That’s exactly correct. It’s a standard taxation-begets-misallocation scenario.
For reference, PI’s current rules have this effect to roughly 0-3% per contract, potentially adding across multiple contracts in a bundle. Prices closer to 50% are worse (though prices further away have their own biases, as Zvi explains).
That’s exactly correct. It’s a standard taxation-begets-misallocation scenario.
For reference, PI’s current rules have this effect to roughly 0-3% per contract, potentially adding across multiple contracts in a bundle. Prices closer to 50% are worse (though prices further away have their own biases, as Zvi explains).