POLS 1101 1st Edition Lecture 3Outline of Last LectureI. Prisoner’s Dilemma vs. Coordination DilemmaII. DefinitionsOutline of Current Lecture I. Coordination vs. Prisoner’s DilemmaII. Another form of Prisoner’s Dilemma – Free Rider ProblemIII. Tragedy of the CommonsIV. Government as a solutionV. Cost of Collective ActionVI. Designing Constitutions for Collective ActionCurrent LectureI. Coordination vs. Prisoner’s Dilemma Institutions: set of rules and procedures for reaching and enforcing collective agreements.o President can sign or veto billso Congress writes the bills When there is a group of people that get together that try to achieve something there will be many issues There are two different kinds of problems, if you can’t solve the problems than you have no coordination.o Coordination problems: When you are in a group trying to do something such as cleaning your dorm room. So you and your roommate have to figure out how to combine effort and clean. So each person must decide what they prefer to clean. o Prisoner’s Dilemma: Arises whenever individuals decide that even thoughthey support some collective undertaking, they are personally better off pursuing an activity that rewards themselves despite undermining the collective effort. Always present in a collective action and can bring action to a halt Arises whenever individuals, who ultimately would benefit from cooperating with each other, also have powerful and irresistible incentive to break the agreement and exploit the other side Only when each party is confident that the other will live up to an agreement, can they successfully break out of the dilemma and work to their mutual advantage For Prisoner’s Dilemma the secret is to get everyone onboard For the government you have to create institutions that force guarantee agreements that are honored The Prisoner’s Dilemma is fatal because it can stop the government from doing something unless they fix itII. Another form of Prisoner’s Dilemma – Free Rider Problem The Free Rider problem is another form of the prisoner’s dilemma that afflicts large groupso With each individual’s contribution to the collective activity being small and inconsequential, each member will be tempted to free rideo Those people than proceed to withhold their contribution to the group’s undertaking while enjoying the benefits of the efforto Ex. NPR-Has good quality news that reads to you which is good, and you don’t have to pay money for it. You are a free rider.o Given the logic of nonparticipation, why does anyone ever contribute to acollective enterprise?o It may be rewarding for some people to do so, even if the contribution is minor Solving the Free Rider Problemo Private inducements to contribute to the collective action Ex. Triple A doesn’t only fix your car, they also lobby to the government to try and get more streets and highways built. Because if Triple A came to you and asked you to donate $50 to help build highways you wouldn’t donate it so they offer you goods in return- Forced Compliance: Government passes laws forcing people to comply because people want to free rideIII. Tragedy of the commons Resembles free riding but it is only when your resource is scarce so you must curve the usage so you can save it for the future Large # of participants encourages each to renege on contributions to the public good Difference: good exists already and will be destroyed if its exploitation is not controlledo Such as the community has a collective good that is in danger of beingsquandered unless members cooperate to preserve it such as how much water is used in a neighborhood. For ex. The Lake Lanier water shortage a couple years ago where the county of Gwinnett only allowed people to use water outside their homes on certain days of the week Solution to the problemo There is an institutional design created to fix ito Force: Government-pass laws regulating use, police the commons, punish the cheaterso Privatizationo Private inducementsIV. Government as a solution Government is a solution to the prisoner’s dilemmao Imperfect, yes, but some problems will not be solved privately by citizens or by corporationsV. Costs of Collective Action When we create an institution, the design matters because it depends on twokinds of costs Institutions strike a balance between Transaction costs and Conformity costs. When you increase one of them the other decreases. Both of them cannot increase at the same time or decrease at the same timeo Transaction Costs The time, effort, and resources required to compare preferences and make collective decisions The transaction costs increases with the number of participants There are more rules when there are more peopleo Conformity Costs Is the inverse of transaction costs Is the difference between what you would do if you were a dictator and what the collective group decides in the end Conformity costs is what you are giving up for the better good So how much did one party give up to reach the collective issue Institutions that minimize transaction costs tend to impose excessive conformity costs and vice versa Dictatorship is at one end of the spectrum and government by consensus at the other endVI. Designing Constitutions for Collective Action Command: Refers to the authority of one actor to dictate the actions of anothero Command authority gives its holder comprehensive control of those within the scope of its authority Other institutions are contributed through agenda controlo The capacity to set choices available to otherso When you have the power to set which agendas on the table than youhave a lot of power When there is something you really don’t want to happen than you just don’t have to set it on the table Majority Rule: It normally refers to simple majorities or one-half plus
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