Children Prove to be Irrational and Altruistic at a Younger Age

When economists analyze what they believe to be rational, they often weigh the costs and the benefits to decide if it would be rational to participate or contribute to an activity. Sometimes individuals contribute or participate in an activity because they are altruistic, even though it is not rational for them to do so. This article in the Wall Street Journal analyzes if altruism begins when children are young, in this case three to four years old, and how this affects the decisions they make. Typical research has said that younger children are not altruistic and only become so when they become older and have “stronger notions of morality.” However, this study found that the majority of the three and four years olds expressed altruistic tendencies when they chose to give up some of the stickers they were given to an unknown child who they were told did not have any stickers. There are two topics from class that seem to be relevant to this study. The first is Coase and his work on the “Coasian Solution” where beneficiaries of a public good pool together their resources depending on their willingness to pay in order to provide the good. The issues that arise from this theorem are the holdout problem and the free rider problem, where it is more rational for some individuals to abstain from contributing to the provision of the good if enough other people pay and get the good provided without them having to contribute. As mentioned in the article, the only way to prevent the free rider and holdout problem is to make sure the people that benefit from the good are altruistic, so even if it is not rational for them to contribute to the provision of the good because it will be provided anyway, it is morally right for them to contribute so they do so anyway. Another instance where abstaining from contributing is rational is Johnson’s article on voting where it is irrational for people to vote when weighing the costs and benefits, but people do so anyway because people see it altruistically as their duty. Therefore, if the study holds true and children are showing altruistic tendencies at a younger age than previously thought, maybe we can expect a lot less free riders and a lot more voters in the future.

Rent Dissipation in the NCAA

The NCAA football game of conference hopping has been an endless source of drama and uncertainty in the past few months. I think it's a fair assessment that these conference shifts are the result of seeking increased profits from TV income, also known in our class as rent seeking.

Some argue that TV broadcasting has made NCAA football just a profit-hungry machine that's no longer about the sport. Schools seem willing to do anything to churn a profit at the expense of players, coaches, and fans. This includes switching conferences to seek rent--the additional profit the school may receive from TV income in a superior conference. Conferences that have the most exciting rivalries, the most talent, and the highest profile games (thus, generating more TV income) have been increasing in members as schools join in search of these profits. Great examples are the SEC, the Pac 12, and the Big 10 (Hang on Sloopy anyone?). While this is happening, some of the weaker conferences (the Big 12 and the Big East) are losing members. This example of the Big 12 setting its 2012 teams at 10, including Missouri illustrates the financial incentives to seek rent, and potentially switch. Missouri has been contemplating moving to the SEC in hopes that they may rake in an extra $12 million a year in TV income. To try and stop the decline in its members, the Big 12 has set a new policy of equal revenue sharing as a means to keep their TV incomes comparable to those of the SEC and keep its remaining members.

What these teams may not be thinking of is the amount of money they are spending moving around conferences dissipates the rent. Barriers to entry and exit, such as existing TV contracts and exit fees, plus the time spent in negotiations between schools, are adding up and cutting into the rent they want--profit from TV income. If this continues, the percent of rent dissipated could exceed the actual potential TV income. So how about everyone just sits tight, stays put, and we can all get back to our football in peace.

"Third Parties", Then and Now

While a two party system has, for all intents, ruled our political landscape for most of modern history, they are not completely immune from pressures on their peripheries. In both the past and present, we see evidence of new political quasi-parties forming not with the intent to make major electoral gains, but to change the center of political opinion within one of the two major parties. One major example is the Dixiecrat party which ran in no local elections and had next to no chance of prevailing in the national election. It is unlikely that Strom Thurmond actually believed that he was going to be president of the United States. Instead, his candidacy and his party existed to move the political center of the major parties. As we saw in Downes, if a 3^rd party comes into play one or both of the major parties in a two party system will shift to try to capture the new outlier mode. While a 3^rd party has no real chance of success itself, it can succeed in shifting the opinion of the major party towards its position to capture its voters.

In the modern day we see examples of this with the Tea Party, and in an infantile stage the Wall Street Protesters. The Tea Party has fared poorly when their far-right candidates face mainstream republicans in primaries, and have encountered disastrous consequences when running against Democrats in general elections. Despite their relative lack of electoral success, they have succeeded in pulling the mainstream Republican Party to the right. Even moderate republicans seek the votes that the Tea Party commands and fear being denounced by them. While much is yet to be seen, the Wall Street Protesters have many of the same signs of being a young Tear Party of the left. Will they succeed in dragging the Democratic Party further to the left? Our studies tell us that should they gain enough clout to begin to form a coherent voting bloc, the Democrats will be compelled to move their median to the left to gobble up the “Wall Street Protester” vote, and ensure that we remain largely on a bimodal spectrum. Whether they do in fact form a coherent voting bloc has yet to be seen however.

Taking the Middle Road

Ever since he first entered the political scene as a possible presidential candidate, Republican Mitt Romney has been battling criticism from his own party's evangelical base over the fact that he is Mormon. Romney has been consistently addressing the criticisms about Mormonism with his own rebuttals about the similarities between it and Evangelicalism, stating "that he is as Christian as they are." However, at an annual summit of Christian conservatives this past weekend, when faced with jabs by evangelical pastor Robert Jeffress that Mormonism is a cult faith and that it is "not Christianity," Romney instead decided not to address his faith directly. Rather, he denounced religious bigotry in general, without even saying the word "Mormon."

Romney's strategy regarding religious criticism can be explained through Down's theory of ideologically based spatial location on a political spectrum. Both the Democratic and the Republican party gravitate towards the middle of the spectrum to get the most votes and are very concerned about taking the most uncontroversial paths possible so that they can appeal to the more typical median voter. However, they also try to make sure they do not alienate the extremes on the spectrum, or groups that feel strongly about a particular issue. Romney is obviously concerned about alienating Republican evangelical voters because he has tried two different strategies for addressing their criticisms in order to get their support. When it became clear that his strategy of addressing their criticisms directly did not work, he switched to an argument about religious bigotry, trying to dodge the issue a bit. Whether his strategies for getting the Republican evangelical vote will be successful is yet to be seen.