- Title
- Inflation as Prisoner's Dilemma: The Case for Mandatory Wage-Price Controls
- Author(s)
- Shlomo Maital Shlomo Maital (Princeton University)
- Yael Benjamini Yael Benjamini (Princeton University)
- Abstract
- Behavior toward uncertain future inflation gives rise to large diffuse externalities which result in market failure and require introduction of legal restraints -- mandatory wage-price controls. Models of wage-profit conflict and consumer vs. consumer rivalry are set out in which individual rationality leads to collective ruin (the so-called Prisoner's Dilemma). Evidence from national sample surveys indicates broad-based support for controls, and suggests some people do perceive the externalities generated by inflation.
- Creation Date
- 1979-11
- Section URL ID
- IRS
- Paper Number
- 131
- URL
- https://dataspace.princeton.edu/bitstream/88435/dsp01cn69m413t/1/131.pdf
- File Function
- Jel
- L88
- Keyword(s)
- Suppress
- false
- Series
- 1