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Kipling’s game theory lessons for Greece

In the dollar bill auction, one party eventually scores a pyrrhic victory and takes possession of the dollar bill. Both parties lose, but the smaller loser is the person who sticks out longest. That is not usually the rational player.

A ban on touts will not fix a rigged game

The present systems of ticket allocation have much more to do with the maintenance of networks of patronage than the carefully targeted allocation of seats to “genuine fans”.

Why the winner’s curse could hit complex finance

In financial markets, the more complex the instrument, and the more uncertain the outlook, the greater the likely range of views of common value. More often, trading puts assets in the hands of those who think the assets are more valuable than they really are.

Nobody wins when there are too few taxis

Most bad economic policies can be abandoned, but the harmful effects of restrictive licensing systems are usually irreversible. By illustrating the flaws of taxi regulation, John explains why governments and licensing authorities should think twice before being caught in a transitional gains trap.

On John Kay’s Bookshelf – Archive page

Books that John has reviewed in the past…

Of gas and cell phones

The alleged success of the British mobile phone auctions in raising revenue for the government poses many questions about the desirability of licences and auctions in general. John’s article examines the underlying logic of auctions and suggests that the current enthusiasm may be misguided

Beauty and the bidder

Should scarce assets be allocated by auction to the highest bidder or by a beauty contest of suitable applicants? From FIFA’s decision on where to hold the World Cup to the ways in which European governments assign mobile phone licences, the choice of process is the economic issue of the moment.

Cloud cuckoo land’s costly logic

The mobile phone spectrum auctions are part of a long tradition of governments deriving revenue from allocating scarce resources. In this case, no juster tax has ever been imposed.