The Good Place Doesn't Need Tiebout

NBC’s The Good Place is a show about a woman who mistakenly gets placed in heaven despite being a horrible person during her time on earth. The heaven in the show is segmented into communities where everyone that made it into heaven, approximately one out of a million people, spends eternity. These communities prompted me to think about Tiebout.

In this version of heaven God perfectly places everyone to the exact community that would be a utopia for them. For Eleanor, the show’s focal character, her community is a small city with colorful buildings and no skyscrapers, complete with cool yogurt places and coffee shops. She’s been given a small house with modern icelandic interior design, and her true soulmate is even waiting for her when she gets there! Additionally each person gets a personal assistant that will tell you anything you want, how the earth was created, who really shot JFK, or anything else you want to know. Although there are many of these communities, no jobs, no externalities, perfect information, and mobile afterlife citizen-voters, the problem of preference revelation that Tiebout was addressing is nonexistent in the afterlife. God knows everyone’s preferences in advance and constructs a personal revenue-expenditure model to your exact preferences. For this reason there is never a need to move in the good place.

Does Rational Ignorance Apply to Midterms?

This week was nothing short of crazy. Between the normal meetings and classes, and additional tests and papers, there was barely time to breathe or eat. One assignment that consumed my time was a 12 page paper defining religion, using theorists such as Freud (a fun weekend read). If I had all the time in the world, it would be great to become an expert on all the different theorists for this assignment. However, Johnson discusses the idea of Rational Ignorance. In this theory, there is an optimal amount of knowledge, and an optimal amount of ignorance.

My marginal benefit of learning about authors starts high. I need to know something to write a 12 page paper, need to have some baseline of knowledge in order to not get a zero. But at some point, I have a basic understanding but the lower level details are confusing. The marginal benefit of learning the details and distinctions between the theorists declines-  maybe a few points on the paper or the chance to make a profound argument but mostly just isn't practical after a certain point. Additionally, the marginal cost is increasing. As the public choice exam crept closer and closer, and my stress level rose, the opportunity cost of my time studying the theorists continued to rise. Therefore, it is rational for me to be somewhat ignorant about these religious theorists. Using rational ignorance to justify myself, I embellished some of my points about Freud, and studied for Public Choice.

House Managers Assigning Chores, but Minimizing Costs

I live in the AXO sorority house. This sprawling home includes a porch swing, a newly refurbished interior, and a house manager who assigns chores to AXO’s 21 inhabitants. My peers may be horrified by chores in college since we moved out of our parents’ homes to have more autonomy, but having a house manager to act as a Constitution that assigns ground rules for cleanliness in the house is quite rational. Our house manager sets the threshold standard that every 21 days, a resident would either have to perform house duty (which essentially amounts to fluffing pillows) or kitchen duty (where they have to run the dishwasher, put away leftover food, and take out the trash).

It may feel distasteful to take care of other people’s dishes, but let me ask this: how many of you have free-riding roommates who leave their dishes in the sink for weeks at a time or let the trash overflow knowing that you will clean the dishes and take out the trash for them? Next question: how many of you are that roommate? The threshold rules for cleanliness set by our house manager are actually far more beneficial to the group than living in a large home without such a constitution. Decision making costs for following the house rules are very low because each tenant must sign a lease agreeing to the rules prior to moving in, eliminating the hold out problem. External costs are also fairly low because each girl only has to do a chore every 21 days, meaning each resident spends two thirds of her month in leisure. The costs of living in a clean home are then minimized by the existence of a house manager as compared to other housing situations for UVA students that lack such a constitution.  

Condorcet Inefficiency and the 2016 Presidential Election

The 2016 election was unusual because it seemed to transcend party lines. It was no longer just Democrat vs Republican, but also Populist vs. Political Insider. Because of this distinction, in many key states (especially MI, WI, and PA), 8%-12% of Sanders’ voters defected to Trump in the general election. The transitive preferences of these individuals are maintained because they valued the populist movement over party lines. This defection may have cost Clinton the election, and more importantly lead to a Condorcet Inefficient outcome.

Take for example Michigan: Trump won by only 13,080 votes (47.6% to 47.3%) and won 16 Electoral College votes. In MI, 8% of Sanders’ voters defected to Trump. Using 2016 State Representative Election Data, approximately 50.2% of MI population voted Democrat in their State Rep elections. I assumed a rationally ignorant voter would vote along party lines for State Rep elections because marginal cost of educating yourself on every issue is greater than the marginal benefit received from the most qualified candidate winning. Therefore I assumed if you voted Democrat for a State Rep, you were affiliated with the Democratic Party. I also assumed the proportion of Democrats who voted for State Reps held for Presidential election voters. Therefore if 50.2% of voters were Democrats, and 48.3% voted for Clinton in the MI Democratic Primary and 49.7% voted for Sanders, preferences for MI voters during the 2016 election would look like the table below. Of course this is a simplified version, assuming only 3 possible candidates and strict preferences for first choice Trump & first choice Clinton voters. If we applied the Borda Count to these preferences: Trump = 188.1 points. Clinton=212.1 points. Sanders 169.2 points. In this case Clinton should have won. However, in the specific case of MI, Sanders seems to have been the Condorcet Efficient candidate, because in pair wise elections he would have beat both Clinton and Trump under these assumptions.

