Michael Giberson
Thinking about wishful thinking (see previous post), I am reminded of a minor error in George Stigler and Claire Friedland’s classic article, “What Can Regulators Regulate? The Case of Electricity.”
As part of their introduction, they write:
And if wishes were horses, one would buy stock in a harness factory.
I believe they have misapplied the unstated underlying comparative statics analysis. If one were to learn sooner than competing investors that wishes were about to become horses, only then should one buy stock in a harness factory. If wishes were horses already, there would be no particular reason to believe harness factory stock was under priced.