Now that I'm back from a week of other interest...
On Sun, 12 May 2002, Tim May wrote:
> An interesting situation in Choate Prime, the world that exists
> parallel (but out of kilter) to our own.
>
> However, here on Earth, non prime, the recipient of a credit card
> payment is the one who pays the 1-3% transaction charge. The payer pays
> nothing.
Bullshit Tim. The card holder (person paying) has an interest rate tacked
on their payments -EVERY MONTH-. It's right there at the bottem of your
statement.
Now, let's talk about the 1-3% transaction charge and who -actually- pays
it. How do you explain 'cash discounts'? I'll tell you how chucklehead,
the individual vendors crank their prices up 2-5% to compensate. Why?
Because -most- people use credit cards even for small purchases like soft
drinks and hamburgers.
Now this segues right into that oft repeated (and completely wrong I might
add) CACL statement about 'the payer pays everything'. What is wrong with
that statement? It violates a prime basic tenent of both economics and
game theory. What might that be?
Independence of transactions.
There -is- a distinction between individual -contests- and the -game- as a
whole (without even getting into iterated games). Something this view
completely breaks. It creates a reduction to absurdity and eliminates the
ability to make distinctions in the market. Why?
Because it reduces the market to a single player, payers.
Poor economics and game theory. You'd think you'd know better.
--
____________________________________________________________________
A witty saying proves nothing. Voltaire
[EMAIL PROTECTED] www.ssz.com
[EMAIL PROTECTED] www.open-forge.org
--------------------------------------------------------------------
