a trade association > with mutual benefits not work? > The prisoner's dilemma does not tend to disappear when there are many participants. It pays off to be a leech. If there are enough leeches, participation in a trade association may cost too much for the benefits it provides. It would be more beneficial to not participate in the trade association and reap the benefits anyway... in this case, the people who do participate end up paying for the ones that don't. Again, this is because the return is collective while the investment is invididual. (unless we have a mandatory investment, i.e. a tax) Gustavo
