The Cost of Increased Voter Turnout

During our last class I hypothesized that the rise of social media should lead to increased voter turnout through its impact on expressive utility. Social media gives a user the ability to share with their friends that they have voted, allowing this user to gain expressive value from others knowing that they voted. Assuming that what is posted on social media is mostly true, and I realize that’s a large assumption, I posited that voting rates should have increased with social media’s rise in popularity, because people are able to vote and then easily let their friends and family know that they fulfilled their civic duty.

But what if social media has had impacts on other aspects of D? A common tactic to increase voter turnout is called social pressure messaging, where groups mail postcards to potential voters letting them know that their voting record and participation record are public. Katherine Haenshen lead a study to see if social pressure messaging could effectively be done with Facebook statuses and tagging, and her team concluded that social pressure on Facebook could also increase voter turnout. 

Now, after having seen the positive effects of social media on voter turnout, I need to get back to my original assumption that people are truthful on social media. Or even more importantly, that the people on your twitter or Facebook feed are even real people at all. Our last presidential election cycle was inundated with fake news and Russian bots whose aim was not to promote democracy, and our society has yet to find a solution or even agree on the existence of election interference. Another negative aspect of social media is the ability to only see posts and articles from one side of the political spectrum. This self-censorship means that we are not engaging with people whose views are different from ours, which has further negative implications for the future of democracy in our country. While social media has positive impacts on voter turnout, it also has negative impacts on the democratic process. Is our society better off because of social media, or do the con’s outweigh the pro’s, especially when one vote is not going to decide the outcome of an election?

Friendly Reminder: Don't Forget to Get Your Flu Shot!

On October 2^nd, I was seated in my room studying for an exam. All of my housemates came clambering in exclaiming that they were on their way to Newcomb to get a flu shot. I had received the email and had planned on going, but I had not yet finished studying for my exam. However, as I was sitting there, I thought back to our class on externalities. I realized that if all my friends, and hopefully a large portion of the UVA community, went to receive their flu shots I was gaining all kinds of benefits without compensating them for their costs. My friends receiving the flu shot would produce positive consumption externalities for me. Their consumption of the flu shot would reduce their chances of contracting the disease in the future. It would also make me less likely to contract the flu from them, without having to receive the flu shot myself. With this in mind, I texted everyone I knew, posted on Facebook, and posted in Groupme to remind everyone to go get their flu shot and continued to study for my exam.

For every individual then, the private marginal benefit is lower than the social marginal benefit of receiving a flu shot. There are additional benefits given to society due to any individuals’ consumption of the good that they are not compensated for. The society is less and less likely to contract the disease as each individual receives immunization from the disease. Because of this, there will be under-consumption and non-allocative efficiency when it comes to flu shots. As a free-rider, I receive some of the benefits of others receiving their flu shots and contribute nothing. I help contribute to the under consumption of the flu shot. 
However, there are many great benefits to getting the flu shot. So get on out there and get your vaccine!

How Simple Majority Rule Has Cost Lebron James Tens of Millions of Dollars

When Lebron James left Cleveland for Miami in 2010, the value of the Cleveland Cavaliers dropped from $476 million to $355 million in one year. That's a 25% decline. In other words, Lebron James, who was paid a little over $14 million in 2010-11, was worth over $120 million to the Cleveland Cavaliers franchise. Fast forward eight years and Lebron is leaving Cleveland again. If the Cavaliers see a similar decline, then they would lose about $300 million in value. Yet, Lebron is being paid only about $36 million dollars a year. Why then, is someone clearly so valuable to a franchise, being paid relatively little?

In a Planet Money podcast about this very issue, they mention many reasons why Lebron is being underpaid. However, I am going to focus on one reason: simple majority rule voting. In the NBA, there is not only a salary cap (which limits how much each team can spend on players each year), but also a maximum salary per player which is agreed upon by the NBA Players Association. It may seem weird that players would want to limit their own salaries, but when you take a deeper look at it, it all makes sense.