	45.6%	24.3%=50.2%*48.3%	23.0%=(50.2%*49.7%)*92%	2.0%=(50.2%*49.7%)*8%
3	Trump	Clinton	Sanders	Sanders
2	Clinton	Sanders	Clinton	Trump
1	Sanders	Trump	Trump	Clinton

Fellowshopping

There are a wide variety of churches and fellowships available to UVA students and Charlottesville residents. Just like citizen-voters in Tiebout's model "shop" for favorable revenue-expenditure packages, UVA students "fellowshop" for favorable church packages which involve pastor, denomination, size, etc. The term "fellowshopping" defines how UVA students interested in Christian fellowship "shop" the different fellowships and churches on grounds. There are 28 fellowships to choose from; they range from Catholic student ministries to Chi Alpha with the Assemblies of God. Students can freely attend small groups and large groups of different fellowships with free mobility. Each fellowship also has an optimum size, as some prefer smaller congregations or can only reserve small classrooms for meetings, while others prefer a more mega-church feel and have the space to accommodate that. When students fellowshop, they first look at worship style - is it traditional or contemporary, can I raise my hands, or is it more formal? They also look at the pastor - is he young or old, does he yell and sweat or is he reserved, can women preach? They also look at elements like size of congregation, denomination, weekly meeting times, etc until they find a bundle of these "goods" that maximizes their utility.

Because of the free mobility of college students, their lack of a job within any specific fellowship, their free access to information about each fellowship online, and the fellowships desire for an optimum size, we get a real-life glimpse into Tiebout's model when many of his key assumptions hold. This not only holds for fellowships, but also for churches in general. When a church changes pastor, doctrine, worship style, or even the time of a service, we often see mass migrations in and out of that church community. Similarly, Tiebout's model claims that in a world of free mobility, we would see mass migrations in and out of communities as peoples preferences change or as a localities revenue-expenditure packages change. When those changes occur in a church, members like this couple, have free mobility to"shop" for a new church with a more favorable bundle of goods.

Social Pressure & Flowers

        During my childhood in Japan, I learned to place great value on communal activities to encourage social and economic thriving. While this kind of social pressure can be extremely dangerous to high school and middle school students when coupled with a strict perfectionism (as seen in the numerous studies done on the Hikikomori epidemic across Japan), the imperative it places upon individuals to be seamless parts of a society can produce truly stunning results. 

        One particular instance that stood out to me (I thought about it after Alex’s comment about planting flowers as public goods) occurred when a very large shopping center opened up in the ward next to the one I grew up in. After initial construction was over and the layout of the area was established, several hundred men, women, and children from the surrounding area gathered around the premises of the shopping center over two weekends to undertake a massive gardening operation. Whether these actions were motivated by a keen sense of social pressure, thoughts of business brought to the area by the collection of stores, or a willful altruism, the community very quickly accomplished a massive task which greatly benefited the area both economically (a beautiful store tends to draw more customers) and socially (people from the area developed relationships with one another, having fun and working in the process). But the greatest contributing factor as to why so many people came out to help garden was the deeply engrained social pressure every Japanese person feels. None of these individuals received payment for their work, but they nonetheless all contributed to an impure public good for the betterment of their community. An excellent example of a social cost/benefit motivating people to positive action.

Why You Did Not See Me at the Duke Game This Weekend

I usually never go to UVA football games. Something about standing on the hill for four hours under the hot sun watching my team lose just doesn’t sound very appealing to me. I could be using that time on Saturday to do something else, such as getting my public choice homework done. Therefore, my opportunity cost of that time is pretty high, probably around $10 an hour. Additionally, I have other costs of going to football games, such as transportation to the stadium and buying food/water. The overall MC of attending a football game is close to $50 for me. I also don’t particularly enjoy football, so I derive no utility from watching, and my friends do not exert any sort of pressure on me to attend.

However, I saw an email last week that piqued my interest in the upcoming game against Duke. The subject line was “Hoo Wants a Chance at Free Tuition?!” and within it, UVa offered in-state tuition to one student for the spring semester. All the student had to do was come to the football game to be entered in the raffle and be present at the 4^th quarter in order to receive it. The model we developed in class to evaluate the costs and benefits of voting came in handy when I made the decision whether or not to attend the game. My expected marginal benefit of attending the game was the amount of tuition, which is around $6,500 for one semester of in state, multiplied by the probability that I would win. There are currently 15,891 undergraduates at UVa. If we assume that approximately 1/10^th of students attend the game, then I have a 1/1,590 (0.063%) chance of winning. My expected marginal benefit is ($6,500)*(0.00063) = $4.08. 

            As you can see, my MC ($50) is much greater than my expected marginal benefit ($4.08) and that is why I did not go to the Duke game this Saturday. Maybe I have no school spirit, or maybe I'm just being rational. 

Costs of Collective Action in Nashville

On a recent trip to Nashville with friends, I was able to experience firsthand Buchanan and Tullock’s theory that collective action, just like private action, imposes externalities for the individual. When planning our itinerary, the Type A personality in the group (let’s call her Sharon) took control of the planning. Because I did not protest to Sharon’s self proclamation of itinerary czar, I incurred high external costs in that I had to endure costs as a result of the actions of others in the form of partaking in activities around Nashville I would not have otherwise chosen to pay for. For example, this dictator like decision-making structure resulted in an itinerary that allowed for much more time for shopping than I would have personally chosen. Now, according to Buchanan and Tullock, if I were a rational individual, I would try to choose a decision-making rule that would minimize the costs I expected to incur, at the time of constitutional formation aka the itinerary formation stage.

However, by passively allowing the Type A person to take over, my decision costs where extremely low or near zero. Here we define decision-making costs as: the costs one can expect to incur while participating in the whole set of collective actions defined by a single activity. This is a silver lining to my high external costs. Next time, I will advocate for a unanimous decision-making structure, to better protect my interests and to eliminate unwanted external costs. If that is not possible, I will act more rationally to maximize my own utility by either entering voluntary contracts that reduce externalities or by pushing for itinerary formation requirements that permit private decisions to be replaced by collective decisions instead.