Re: poly: On Simple Models (Was: Why interest rates may stay low)

From: Robin Hanson <>
Date: Tue Mar 03 1998 - 13:57:57 PST

An exchange between Perry and I:
>>> If you found it plausible that investments become more and more
>>> attractive with time (over some range), by offering higher and higher
>>> returns, then you should find it plausible that the returns would be
>>> higher if investments were postponed due to property rights.
>> >You wouldn't always expect that -- indeed, you often would not expect
>> >that. For instance, if I am investing in a radio broadcast license (we
>> >will ignore whether such licensing is desirable right now), the cost
>> >of the license these days is generally nicely proportional to the
>> >expectations on the part of bidders of their likely return on
>> >investment.
>> You've completely lost me here. Care to rephrase?
>The cost of a radio station depends on how much money it makes, just
>like almost any other investment.

What does that have to do with the change in rate of return if investment
were delayed?

Robin Hanson
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614
Received on Tue Mar 3 22:34:26 1998

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