Nobel Prize Economists Say Free Market Competition Rewards Deception and Manipulation
.. our free-market system tends to spawn manipulation and deception. The problem is not that there are a lot of evil people. Most people play by the rules and are just trying to make a good living. But, inevitably, the competitive pressures for businessmen to practice deception and manipulation in free markets lead us to buy, and to pay too much for, products that we do not need; to work at jobs that give us little sense of purpose; and to wonder why our lives have gone amiss.
.. (In Navada) the average adult spends 4 percent of income on gambling, nine times the US national average
.. It is about getting people to do things that are in the interest of the phisherman, but not in the interest of the target. It is about angling, about dropping an artificial lure into the water and sitting and waiting as wary fish swim by, make an error, and get caught.
.. However, unregulated free markets rarely reward a different kind of heroism, of those who restrain themselves from taking advantage of customers’ psychological or informational weaknesses. Because of competitive pressures, managers who restrain themselves in this way tend to be replaced by others with fewer moral qualms.
.. For others, it occurs at rites of passage: such as weddings (where the wedding mags assure brides that the “average wedding” costs almost one half of annual per capita GDP)
.. In some 30 percent of home sales to new buyers, total— buyer plus seller— transaction costs, remarkably, are more than half of the down payment that the buyer puts into the deal.
.. Phishing for phools in financial markets is the leading cause of the financial crises that lead to the deepest recessions.
.. The average four-year gain was 3.35 pounds (translating into a twenty-year gain of 16.75 pounds). Statistical analysis associates the 3.35-pound gain with 1.69 pounds for potato chips, 1.28 pounds for potatoes (mainly French fries), and 1 pound for sugar-sweetened beverages.
.. As a result of this censure and self-censure, the fraction of smokers in the United States has fallen by more than half since the bad old days when people who should have known better were arguing that smoking really was good for your health: it helped you lose weight.