First, we are going to operate under the assumption that there must be a salary cap (this ensures that teams in large markets and with owners with bigger wallets can't just buy every superstar player). Next, we are going to assume that the NBA Players Association votes using majority rule (as the Planet Money podcast indicates), and that each player in the NBA has an equal vote. Finally, we are going to assume that there are two possible positions a player can take: no maximum salaries or maximum salaries. Let's think about this. Obviously superstar players will not want maximum salaries. However, bench players will want maximum salaries. If each team is only allotted a certain amount of salaries under the salary cap, lower-level players will not want teams spending all of the salary cap on superstars.

Now we can take a page out of Mueller's book about majority rule voting, specifically median rule voting to determine the outcome. Mueller describes a theorem that states that the person in the median position of a single-dimensional issue cannot lose. Thus, we need only to turn to the median player to determine whether or not we will have maximum salaries. Since most players in the NBA are not superstars, the median player will not be a superstar. Thus, this median player (who can be thought of as the worst starter or the first or second man off the bench), would want to limit the amount of money that superstars make so that he can make more money. This is why (in a very simplified manner) the NBA has maximum salaries, and why Lebron James (and all superstars for that matter) should garner our pity for only making nearly $40 million (not including endorsements, etc.).

A Senator's Dilemma

After discussing the prisoner's dilemma in class, I searched for a prisoner's dilemma in politics. In her blog post, Colette described how a prisoner's dilemma might transpire in Congress. Other thinkers see a prisoner's dilemma playing out in the Supreme Court confirmation hearings. In his article, “Games Congress Plays: The Judge Kavanaugh Edition,” Evans argues that the Democrats erred by confirming Gorsuch after the Republicans refused to confirm Garland. (Please note that this article was published before the allegations of sexual assault against Judge Kavanaugh). Evans views the confirmation hearings as a prisoner’s dilemma game with multiple rounds in which players with full information can take disciplinary action against their opponents when the opponent defers to a non-cooperative strategy. In a multi-round prisoner’s dilemma, players can arrive at the cooperative strategy by using a system of punishment and reward in which an opponent’s choice to act non-cooperatively is punished on the next round with a non-cooperative response or the opponent’s choice to act cooperatively is subsequently rewarded with a cooperative response.

While on the surface, Supreme Court confirmation hearings appear to adhere to the tit-for-tat strategy we expect to see as a result of a multi-round prisoner's dilemma, this situation is anything but. In the true prisoner’s dilemma, both players must have a dominant strategy and the mutual pursuance of that dominant strategy must result in a pareto-inefficient outcome. In the Supreme Court confirmation hearings, however, neither player, let's call them R and D, has a dominant strategy whose mutual pursuance results in a pareto-inefficient outcome. Therefore, while the Supreme Court confirmation hearings may result in a dilemma for some senators, they are not a true prisoner's dilemma.

Why am I voting?

This past week's class led to a lot of self-reflection for me as I had just received my absentee ballot for the Texas mid-term elections. To be honest, the application for an absentee ballot was not the most simple thing to fill out and to actually make it to a mailbox was a surprisingly difficult task. As I looked at my absentee ballot after class, I wondered to myself why a fairly politically ignorant person like myself was bracing the opportunity costs of voting for the first time, and in return for what benefits exactly?

This brought me back to our discussion of Johnson's equation of the expected marginal benefits of voting and made me think hard about what the unknown variable of D was that could've possibly balanced out my voting costs of filling out a lengthy government ballot. This question brought me to a variety of possibilities all circulating around the Texas senator race everyone is talking about back home. The Senate race between Ted Cruz and Beto O'Rourke has been hot in the news for a variety of reasons. A big part of this equation in the case of the Texas Senate elections comes from the expressive value among millennials supporting Beto O'Rourke. Through social media and yard signs and Beto O'Rourke t-shirts, Texas millennials are supporting the democratic candidate left and right. Perhaps the social benefit and expressive utility I get from voting for Beto and posting a Facebook status about it is enough to outweigh the cost of voting? 

Or perhaps it all comes back to our tendency to overestimate just how close this race for Senate actually is? The media has been buzzing about the closeness of the race between O'Rourke and Cruz, so maybe it all comes back to the minimax regret hypothesis that Mueller discusses. This would cause me to vote simply to minimize the regret I would feel if my vote could have been decisive for Beto's victory. Although my chance of casting a decisive vote is very small, maybe the risk of allowing my candidate to lose because of my missing vote causes me to vote despite the costs? 

