"Night after night the faculty and students of King’s, armed with shovels, took it in turns to man the roof of the ornate Gothic chapel, whose foundation stone was laid by Henry VI in 1441. The fire watchmen of St. Paul’s Cathedral in London had discovered that there was no recourse against an exploding bomb, but if an incendiary could be tipped over the edge of the parapet before it set fire to the roof, damage could be kept to a minimum. And so Keynes, just short of sixty years old, and Hayek, Read More
Prisoner’s Dilemma
The Prisoner’s Dilemma is one of those classic illustrations that economists use to describe an issue. Imagine two criminals arrested for a crime but kept in separate cells. If each remains silent, the police have no proof for conviction. If one rats on the other, he may get a lesser sentence. However if both tell, they both lose by getting harsher sentences than if they had remained quiet. We have a situation similar to the Prisoner’s Dilemma in the currency market. Earlier, I have written Read More