Unbridled Deregulation and the Hunt for Profits
What a great juxtaposition of articles on your Feb. 13 Commentary page. James Pinkerton explains how deregulated electricity, at its best, saves the average household $10 a month--while minimizing the billions that it costs when deregulation is at its worst (“Enron Is but a Pebble in the Wave”).
Bart Kosko, on the other hand, explains the Nobel Prize-winning Nash equilibrium, showing “how selfish competitors should act in relation to those whom they compete against” (“How Many Blonds Mess Up a Nash Equilibrium?”).
Consumers would be like the rabbits and deer in Kosko’s article. When deregulated suppliers compete individually, they each get rabbits and consumers save their $10 a month. When deregulated suppliers cooperate, they get a deer and consumers pay billions.
Deregulation unleashes the hunt for deer among infrastructure suppliers and traders. Only regulation can keep them satisfied with rabbits.