Prisoners Dilemma

Originally posted by Palynka
Let me give some oxygen here to Wajoma to keep this going.

In an iterated version of the prisoner's dilemma, the strong result of the one-shot version (where non-cooperation is the only possible NE) disappears. Since the world is dynamic system one can argue that the static version is a worse representation of the world.

Secondly, by Arrow's Im ...[text shortened]... nments, but they all have their flaws and can be argued to perform worse than democratic ones.

Anarchy is presumed to be ultimately evil, but is probably considerably less evil than most Statist tyrannies.

Anarchy in a relatively simple society, with cultural similarities, and moral norms would work quite well.

In a more complicated and culturally diverse society, more legal restrictions simply make more criminals who have to be locked up, and many others suffer severe limitations on their liberty due to the disapproval of others.

Way more than half of those incarcerated in United States prisons are there because some Americans disapprove of some lifestyle choice those prisoners made: gambling, prostitution, drug use.

How Anarchy or the most limited government would work can't be calculated by hypothetical formulas, primarily due to the dynamic nature of human interaction, and the number of variables in such a calculation.

Government beancounters can't ever accurately project the result of tax rate increases or decreases for relying on static calculations and ignoring human motivations.

Originally posted by telerion
I too think the setup is strange. Perhaps I'm mistaken, but it is my understanding that KN's setup does not have "everyone contributes" as an equilibrium.

In response to KN's question: it's about the marginal benefit of contributing. The rich do reap the benefits from any social externalities due to a healthier poor, but on the margin they can prob ...[text shortened]... er premium than is actuarially fair, but as a group consumers may be better off on net.

Perhaps I'm mistaken, but it is my understanding that KN's setup does not have "everyone contributes" as an equilibrium.
His setup has mandatory contributions as a first-best. His follow-up is how to make it an equilibrium.

I agree that there are many issues regarding the efficiency of health care, but the point remains that the PD is an inadequate illustration of them.

Originally posted by KazetNagorra
What alternative to government do you suggest for avoiding the PD?

Isn't government the source of the PD?

Originally posted by kmax87
Do all these models reject the notion of honor amongst thieves? Someone did mention that many people caught up in this dilemma are likely to have to continue living amongst the people they would have potentially "shopped". You would think the fear of reprisal would help people stay silent.

The other thing must be that would be felons obviously don't watch ...[text shortened]... nothing, and that the cops almost never have enough evidence to convict without a confession.

You're tainting their little perfect scenario with the random unknown variables that are part of most human interactions, and which make the dynamic not static, and which make formulas such as PD worthless.

Originally posted by normbenign
Anarchy is presumed to be ultimately evil, but is probably considerably less evil than most Statist tyrannies.

Anarchy in a relatively simple society, with cultural similarities, and moral norms would work quite well.

In a more complicated and culturally diverse society, more legal restrictions simply make more criminals who have to be locked up, an ...[text shortened]... rate increases or decreases for relying on static calculations and ignoring human motivations.

Anarchy is presumed to be ultimately evil, but is probably considerably less evil than most Statist tyrannies.
Are 'statist tyrannies' the benchmark now? 😵

Anarchy in a relatively simple society, with cultural similarities, and moral norms would work quite well.
Even if I granted you that point, then small functioning anarchies will be dominated by less scrupulous organized societies and by your definition a completely anarchic world wouldn't function.

In a more complicated and culturally diverse society, more legal restrictions simply make more criminals who have to be locked up, and many others suffer severe limitations on their liberty due to the disapproval of others.
Yep. I disapprove of homicide so I have to enforce laws that restrict someone's 'liberty' to kill others.

Way more than half of those incarcerated in United States prisons are there because some Americans disapprove of some lifestyle choice those prisoners made: gambling, prostitution, drug use.
Obviously, not all laws are desirable. And? I'm just arguing that some are.

Originally posted by kmax87
Could we ever know the answer to this "truth".

I mean would you like to drive around in a city where there were no traffic lights and you were at the mercy of whether people followed any form of consistent driving code or whether they would be responsible to stay sober behind the wheel etc. Would you want to experiment with that to know for sure?

