The Economics of Time Travel

This is an interesting blog post, and it is certainly entertaining to think through the implications. I love thinking about how this works:

If backward time travel is also somehow possible, maybe firms in the future will choose to outsource some of their operations to the past, locating their manufacturing and other services in lower-wage time periods.

Just to extend the analysis, if we applied comparative advantage to this analysis, we might think that certain time periods specializing in specific areas of production, which is what I thought initially. However, that might not be the case. The starkest case against this is that we bought wood from the past, and we sold them chain saws. This is reasonable, since we specialize in making chainsaws and our natural resources have depleted, and they have what we find valuable. Sounds good! But wait! The second they start preserving alot of trees, we might not be able to sell them chainsaws. That is if we bought natural resources from them, they would have less natural resources for R&D, which means technological progress might slow down in their time, which has an adverse effect on us. This is worth considering, but I think if we look at the margin, we can still get some trade going.

Thinking about this problem makes me think about technological progress. If we bought technology from the future, and in return, we sell them something (I can't think of anything), wouldn't every time period have the same production technology? In equilibrium, wouldn't technological advancements remain stagnant? As a result, a huge implication in cheap time travel is that the futre=past. The idea of time running, can be ignored.

Another, the implication of time travel is that the idea of uncertainty disappears. This may mean that money will indeed be neutral. However, the disappearance of uncertainty makes me more interested in the game theoretic aspects of competition and cooperation.

Repeated interactions make cooperation possible, whether it is infinite stages or finite stages (only needs a little bit of incomplete info on strategy space). However, the cooperation that appears in finitely repeated games may disappear, if both players knew about the type of strategy they have to work with. The player's type will most definitely reveal itself at the very end of the finite game, where a rational player will choose not to cooperate. As a result, cooperation might not occur in finitely repeated games, if both are rational. Also remember future=past, so the game we are playing in essense is a simultaneous game! So cooperation may never work in this case! Think about the prisoner's dilemma.

Imagine the US and USSR both had time machines, would the balance of terror work in this case? I imagine they would both have to be extremely nice people to avoid a war.

I don't know if I want to see that time machine built, to tell you the truth.