4/15/2005

Everyone Deals With The Prisoners Dilemma

Prisoners No More: State Investment Relocation Incentives And The Prisoners Dilemma talks about states facing the prisoners dilemma of whether to offer relocation incentives to intice people to move there or not. The dilemma that states face is, if they offer incentives another state is going to do the same and how far should they go. Each state is trying to improve their economic position but if they conitnue to offer more incentives the benefits are going to become less. Thus, they would have been better off if they hadn't offered any incentives.

3 comments:

Dr. Tufte said...

-1 on Sam's post for spelling errors.

This is the case with all forms of incentive policies to attract business. The localities optimal choice is to give things away that they need paid for.

The best solution for this is for the federal government to make this practice illegal, or to strongly discourage it in some other way.

carter said...

Dr. Tufte said that the best solution for this is for the federal government to make this practice illegal, or to strongly discourage it in some other way. It is too bad the government picks some of the battles it chooses and does not pick other ones.

Dr. Tufte said...

Agreed. I'd like to see a lot more focus on promoting movement out of prisoners' dilemmas.