Martingales and Infanticide
Assume that you live in a culture that, for some reason or another, values having a male heir in the family. Families adopt the strategy of having children until the first male child is born. If the natural sex ratio is 1:1, what is the expected sex ratio in this culture?
It remains at 1:1. Here's why. Each family has 1 boy. As for females, there is a 50% chance of having no girls, 25% chance of having 1 girl, 12.5% chance of having 2 girls, and so forth. So the average number of girls is (n-1)/2^n summed from n = 1 to infinity.


Therefore just following the strategy above does not change the sex ratio. In fact, it is possible to prove that no stopping strategy would change the sex ratio. Here's how:
After having m children, a couple has to decide whether to have the (m+1)st child, based on those m children. Since the (m+1)st child's sex is completely independent of the already born m children, it does not on the average change the existing number of boys - girls. This means that the average with or without the stopping will remain the same, namely at 1:1.
How is one to get a skewed sex ratio then? Wikipedia (HT: Leeping):
However, other Asian regions also have higher than average ratios, including Taiwan (110:100), and South Korea (108:100), which do not have a family planning policy.[70] Many studies have explored the reason for the gender-based birthrate disparity in China as well as other countries. A study in 1990 attributed the high preponderance of reported male births in mainland China to four main causes: diseases which affect females more severely than males; the result of widespread under-reporting of female births;[71] the illegal practice of sex-selective abortion made possible by the widespread availability of ultrasound; and finally, acts of child abandonment and infanticide.
This is actually a special case from the very powerful and counter-intuitive Optional Stopping Theorem.
4 comments
A rational farmer wouldn't, but a human farmer would care ;)
Also, I assume you were alluding to CEO compensation (in your title). Suppose the CEO's pay is 100 times that of the average employee, to be "rationally fair" like in the example you gave, the CEO needs to do 100 times more work (whatever the operator "times" means in this case) than the average employee. Is that true? From the point of a disgruntled employee, probably not. From the point of view of the CEO, probably yes.
Stockholders have the right to be unhappy, because they are paying the CEO. It's really none of the business of other employees. It's the buyer who decides what price is fair, not bystanders.
There are legitimate reasons for the farmer to be unhappy. The shoemaker/blacksmith is now effectively a cartel, and has more bargaining power because they have guaranteed internal trust. If he uses his blacksmithing monopoly to gain unfair advantage in the shoemaking business, that leads to unnecessary monopoly loss, and falls under anti-trust.
I didn't realize you were talking about "care" in the economic sense and not the human sense ;)
I'm not worried about cameras stealing my soul either. Should I be?