Re: Childrearing loans
So, I was wondering what other armchair-ers think about this. If it's a good idea, what are the obstacles preventing it from being implemented? If it's a bad idea, why? The big problem is that parents have no right over the future income of their children. Hence they cannot make the contract. Neither can the children themselves until they reach (legal) maturity. HOWEVER. It would be a way of financing university. And a very good one, I may add. reducinmg the need for governments to get involved in the privision of what is arguably a private good: higher education. - Jacob Braestrup ps: I believe that many south american football (soccer) stars are found in this way (ronaldo, I think, for one): rich entrepreneurs discovering young talented but poor kids, helping them, and then making huge profits later. Since I assume that the stars are discovered quite young, the entrepreneurs must have found some way around the problem of legal maturity - maybe you could look into that
Re: kinda related to other question
The advertising restrictions put in place by the settlement are a clear way in which profits prices can rise as advertising is mostly about customer stealing in the cig. industry - thus the settlement allowed collusion. Alex
Re: I'm lying to you for your own good
The classic discussion is Plato's, The Republic, on the noble lie. Alex Alex Tabarrok
Re: Childrearing loans
On Tue, Jun 04, 2002 at 01:17:25PM +0200, Jacob W Braestrup wrote: The big problem is that parents have no right over the future income of their children. Hence they cannot make the contract. Neither can the children themselves until they reach (legal) maturity. I recently saw a proposal to let children borrow against their own future incomes without the ability to make binding contracts. The idea is that they will want to pay back the loan voluntarily to avoid getting bad credit ratings. It would be interesting to see if the economics really works out. Here's the relevant part from the original message by Phil Osborn archived at http://www.lucifer.com/exi-lists/extropians/1628.html: --- No one can legally bind a kid to such a contract. However, having a viable personal trust with highly valued shares would be a huge asset - much more so if it caught on large scale - in getting further capitalization to start a business, for example. A kid could revoke his trust, but, barring unusual circumstances such as criminally negligant trustees, for example, he could expect to pay a high price in terms of lost opportunities to acquire capitalization. Few people would feel very generous toward someone who had simply welched on the people who had invested their hard-earned dollars in raising him or her, and there would be public records that would follow such a person. Because part of the Trust shares allocations would probably go to reimburse the parents for their efforts on the kid's behalf, they would have a natural interest in doing the best parenting job possible. (In fact, one of the possibilities on which I have speculated is a currency based on mutual shares in such trusts.)
Re: I'm lying to you for your own good
Chris Auld wrote: Suppose that some behavior is affected by information provided by official sources. Suppose further that by distorting or withholding information the official may change behavior in a socially desirable manner (ignore credibility issues). Should the official engage in such manipulations? ... health officials deliberately over-emphasize the dangers of smoking? ... appears to be exactly what has happened (see Viscusi JPE 1990). Does anyone know of any literature on this or similar topics? If consumers can be considered roughly rational about such things, then my paper below seems relevant. This is basically a question of cheap talk equilibria, which is basically a commitment issue. Ex post, the official can gain by manipulating, but ex ante, the official can gain by committing to not manipulating. If you can commit to always being truthful, then people will believe what you say more, which is good on average. But if you haven't committed, then sometimes you can gain by lying. --- Journal of Public Economics, 85(2):301-317, August 2002 http://hanson.gmu.edu/bandrug.pdf or .ps Warning Labels as Cheap-Talk: Why Regulators Ban Drugs by Robin Hanson One explanation for drug bans is that regulators know more than consumers about product quality. But why not just communicate the information in their ban, perhaps via a ``would have banned label? Because product labeling is cheap-talk, any small market failure tempts regulators to lie about quality, inducing consumers who suspect such lies to not believe everything they are told. In fact, when regulators expect market failures to result in under-consumption of a drug, and so would not ban it for informed consumers, regulators ex ante prefer to commit to not banning this drug for uninformed consumers. --- Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