Should ...[text shortened]... alues that has been used by the establishment to shackle good honest folk in chains.🙄

Funny sarcasm, but much of what you lay at the feet of individual choice, actually stems from government regulations, not free choice.

For example, do traffic rules ever prevent people from breaking them? They more often than not end up being a means of extracting extra cash to spread around to constituency groups.

Your second question involves licensing and permits. High levels of incompetence and malpractice exist inspite of licensing. Doctors and lawyers found unfit to practice can still move from State to State almost indefinitely continuing to practice incompetence.

A manl's good name and reputation mean a lot more to me than that he has a State license for anything.

The increase in obesity and both forms of Diabetes, can be directly related to government misinformation of foods, which are created by legislators under the influence of lobbyist, not dietitians.

And finally, our all knowing government has subsidized the growing of tobacco for decades, supplied cigarettes to GIs and got them hooked, and then punishes the cigarette manufacturers and users for their habit. In the meantime, State and Federal government alike can't live without the revenue produced by tobacco sales.

That's the record of success in dealing with social problems I want to trust?

Originally posted by KazetNagorra
[b]Parameters also exist where everyone acting in his own best interest actually gives the optimal outcome.

Indeed. So for these situations (this applies for private goods in a transparent market), government regulation is only required to enforce the transparency; i.e. governments "only" have to construct and enforce laws to prevent exploitation ...[text shortened]... tion leads to the best result for all, yet they are better off individually if they defect.[/b]

"i.e. governments "only" have to construct and enforce laws to prevent exploitation, misleading, cartels and fraud, which occur naturally in the free market.

These all exist in controlled markets as well, in fact usually flourish as black markets under control systems. For example: There is no shortage of contraband drugs in places where they are prohibited, and the prohibition may encourage the entry into marketing these products by creating economic opportunity.

As to your list of areas which are collective goods, there is no evidence that they can't be supplied by a free market.
Army: Volunteers make more motivated and better soldiers.
Police: Same as above
Energy: Monopoly of any commodity leads to stagnation, swollen cost, and poor delivery of services.
Health care: Same as above
Education: Same as above
Social Security: Same as above. Social security in the US has unfunded liabilities off the charts. If not altered it will consume all GDP in short order.

Originally posted by Palynka
How do you define a collective good?

In your opinion, why are the decisions of government officials, politicians, etc. not subject to the dilemma?

One of the flaws I just thought of was that this PD thing involves just two prisoners. Of course societal decisions, and politics involve many more people's rational decisions. Even if you expand the PD to three, it changes everything.

When en-mass voting for what is individually beneficial involves questions of benefits (government provided goodies like free health care), the cost of those services are not connected to the services provided. The beneficiaries will rationally choose more goodies, whereas the one bearing the cost may not find the choice so rational.

A Wolf, a cougar and a sheep, will differ dramatically on what is a rational choice for dinner. What is good for the collective isn't necessarily good for the individuals in it, particularly if the distribution of costs is not equal, and separated from services delivered.

Originally posted by Wajoma
Stand up comic? and a great one at that? No, I see you as a whacked out 'performance artist' who takes a dump on stage then smears doodoo on himself.

The reason I have to repeat myself is that you continue to get it so wrong. Never have said anything about nirvana, if that is what you seek, fine, do it on your own time with your own resources.

If a ...[text shortened]... hem. Some how I don't think this is what you had in mind, you're a fan of the stick method.

Learning to share, and having the force and fraud of government dictate such to you are very different things.

Originally posted by KazetNagorra
There don't have to be two agents, there can be many, which is the case here since there are many "wealthy" people. The dilemma is as follows: there are arbirarily many rich people, such that the contribution from one individual is neglegible. The options are:

Cooperate: contribute to health care and education of the poor.
Defect: don't contribute. ...[text shortened]... s too much losses in material wealth and too few gains in health care and education quality.

The "best option" is a supposition ignoring many random and dynamic variables.

This PD is unrelated to the scenario of distribution of health care or education.

If the two prisoners are one rich and one poor, the whole analogy breaks down. One is innocent and will be acquitted. The other is guilty and will be imprisoned. One benefits disproportionately from the shared consequences of confession (cooperation).

