Tag Archives: games

Experimenting with an earnings tax

Imagine a 2 period wealth maximization game. In period one, consumers receive unitless  endowment N and can choose to use that endowment to consume, invest (at some interest rate i) or do nothing. In period 2, consumers choose to consume or do nothing, payoffs are made, and the game ends. We can introduce an exogenous income tax on investments, and an exogenous sales tax on consumption and utilize Monte Carlo simulations to do comparative analysis on different regime states to analyze the hypothesis that taxation of income retards stimulative investment and that a sales tax mechanism is preferable to maximize economic growth.

The basic design seems sound to me. . But flaws are not always obvious. Thoughts?

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On Farmville and social capital

A. J. Patrick Liszkiewicz writes:

One wonders if this is a good thing. It is difficult to imagine Aristotle or Caillois celebrating Farmville as essential to citizenship. Indeed, when one measures Farmville against Roger Caillois’ six criteria for defining games, Farmville fails to satisfy each and every one. Caillois stated that games must be free from obligation, separate from ‘real life,’ uncertain in outcome, an unproductive activity, governed by rules, and make-believe.[12] In comparison:

(1) Farmville is defined by obligation, routine, and responsibility;
(2) Farmville encroaches and depends upon real life, and is never entirely separate from it;
(3) Farmville is always certain in outcome, and involves neither chance nor skill;
(4) Farmville is a productive activity, in that it adds to the social capital upon which Facebook and Zynga depend for their wealth;
(5) Farmville is governed not by rules, but by habits, and simple cause-and-effect;
(6) Farmville is not make-believe, in that it requires neither immersion nor suspension of disbelief.

Of these points, the fourth is the most troubling. While playing Farmville might not qualify as work or labor, it is certainly a productive activity, as playing Farmville serves to enlarge and strengthen social capital. Capital is defined as “any form of wealth employed or capable of being employed in the production of more wealth.”[13] New media companies like Zynga and Facebook depend upon such wealth in generating revenue, just as President Obama depends on social capital to raise money, to organize, and to communicate. Unlike President Obama, though, Zynga is not an elected official, and is not obligated to act with the public’s interests in mind.

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