POLS 1101 Lecture 1 Outline of Last Lecture I We went over the course syllabus in the previous lecture If you have any questions you can refer back solely to the syllabus Outline of Current Lecture I Common Collective Dilemmas A Prisoner s Dilemma B A Political Campaign Prisoner s Dilemma a Questions and The Thinking Process of a Candidate b What Actually Happens C Large Scale Prisoner s Dilemma a Free Rider Problem b Solution to Free Rider Problem D Special Case The Tragedy of Commons E Coordination Problems Examples II Coalitions A Unstable Coalitions Example B Principal Agent Problems III Institutions a How do you solve collective dilemmas Examples Current Lecture I Common Collective Dilemmas A Prisoner s Dilemma a Strategic interaction where each actor is better off with cooperation but each is incentivized to not cooperate o Prisoners are put in separate rooms so that there is no cooperation and offered deals to rat out the other o They pretty much always implicate squeal on each other and get a medium sentence for manslaughter o If they would ve stayed quiet they would ve had less easier charges and had been better off B A political campaign prisoner s dilemma a Questions The Thinking Process of the Candidate o Should I run an expensive TV campaign or should I take the cheapway out and try not to be in debt when if I do get into office o If either one of us is running TV ads while the other is not it s a toss up between us o I could raise money after that to make up for the money I spend and actually win because I have TV ads and the other component doesn t b What Actually Happens o Both a probably going to run TV ads to try and win which will be expensive They probably could ve had a gentleman s agreement to not have TV ads and it would be a cheap toss up C Large Scale Prisoner s Dilemma o People want to see public good provided o Public vs private goods a FREE RIDER PROBLEM o Individuals have no incentive to provide it free riding occurs EVERYONE WANTS THE BENEFITS THAT THE GOVERNMENT MIGHT PROVIDE LEADS TO PEOPLE THINKING THAT IT DOESN T MATTER WHETHER ONE INDIVIDUAL CONTRIBUTES OR NOT WHICH LEADS TO NOBODY PAYS AND WE ALL CRASH HAVE NOTHING b Solution to free rider problem o Effective enforcement is required to solve problem o Change the rules of the game Make it where if you don t comply you have serious punishment o private punishment lose house etc o Danny DeVito summed this up in Tin Men D Special case the Tragedy of the Commons E Coordination Problem a Groups want to act in common but cannot agree on solution They all want the same thing but don t know how to come together with an idea of how to get it Examples Where to meet for lunch II Ultimately as long as we meet up for lunch somewhere and don t have to eat by ourselves we will be happy o Which side of the road to drive on o Which candidate to support Coalitions collective agreements A Unstable Coalitions o Collective agreements can be undermined in the face of competition o Losers in original coalition have incentives to make better offer to some coalition members o The rest of the coalition members pretty much get screwed but if you are in the list of people you are lucky o Someone comes up with a counter plan which also screws over most of the people Example A big amount of money to be disbursed between a bunch of people o Unstable coalitions can undermine collective decision making III NO FINAL DECISION EVER MADE o Agenda setters can help by restricting options available to the group so that there isn t all of these ideas being thrown around that are going to screw over the people B Principle Agent Problems a Principals hire agents to do some task for them Examples 1 Car Mechanic Wants to do the minimum amount of work 2 Doctor for the least amount of money b Principal cannot be sure agent is acting faithfully Information asymmetry exists between principal and agent c These problems also exist in government All elected officials are agents of the voters Elected officials delegate tasks to bureaucrats and bureaucratic agencies Institutions Institutions are formal constraints on behavior Example The Mafia o Can be large and complex or a rule within a larger institution a How do you solve collective dilemmas Institutions help solve collective dilemmas o Thomas Hobbes Government solves war of all against all o Institutional design affects distribution of benefits in society o Can be inequitable large vs small states HOMEWORK For discussion sections Read Bullock Gaddie chapter 4 Be prepared to talk about this reading in your discussion section For Tuesday Read Kollman pp 31 50