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September 30, 2008

Game Theory and Corporate Fear

Interesting to see that so many companies with nothing to do with Wall Street, banking, or trading all got off their asses and began shouting at Congress today. Stories are everywhere about people like Microsoft's Steve Ballmer finally realizing that Congress wasn't going to get the urgency of the current credit market problems without prodding from companies perceived to well away from the financial nexus.

It's classic example of game theory and externalities. Keep your own credibility by hoping a squeaker vote goes thru, only to find out that the other side was so noisy and strident that your message -- that this is a big issue affecting far more people than anyone seemingly understands -- didn't make it through and the vote failed by a tiny amount. A big, big miscalculation by companies across America.

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