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>keeping the shares when you know they are going down is irrational too. Which is why we have insider trading laws: to make it rational again. "I know this in
by alien_at_work 9y ago
>keeping the shares when you know they are going down is irrational too.
Which is why we have insider trading laws: to make it rational again.
"I know this insider information that means my shares will be worthless tomorrow when everyone finds out. It's not rational to keep them."
"If you do that you'll go to prison."
Still irrational?
- qwerty456127 9y agoIs it rational to have laws that rationalize irrational artificially?
- alien_at_work 9y agoYes of course. As this example demonstrates in fact: the rational behavior would be to do something that hurts everyone for the sake of an individual who has privledged information. The penalty makes the behaviour we need to encourage become the rational course. I'd say a large portion of rules of society function this way for this reason.