Has anyone read the article summarized in The Economist ("Are People Willing
to Pay to Reduce Others' Incomes?", in the February issue of Annales
d'Economie et de Statistique)?Based strictly on the text of The Economist's article, it seems that the players were in fact attempting to maximize their income. There was a fixed supply of money involved in the game, which was initially divided equally among the four players. Players could each pay to reduce the money of other players. But it only cost each player between 2 and 25 cents to reduce another player's money by one dollar!!! Since the amount of money in the "economy" here was fixed, paying 2 to 25 cents to reduce another person's wealth by one dollar sounds like a pretty good investment decision to me, in effect raising one's own wealth by between 75 and 98 cents. Is this right? Eric McDaniel Graduate Student, University of Tulsa ----- Original Message ----- From: "fabio guillermo rojas" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, February 20, 2002 10:52 AM Subject: Economics of rank vs. Economics of the most money This week's Economist magazine reported an experiment where subjects could pay to decrease the income of other subjects in the experiment, which they did with some frequency, although it didn't increase their income from the experiment. The article's author suggest that this was evidence for people's desire to put others down, even when they incur the costs of doing so. Question: How would economic theory change if we assumed that people would are trying to maximize their relative rank in a group, or had a taste for decreasing other's utility? Fabio
