That theory has some pretty simple implications. One is, if I learn today that smoking is going to harm me in the future, then I will smoke less—that is, people will respond to information about the future.
People will also respond to future prices. If they think cigarettes are going to be more expensive in the future, developing a taste for cigarettes is a more expensive habit, and they will have an incentive to avoid building up a smoking habit.
People will also respond to future prices. If they think cigarettes are going to be more expensive in the future, developing a taste for cigarettes is a more expensive habit, and they will have an incentive to avoid building up a smoking habit.
If we believe that junk food will stay cheap - forever 99 cents for a burger - then our addiction to junk food is more likely to persist.
Also, in the same interview a great insight into the impact of patents:
in a world in which people can make copies very rapidly, it breaks down and there’s a major decline in incentives, and you need copyrights and property right protection (or a substitute mechanism) to maintain incentives in that case.
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