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Struggling to see why the people would decide on deranged prices rather than sensible prices. Do they not like the restaurant?

Regardless, seems like a wildly inaccurate and unhelpful metaphor.

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Because the self interest is to have cheap food. No majority would vote to have high menu prices.

Surely the self-interest is to have a nice restaurant? Having cheap food for a week or two, then not having the food at all, doesn't seem like something people would want.

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