From: John Conover <john@email.johncon.com>
Subject: Re: [wbaker@splat.baker.com: ...
Date: Fri, 14 Apr 95 01:36 PDT
MKTGGURU writes:
> Three cheers for Hoffman!
Yea, but class actions against CEO's is a great opportunity for young
law firms to make a name for their self. Makes it tough. It is kind of
the tort law of the SEC environment. (Instead of ambulance chasing, it
is stock chasing.) Funny, but potential SEC violations are regarded as
a "growth market" in attorney'dom. Hoffman's comments will be
disregarded, and CEO's are/will be so guarded in what they say, that
there will be no communication between the board-share holders-employees,
that no authority can be exercised, and things will go to shit, but
the CEO won't be involved in a litigation, which is a better
alternative, if you are a CEO. See the "prisoner's dilemma," of
previous discussions for details on the CEO's optimum "game plan." (eg.,
a defection strategy, in response to a "tit-for-tat" solution to a
defection strategy.)
Funny how folks don't regard investing in stocks as a "risk." If they
wanted no risk, perhaps they should invest in an FDIC (National)
bank's savings account. But if they want more returns, they could
invest in stocks, but that alternative has risk involved. Kind of like
the S&L folks. Got higher returns than an FDIC, but when the risk
piper demanded to be paid, they whined to the US Govt., and got low
risk and high returns. Ditto the above comments on the "prisoner's
dilemma."
The lawyers justify their actions in that "they are the custodians of
social administration, and that is interpreted to mean that they
protect the weak-it is one of the prices we pay for democracy."
However, the game theorist would claim that it is a system
problem. Specifically, the jury system (which all industrialized
countries have abandoned, except the US, excepting capital offenses.)
I made the statement that the problem is educational-there are too
many stupid people. Trouble is, that applies to jurist, also. Consider
if you were representing a CEO. If it goes to the jury, you loose,
ie., settle for the best negotiated compromise-which means you loose,
also, just not as much, (if you are a skillful negotiator.) And the
plaintiff's attorney firm makes 30%-as an incentive, you understand,
so they will give "their best." (Which happens to be a zero-sum game,
in a plethora of such firms, which is the "system problem," BTW)
Funny how defection strategies compound into a "system problem," in
corporate environments, social administration, etc.
John
BTW, Stephanie Forrest and Robert Axelrod (game theorist) have done
some simulations that seem to indicate that "emergent phenomena" is a
solution to the prisoner's dilemma. What this means is that there is
an alternative to the above scenario-and that is to find a
"cooperation strategy" in another game, ie., play with someone who
cooperates-like in a foreign country. Perhaps the "globalization of
commerce" is forcing us to rethink our "industrial age" legal
system. I don't know. Just a spur of the moment thought.
--
John Conover, john@email.johncon.com, http://www.johncon.com/