I posted this to the globalchange list some time ago, but now that I have the attention of a couple of market conservatives, let me post it here. Apologies to those for whom it is a rerun. Note that the apparently rational strategy actually guarantees an eventual flood.
Imagine that you are an economist who enjoys playing Tetris on your computer, so while your bathtub is filling you decide to play a round in the TV room upstairs.
The round of Tetris is going fabulously well. You are in the zone. You are placing piece after piece where it goes; you have long since passed your all time high score; you are having a whale of a time. Your bathtub is meanwhile filling up.
A tiny corner of your mind suggests that you ought to go downstairs and check your bathtub, even though it would interrupt your excellent Tetris game.
Fortunately, you are an economist. The tiny corner of your mind that is concerned with the structural integrity of your house and not the joy of Tetris is sufficient to reason as follows.
Probably the tub is not full yet, so the utility to me to keep playing this next piece exceeds the utility of running downstairs to turn off the water.
Maybe the tub is already flooding. Well, then, that is too bad, but the additional flood cost of playing this next piece will be small compared to the total flood cost, while the pleasure I am getting from this game going so well would be terminated.
Perhaps the tub is right at the point of starting a flood; a "tipping point". Well in that case you certainly would run right downstairs and turn it off, but what are the odds of that? There is no way to prove this highly unlikely ands speculative circumstance to you. There really isn't enough information to know exactly when that moment might be, so this almost certainly isn't it. Surely you can just dispense with that sort of wild speculation.
You have just proven that the matter does not deserve much attention for the duration of placing this next Tetris block. You will revisit this problem later when you are placing another block, with the same small shred of your attention. Tetris is such fun!
So you keep playing, secure in the knowledge that you have maximized utility.