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This is a very common theme with labor laws. Most people are very, very bad at predicting second- or higher- order effects of a regulation. If the market encour
by wyager 10y ago
This is a very common theme with labor laws. Most people are very, very bad at predicting second- or higher- order effects of a regulation. If the market encourages some behavior one doesn't like (like firing people), it may be the case that one is simply too myopic to comprehend whatever large-scale stochastic optimization the market is doing, and what's going to give when one stops that optimization from happening.
As a result, many (most?) well-meaning market restrictions end up hurting more than they help, often in indirect and difficult to quantify ways spread out over thousands of different interactions. This (friction introduced by the inability to fire people who should be fired) is actually one of the easier examples to point to.
- vyodaiken 10y agoPeople are bad at predicting effects. Absence of market regulations can also have bad effects.
- monk_e_boy 10y agoIr reminds me of all the weird policies regarding programmer pay vs performance that I've seen. Get a bonus for most bugs fixed? Lots of bugs produced, logged and fixed. Get a bonus for bug free code? Very little code produced. I do think for economics a more detailed simulation is needed in which we can try different laws before they passed.
- deleted 10y ago[deleted]
- sokoloff 10y agoThe problem with simulation for testing is that it requires creativity. Creativity of a distributed set of actors, each acting in their own (perceived) self-interest and trying to find exploits. If you program a simulation with the same type of thinking used to draft the law, assuming that people will employ and comply with the law "as intended", you're liable to fall prey to an exploit that you weren't creative enough to think about, else you'd have (possibly) addressed it in the law.