Your presumption is that government can make more effective use of the earnings of the wealthy than they can. Bill Gates voluntary charitable foundations and contributions arguably produce more good than the wealth the government confiscates from him. Besides that, the profitable operation of his enterprise generates well being and comfortable incomes for tens of thousands of people, and his products increase efficiency of hundreds of thousands of others.

Even inefficient private sector companies such as General Motors, have provided middle class well being for hundreds of thousands of families.

We have only to look to the example of public education in America, which first became federalized in the 1960s, to ask do we want the same outcomes in health care, or perhaps we ought to pursue the opposite strategy, that of privatizing education.

We spend billions on an education system which in urban areas fails to graduate over half entrants, and of those who graduate most are functionally illiterate. Do we really want to create a government health care system that says it'll treat everyone, but can't adequately treat anyone in the end outcome.

Egalitarian production and distribution produces equalized misery. I've never worried that others have more as long as I can get enough. If I could not get enough, I had to figure out how to do so. That's individualism.

Originally posted by KazetNagorra
I gave some arguments for this a few posts back.

What if their "contribution" is disproportionate to their benefit? And what if the beneficiaries contribution is nothing?

Does not this create poor incentives?

Originally posted by normbenign
One of the flaws I just thought of was that this PD thing involves just two prisoners. Of course societal decisions, and politics involve many more people's rational decisions. Even if you expand the PD to three, it changes everything.

When en-mass voting for what is individually beneficial involves questions of benefits (government provided goodies ...[text shortened]... particularly if the distribution of costs is not equal, and separated from services delivered.

The two-person version captures the essence of the basic conflict. You can expand a PD to N>2 players.

Originally posted by Palynka
Health care is excludable. Defense of universal health care can be done on many grounds, but I really don't think free-riding is one of them. I find it absurd to think the problem here is coordinating towards everybody contributing. Many wealthy would obviously be worse-off, unless there are extremely large efficiency gains from centralization. It's much less about coordination, than it is about redistribution.

Universal health care fails, for the same reasons that distribution of other commodities fail under egalitarian control systems.

Basic economic concepts are ignored, such as supply and demand, and the control that consumers exert on a market. If you give away a commodity free, there isn't any incentive for those who can't afford it to improve their situation until they can.

In electronics, when new products are introduced, for a short time high prices allow developers to recover costs, and as demand dwindles, prices drop to include more buyers in the market.

This would happen in health care, except that so many consumers are already excluded or ignore the market, because there is a third party payor, whether their employer paid insurance, or government programs. These are both susceptible to massive fraud, as well as no restraint in the utilization of services.

If someone had told me I could have a free HDTV, with a blue ray player two years ago, I'd have one. I have the HDTV, but the blue ray player will have to wait until the price dips under $100 which I predict will be about September '09.

The argument will follow that electronic goodies are frivolous options and not necessities like health care. The utility of the free market is that even in the case of necessities more goods and services ultimately reach the market at affordable prices, even though the newest remain out of reach initially.

Ignoring free market forces in favor of short term egalitarianism leads to predictable harm in the long term to the very persons that were supposed to be helped, as well as those who sacrificed for the initial gains. Shortages result from the inability to amortize r & d, and to eventually reap profits. Without the incentive of profits, investments dry up. Who will invest willingly in a non profit drug company? Controlling wages and prices of providers leads to still more market distortions, including discouraging people from investing in training for medical professions, and to those who do, seeking employment outside of the controlled environment, such as Canadian doctors, nurses and other professionals migrating to the US in droves, along with patients who can't get life saving treatment in Canada in a timely manner.

I find this argument about PD tantamount to "what would happen if bull frogs had wings"?

Originally posted by normbenign
Universal health care fails, for the same reasons that distribution of other commodities fail under egalitarian control systems.

Basic economic concepts are ignored, such as supply and demand, and the control that consumers exert on a market. If you give away a commodity free, there isn't any incentive for those who can't afford it to improve their si
I find this argument about PD tantamount to "what would happen if bull frogs had wings"?

Yet, somehow universal health care is the standard solution in the developed countries of the world and actually manages to function quite well.

It is too bad that reality doesn't reflect your dogmatic devotion to laissez faire. A less fanatical person might adjust their ideology, but hey, you're free to believe in Milton Friedman fairy tales if you insist.