game theory with health care workers

http://www.gametheory.net/News/Items/059.html

This article talks about game theory and how hospitals bid up the price of labor in order to attract more nurses and workers but in reality, the opposite ended up happening. There is an analogy relating hiring with rock paper scissors and expectation of what other hospitals will do. For example if a hospital thinks that competitive hospitals will raise their wages, then they will also raise their wages.

This columnist's argument can be applied to practically every real life situation because there is always a time lag that simple supply and demand models don't account for. Economists try to reconcile this difference using separate models for short term and long term scenarios, which the columnist does mention. Although the columnist does point out that the supply and demand for nurses are currently not in equilibrium, his solution of bringing in other "professionals" to cover in the short term is a bad idea. When you do this, you are forcing a false equilibrium that would in turn push wages down. This would dissuade fewer people to become nurses and the shortage of "real" nurses will become a perpetual problem. So what the hospitals are doing now by offering more $$$ is the correct thing to do. The market should determine what nurses get paid, not the government. Since when are the hospitals short on cash anyway? To think that lowering nursing expenses would translate to cheaper health care is naive and idealistic.