"who later turned out to be Jeffery Dahmer." But who was he when you were riding the bus with him?

Like http://66.254.114.41

You don't appear to understand a concept called tax incidence. The person writing the tax collector check is not always the person who is truly paying the tax. Capital gains are taxed on capital assets. Capital assets are generally income producing assets. Income of income producing assets are taxed at ordinary income tax rates. The value of an asset is the present value of its payments. When you reduce those payments with income tax, you reduce the value of the asset. Therefore, the owners of the asset pay a tax in the form of a lower asset value. Capital gains is a double tax, just like a dividend tax. Warren Buffett is brilliant, but his statements on that particular subject are just wrong.

Freely signed = we will all walk out at the same time and destroy your business.

At the graduate level of Economics, it tends to be all math. That's why I tend to think that way. It's obvious you have studied a fair amount of Economics.

I don't disagree with the empirical data you cite. However, your original statements lacked any sort of mathematical precision, and "Nash Equilibrium" is a precise term. The statements you are making now are far more precise.

Since I haven't done so yet, let me address your statements:

it's quite rational to reject $0.01 when the other player receives $99.99, since after the game the richer player has more options available to spend money than the poorer player.

It depends on what your definition of rational is. I think most economists woulds say utility maximization is rational behavior. Further, many would say income maximization is rational, all things equal. Therefore, you would have to get some utility from rejecting the offer for 100/0 not to be (weakly) Nash. I really don't understand, "since after the game the richer player has more options available to spend money than the poorer player."

So it's irrational to offer less than 50, and Nash is at 50/50

Only if utility from rejecting an offer is greater than utility from the extra $50. I think that assumption is unwarranted, generally speaking. If I recall correctly, there was an ultimatum game played with Japanese people where the splits were actually 40/60 in practice. Economists were close to 100/0 in practice.

Again, my problem with your statements is how fast and loose you are with language in a social science that strives for mathematical precision.

It's been a few years since I studied this stuff, but if I recall correctly, every offer + accept is the Nash Equilibrium for the ultimatum game, even 100-0/accept (weakly Nash).

What is the "real" game? Your original scenario seems to envision the ultimatum game on an island, or some kind of zero sum game (which ultimatum is not).

Most economists would agree that it's fair to assume a utility function weakly increasing on income. Therefore U(x+n)>=U(x) where x is original pre-game income (even zero as your model suggests), and n>=0. Further, economists assume that we make a selection that maximizes our utility. With those two assumptions income = x+n is weakly preferred to x. The only way your model makes sense is with a jealousy/spite variable where U is weakly decreasing on the income of the other person. That may very well be a viable construct for a utility function, but your argument is replete with unstated assumptions.

I don't understand your position. Are you claiming that you are or are not using the term "Nash Equilibrium" properly? I was arguing that you were not. Your musings are interesting, but you are using terminology incorrectly.

Nash Equilibrium has a definition. Look it up. http://en.wikipedia.org/wiki/Nash_equilibrium.

You seem to be implying that babies commit suicide.

I think it's pretty fair to make the inference that the wealthy have less children from the sources I cited to, as well as empirical evidence. Not strictly, but on average.

I really don't mean to belittle you because I can tell you are a very smart person, but I don't think you have any idea of how hard executives (or anybody who earns a large salary) work. Granted, there are exceptions, but for the most part, CEOs are stressed and work a ton of hours. If you have any sources that state that CEOs are: "not stressed, their jobs are rewarding and meaningful to them, and because they are not stressed they tend to be healthier and live longer." Believe me, the golf trips and private jets get old quickly when you aren't spending time with your family. On those trips you spend your time with people you probably don't like, doing things you don't like, but pretending to have fun.

Production needs to be organized, and if I can organize ten workers to produce twice as much output as any other person, aren't I worth something approaching the economic value of the ten producers? And why is that not production? Again, you still haven't addressed my question as to why the CEOs are in fact paid as much as they are. Maybe there's a reason for it? Based upon a non-conspiracy theory, perhaps?

