Newsgroups: bit.listserv.politics
Date:         Tue, 6 Oct 1992 16:33:05 EDT
From:         Jamie <PL436000@BROWNVM.BITNET>
Subject:      Re: a lengthy precis

Well, this one is shorter.

>From:         ZIMMERJ@WABASH.BITNET

>And I responded that since firms make their decisions on a firm-by-firm basis,
>they would still not choose to discriminate (each has incentives to undercut
>the agreement, even though every firm would be better off by sticking to it).
>As your record undoubtedly shows, I argued this several posts before your last
>one.  And it was not answered, other than by restating the hypothetical example

First, it isn't clear what Jason means by "several posts before your
last one," since in fact he only sent one. So I guess he means that
he gave that argument in his only post.
In any case, I did answer the argument.

>>I did give an argument to show why discrimination would be
>>profitable, and every single participant in the discussion
>>off-line (there were 8 others besides Jason and me) understood
>>my explanation... except Jason.
>
>I completely understand your explanation.  You claimed that it is in firms'
>collective interest to discriminate.  And I argued that collective interests
>don't matter and that only indivdual firm's interests matter.

In fact, what I said was that as long as the convention is in force,
the collective interest in question DOES translate to individual
interest. That is the POINT of a convention.

>>                                               (Jason had
>>asserted that unions can never prevent scabs from taking over
>>their jobs during strikes).
>
>I don't recall saying "never."  I might have said "almost never," but probably
>not "never."  In any case, I'll agree that I am certainly wrong if I said
>"never," since absolutes are seldom true, expecially in this case.

What you said was:
"Labor unions were unable to muster the power to stop scabs without
government intervention."
Maybe you meant, "usually."

>>Well, how about this. I am perfectly willing to let some other
>>student of economics on this list adjudicate.
>
>Fine by me.  The question is "does discrimination impose opportunity costs upon
>firms?"  My answer is yes, it does.  Responses, anyone?

No, the question is not whether it imposes opportunity costs. The
question is whether the opportunity costs it imposes are ever
outweighed by advantages of discriminating.
Nice try, though.

>Or, in other words, if every firm abided by the convention, they would all do
>well.  However, if one firm then breaks the convention, it increases its
>profits even more since the firm gains a lot (larger labor pool) while losing
>virtually nothing (since firms have no concrete ability to "punish" the
>offending firm).

I explained the method for "punishment." I also explained that there
is another incentive to maintain the convention, namely, that it is
in the LONG run interest of firms to do so.

>And yes, it is question begging to say "the covenant will occur because it
>exists."

That certainly WOULD be question begging. Now let's see if you can
find someplace where I said that.

>If you want to test who's falsifying (I for one was willing to concede that
>Jamie was merely mistaken as opposed to lying), look this stuff up in the
>archives.  Then we can settle this credibility issue right now.

Fine. However, since YOU are claiming that I said certain things, and
I deny that I said them, it will be useless for ME to search the
archives. So search away.

>Now this would be interesting, since it would actually adress some of my
>arguments.  Please explain.

Meaning, explain the solution to iterated prisoners' dilemma.

Ok.

Kerry has alluded to it. It turns out that if agents will meet
each other in prisoners' dilemmas repeatedly over time, there
is an almost trivial solution. The strategy "tit for tat"
is an extremely robust and stable one, impossible to exploit,
and virtually impossible to "invade" (in evolutionary terms).
The strategy is simply this: do in meeting n whatever the other
player did in meeting n-1.
There is a large literature on this subject. The seminal work
is by Robert Axelrod, _The Evolution of Cooperation_. Axelrod
gives some examples of tit-for-tat at work in real life. Tit-for-tat
serves to enforce conventions (at least that's one way of looking
at it).

>That same grad student (I assume you mean Jimbo) ALSO said that you're hypo
>does not correspond to real life.

In fact, he did not.
Well, to check this, I can either send the entirety of Jimbo's response,
or we can just ask Wales himself.

Jamie
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