After all of this self-reflection, I think variable D could be a combination of factors: civic duty, the pride of voting as a Texan, or being able to truthfully tell my grandpa that I voted. Whatever those factors are, the combination of them in addition to the benefits I would expect if the results of the election go my way must be sufficient enough to outweigh the relatively small costs of putting my ballot in the mail.

Venezuela's Dilemma

           The oil-rich country of Venezuela was once one of the most promising economies in South America. Today, however, Venezuela is the most dangerous country in the world.  The shift from prosperity to complete depravation can be explained by the economic downturn that has ravaged through the country, primarily due to corrupt government policies that started with the late President Hugo Chavez. New leadership under Nicholas Maduro has only made the situation worse, causing the economic crisis to reach unprecedented lows. People are starving, people are suffering, and violence has become the solution. For example, gangs have been specializing in the art of kidnapping and holding individuals for ransom in exchange for dollars that they then use to provide for their families.

Kidnapper A/ Kidnapper B	Don’t Kidnap	Kidnap
Don’t Kidnap	(13,8)	(3,10)
Kidnap	(15,2)	(5,5)

            Our discussion of the Prisoner’s Dilemma helped me think about the tragedy of Venezuela from a different point of view. Say you have two individuals, A and B. They are both faced with the same choice: to kidnap or not to kidnap in order to provide food for their family. Due to the anarchic nature of Venezuela, i.e. there is little or no government intervention, the players will choose the dominant strategy of kidnapping, leaving us at the pareto-inefficient equilibrium (5,5). Both kidnappers are able to provide for their families, making neither of them worse off. However, in an ideal world where the Venezuelan government would intervene to stop the violence, both individuals would choose not to kidnap leading us at the pareto-efficient equilibrium (13,8). 

Venezuelans hope that one day our country will no longer be described as the most dangerous country in the world. However, it will take decades to repair the damage that has already been done.

Weekend Game Theory Musings: Just for (Penalty) Kicks

When I arrived at my home this past weekend, I was greeted with the familiar sound coming from my family room - lightning fast, British accented, and increasing pitch - Premier League commentators. My family has always been a soccer oriented family, with both of my younger siblings playing at a high level (not to brag, but), leaving me the odd non-soccer-player. I joined my brother on the couch to watch the climax of the game: penalty kicks.

To anybody who has watched soccer, penalty kicks are arguably the most nerve-wracking and dreaded outcome of a 90 minute match. Not only are the players exhausted, but the immense pressure of the one on one face-off is enough to make even the greatest players fail to deliver. This face-off can in fact be modeled as a game in an economic sense.

Both the kicker and the goalie must make decisions simultaneously - it takes on average 0.5 seconds for the ball to reach the goal, and 0.6 seconds for the goalie to move from the center to either side of the goal. The kicker must make their decision without giving any signal to the goalie, because of the power needed for the ball to hit the net such that it wouldn't be considered "an easy save." Consequently, for the goalie, their move will mean completely abandoning any hope of saving the ball should they have guessed incorrectly. When making the decision, both must take into account their own expectations of how the other will move.

What is interesting is that the preferred shooting foot of the kicker is not necessarily the optimal outcome for them. With sports player statistics being a public obsession and information readily available, it is not far-fetched to imagine that goalies at the professional level have an understanding of what side the kicker prefers/is more accurate with, and vice versa for the kicker knowing the goalie's stats. With this symmetric information, suppose we take a right-footed kicker: they are more likely to score on the right than the left, but the goalie may anticipate this preference and be more likely to save the ball by moving to the right. This would mean that on average, anywhere the kicker shot to would have an equally likely chance of resulting in a goal. What it comes down to, then, is how strategic the kicker can be in randomizing their shot location such that the goalie is not signaled and the kicker can be victorious.
This can have interesting economic implications when we consider the considerable monetary value that the players have which depend on the outcome of their matches, and the industry as a whole having incredible financial power. Logically, if penalty kicks will result in a random outcome, more money should be spent on gathering players who can score and defend effectively without resulting in PKs.

I'm hoping I can impart some of this wisdom on my teenage siblings over fall break, but I'm sure this will be another moment where the ignorant older sister tries to be relevant... I'm not ignorant, my opportunity costs of becoming fantastic at the sport are just much too high!