People are compensated for taking risks and for working hard (a/k/a capital and labor). The people who take risks get lucky, and sometimes people who seem undeserving get wealthy. Society is better off, and those who take unwise risks will fail more often than not. As an aside, except for the extremely wealthy, like the Rockefellers, Kennedys, etc, non-earned wealth is lost by the third generation. See, e.g., http://www.worldscibooks.com/etextbook/6800/6800_chap01.pdf. Therefore, most people with wealth either earned it through the above (risk or hard work), or are only one generation removed.

CEOs take risks because we as a society reward risk taking. I argue idiosyncratic risk is good. Most economists would agree. Idiosyncratic risk can be hedged to eliminate systemic risk to society. I can believe that many risk takers have mental problems because that kind of risk taking is not in the individual's best interest because of the concept of marginal utility, but it is in society's best interest. Also, if you think CEOs are immoral people, enact laws that say what is illegal. Everybody has a different definition of what is moral, and if a majority can't agree on a law, maybe most don't consider the behavior immoral.

There's no right or wrong when it comes to tax rate. There's nothing "wrong" with a 99% tax rate on wealth. There's nothing wrong with a per capita tax. The people with the guns set the tax rate. In the US, we are a democracy, so the people with the guns are the majority. Each tax system modifies incentives. Tax the heck out of the rich. See what happens. Also, where do you think rich people's money goes? Wealth is merely the ability to make decisions about the allocation of resources.

As far as equal access to education: there is no fundamental reason why there should be. (Just like taxes, the people with the guns decide what is fair). We humans are selfish and practice nepotism. If we didn't, our lineage would have died out a long time ago. We work hard to give our children an advantage. Take away our ability to give our children an advantage, and watch our desire to work plummet. Combine that with a high tax rate, and explain to me why you think most people will take productive jobs. As an aside, with the Internet, there is equal access to knowledge.

Desperate workers are a necessary result of the competition for limited resources. In a perfectly competitive market, profit is zero. In the labor market, it means you are indifferent to providing your services: i.e. you are just a hair away from quitting. Unions are a monopoly: they monopolize the supply of labor to a company, and can extract the entire profits and sunk costs from a company. See, e.g., General Motors. Try too hard to control the markets, and you will just increase the number of desperate workers in the long run because you will harm production, even though the "benevolent planner" is trying to do just the opposite. No competition = communism = USSR = fail!

It seems to me that the wealth accumulation could be explained by less wealthy people having more children and wealthy people having less children. See, e.g., http://en.wikipedia.org/wiki/Demographic-economic_paradox. Thus, if we assume any correlation between the wealth of the parent and the wealth of their child, the proportion of children of the less wealthy will grow relative to children of the wealthy.

These modern times may be the first time where the tyranny-of-the-majority democratic government is officially the tyranny of the less-wealthy, taxing the wealthy to transfer wealth to the bottom half of the wealth spectrum. http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1. If taxes increase, at some point, the wealthy productive members of society will move to a more tax friendly country.

By the way, why do you think CEOs do in fact make as much money as they do? I for one wouldn't trade my life for theirs. Do you have any idea of how many hours most CEOs work? There are not a lot of people smart enough to run a company who are willing to make such tremendous personal sacrifices. It makes sense that you would have to bid up their salaries to compete for such a limited supply. Alternatively, is it really that hard to fathom that productivity is distributed quasi-normally, and the CEOs are the producers on the far right?

Unless it's patent litigation between states :)

There is a service that will protect your idea called StampYourDocuments.com. It's one thing to invent something first, it's another thing to prove you invented it first. Bear in mind that stamping your idea on StampYourDocuments.com is not a panacea. Even if you invent first, you may lose your rights if you aren't diligent in pursuing your invention or publishing it.

Having one outside developer work on an open source project might be enough for reliance to make a license irrevocable. I otherwise agree with you. I think it's very unlikely that the license is a contract because it would have no consideration (i.e. what is the user giving up?) Back to studying for the Bar for me!

"The Congress shall have Power To ... provide for the ... general Welfare of the United States." Article I, Section 8, Clause 1 of the United States Constitution.