Game Theory and Congress01 Oct 2008
How could the bailout fail to pass Congress, when it had been negotiated and promoted by the leadership of both parties? Easy, it’s the tragedy of the commons! If I may enter the head of the Representative from South Jesusland, Phil I. Buster:
“If I vote for this, my constituents who hate Wall Street (and that’s a lot of them) will hate me!”
“But if this fails, the economy could crumble, and they’ll hate me more!”
“But if vote against it, and it passes, I win both ways! Hate Wall Street? I voted against it! Economy does OK? Who’s going to remember or care how I voted? Economy crumbles? It was a bad plan anyways!”
Multiply by a few hundred Representatives with fingers in the wind and voila! No plan, Dow tanks 700.
No, this isn’t geospatial, but I find it really interesting! Like having my liver removed while fully conscious.