[EM] Auctions

[Abd ul-Rahman Lomax]

At 02:47 PM 12/4/2008, Peter Barath wrote:
>Do you think that if we vote simply with money, the rich have
>more power than the poor? Yes, it is true. And exactly that is
>the situation right now, too.

Actually, it's not true, it depends on what is done with the money. 
Suppose, for example, the extra money provided by those who bid on a 
result is paid to those who bid differently.

Without getting deeply into it, a system might redistribute the 
payments into it by offering those against a proposal compensation 
for their accepting it.

I.e., if I prefer option A to B by some absolute preference strength, 
a payment to me of the equivalent of that preference in dollars 
should make me indifferent to A and B. You want B to happen, and I 
get A>B's worth of dollars? Fine, be my guest, enjoy. I will too, or 
at least I won't be suffering.

> > The big issue is that according to economic theory, nobody would
> > vote. If someone is in a polling booth, they have already ignored
> > economic theory and thus there is no way they are going to care
> > about a tiny probability of paying.

Has to be a real probability of paying, not a tiny probability. I.e., 
if you get what you want, you pay for it. How much do you pay? A fair 
price, determined by the market value. I.e., an auction. A million 
people paying a dollar balances one person paying a million dollars.

Suppose you are poor. How much would you pay for a government that 
makes a difference for you -- or you think it will? Having been 
there, and maybe even still being there in terms of income, I'd pay a 
significant amount. And someone more affluent might pay a lot more.

Frankly, I think you'd pay a lot. And you'd certainly pay much more 
attention to the possibilities and not offer to pay for ones that 
won't really help you.

>I feel here some mixing up economicness and selfishness. Yes, when
>I go to vote, I have so little probability to save myself from
>being killed by Nazis that even this big stake maybe doesn't make
>my voting economic. But I also save many others while hoping that they
>also save me.

Voting is a poor bet, in one sense. But we vote for other reasons. 
It's a ritual. And I won't go into Durkheim.