That's rather the point: when all actors are behaving rationally, yet the outcome is not something that is good for society, we need to change the rules to change behavior.
Indeed, it’s a little disappointing how reliably the tired argument of “no one is forcing them to” comes out on HN, as if generations of social reforms addressing such arguments as “no one is forcing impoverished families to send their children to the factories” never happened. Your observation is an excellent encapsulation: All actors are behaving rationally, to a net social loss, and thus the rules need to change.
"when all actors are behaving rationally, yet the outcome is not something that is good for society, we need to change the rules to change behavior." +1!
One might make the case that the cities were not acting rationally.
Its rational to not entertain amazon's offer only if you know for certain nobody else will either. The first one to defect gets everything.
This is like paying Tom sawyer to paint the fence. It's okay to let the other kids outbid you.
I'm not sure I'd agree with that. For instance, I think the Nashville deal is fantastic for my city/state. we are getting 20% of the jobs (5k vs 25k) for "only" about 100 million compared to several billion from NY and VA. It will easily make that back in benefits to the local economy and increased tax revenues.