Friday 11 March 2011

Bets on Higher Oil Prices Rational, but Irresponsible  | Arabianomics

Colin Barr at Fortune argues that the rise in oil prices is a ‘rational response’ by speculators, even though “It’s tempting to view that bet as irresponsibly driving up gas prices and endangering a tepid economic recovery.”

Barr is a seasoned industry expert and begs an interesting question here: are the speculators who are driving up oil prices acting rationally?

Our answer is that of course they are acting rationally, but they are also acting irresponsibly.


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