“Are those who know equal to those who know not?” Even if both of them are wrong, they are not the same. It’s safer to be (with) the ones who reach conclusions based on sound knowledge. Even when they’re wrong they’re not far away from the the truth. Their efforts are rewarded and rewarding.
“Do you believe in part and reject the rest?” This can happen when conclusions have been reached and then (only) supporting evidences provided. Sound knowledge means comprehensive understanding.
The debate about BLT and its effectiveness gets me thinking. Probably, one of the most common mistake of policy making by populist-leaning decision makers is to generalize a micro experience and mold it into a macro policy. Of course it doesn’t have to be a first-hand experience. With the social and geographical gaps so wide, the number of personal experiences is small anyway.
The main culprits of influence are the news media through no fault of their own. The common “dog bites man” phenomena won’t make any news headlines. Instead, a compelling experience, especially if there are several similar ones, gets repeated through news cycle by different media. After a while the exception becomes the rule.
It goes without saying that exceptions are important in making decisions. Rawls would say that the policy should be designed to benefit the least-advantaged the most. I concur, if those benefits are weighed against the costs “properly” for everyone over period of time (not just here and now). Proper analysis can be done through accurate data gatherings and honest statistical readings.
I must applaud SBY’s decision to raise fuel price as a matter of policy. Politically, this decision is very unpopular, at least for now. The popular pressure to keep the price at its current level would be very happy to support him if he gives in.
Politically, SBY must be pretty sure that not only this policy will work, but also it will give him results relatively quickly, before 2009 election. Then, he has to hope that the voters can connect the change in their situation to him. Voters don’t have long memory, and 3-4 years is a long time in political time.
His decision might also be based on the prediction that the current economic situation cannot sustain itself for extended period of time. Again, the period is about 3-4 years. Otherwise, he could hang on to the popular support until after the next election, before inflation and other negative effects of fuel subsidy take over.
Update: Aco agrees with me, with better economic analysis.
Equilibria when actions are taken after knowing own type but not the others’:
- Dominant: Best response to every collection of actions of the other players knowing all types (ex post).
- Ex post: Best response to every equilibrium actions of the other players knowing all types (ex post).
- Bayesian Nash: Best response to every equilibrium actions of the other players knowing own type (interim).
- Ex ante: Best response to every equilibrium actions of the other players knowing no types (ex ante).
Dominant => ex post => Bayesian Nash (interim) = ex ante almost surely.