Maybe our p value isn't so low after all?

 When we've talked about p, or the probability that an individual vote is decisive, in class, we have reasoned that in most US elections, this value is minimal, effectively 0. However, the most recent presidential election has taught us otherwise. According to this article, Georgia is preparing to recount the state's votes by hand to verify the results. There may be a recount in my home state, Pennsylvania. President Trump has been pursuing legal actions in a number of states to fight the results of this election. 

Clearly, the presidential (along with some House and Senate elections) were incredibly close in a handful of states this year. If you live in one of these crucial swing states like I do, then your p value is larger than you think. Sure, you likely did not and will never single-handedly decide an election. However, this p is still much larger than the p value for those that live in "safe" states, like the now reliably blue Virginia. This was also true in 2016, when Trump won Wisconsin, Michigan, and Pennsylvania by the slimmest of margins. In that election, turnout was not very high- the electorate didn't really believe there was an incentive to vote! But in 2020, turnout was at historic levels. It may be because more people felt that their p was higher, more people wanted to perform their civic duty, or maybe there was just a lot more self interest and expressive voting in 2020. I suspect that the third option is true. But the slim margins of victory in crucial states in the last two presidential elections have definitely proved that, if you live in the right state, your p value is not 0. Your vote counts. 

Majority Rule Runoff Election Takes Center Stage

    The Congressional seat runoff in Georgia has come to the forefront now that the presidential election has been decided.  Democrats will have control of the White House come inauguration day, January 20th, 2021.  The next major battle in United States politics is over which political party will gain control of the Senate.  Georgia utilizes the rarely used majority rule, runoff election format to pick the Senate members from its state.  After the election, no candidate was able to meet the majority threshold.  Now, a runoff election will take place in January with the top two vote-getters going head to head.  After one candidate is elected, then another runoff will occur to elect the second winner.  A majority, runoff election has never had a larger impact on the decision making process in the United States.

    The Senate contains 100 seats, and currently, there are 48 Democrats and 50 Republicans in the Senate.  The two seats that are up for grabs in Georgia could be pivotal since control of the Senate is hanging in the balance.  If two Democratic candidates can secure the spots, then the Senate is split 50-50, and the Democrats will effectively have control over the Senate.  They will have control because in the case of ties the vice president, Democrat Kamala Harris, will cast the tie breaking vote.  If one Republican candidate is able to win either runoff, then the Republicans will retain control of the Senate. All eyes in the political world will be focused on the majority rule, runoff elections in Georgia for the next couple of months as the struggle for political power in the United States continues.

The Butterfly Ballot Incident

 Last week, Americans painstakingly checked their phones for days in hopes that the election results would finally come in. the last time citizens have been made to wait past election night was 2000, and it took over a month instead of a few days. The country waited on Florida's recount, as the margin was too close to call between Gore and Bush. Palm Beach County faced particular controversy in their recount process due to a design flaw in their ballot. The butterfly ballot design led to over 2,000 democratic voters democratic voters to mistakenly vote for the Reform party candidate, Pat Buchanan, leading to Bush's victory in a traditionally blue county. Since Bush won the state of Florida by less than 2,000 votes, and in turn the election, this design flaw in one county multiplied into a presidential election scandal.

Through our discussions of Condorcet's paradox (and our class constitutional convention results), we have explored the importance of voting rules for outcomes. In the Bush versus Gore election, if the voting rules had set forth a uniform ballot design instead of allowing Palm Beach County to choose the confusing butterfly layout, Al Gore would have won the election. Isn't it crazy to think that a simple design flaw in one county determined the presidency.

photo of butterfly ballot: 

The ballot was so confusing because the second hole punch was to vote for Pat Buchanan. A hasty voter could very easily mistakenly think that this second hole punch was for Al Gore.

 

 

Voting with your feet in the age of COVID

 Tiebout's Pure Theory of Local Expenditures paper makes a lot of assumptions -- some more unrealistic than others. Though the assumptions of perfect information, perfect mobility, and lack of externalities between localities (among others) remain unimproved by the Coronavirus pandemic, it's much easier to make a decision to move when you can continue telecommuting to your old job. In this article by the Kinder Institute,  authors suggest that for companies continuing the remote work model, employees could end up working from the location of their choosing. A poll from Gallup even found that most workers don't want to go back. This will affect recently graduated college alumni in particular, who are applying to jobs that aren't tied to a location at all. 

In a world where your job is in your computer, objections to Tiebout's occupational mobility assumptions are rendered useless. While not everyone will adopt the telecommuting model, many will take the opportunity to vote with their feet to a new location that better suits their preferences for the provision of public goods. 

SCOTUS: A Case for Term Limits Over Court Packing

Olson speculates that the free rider problem becomes more relevant in the context of large groups as opposed to smaller groups. By expanding the number of SCOTUS seats, the influence of each justice on the groups decision would be reduced and potentially lead to rational ignorance or lack of effort by a justice to assert their viewpoint as the decisiveness of their decision would be reduced. Really, the only consequence that justices face is scrutiny of the public eye. By keeping the SCOTUS smaller, this scrutiny is greater for each justice, thus encouraging them to make decisions more reflective of constitutional principles and the constituencies that led to their appointment in the first place.

 

Even with just nine justices, an analysis by Kalt and Zupan reveals a significant principal agent problem between the SCOTUS and the American people. Justices have lifelong appointments to the court and thus have few monitoring procedures in place to mitigate shirking of constituent ideologies. In fact, after their appointment, the market never meets again to assess whether a justice’s job is approved of. Since justices are approved by the Presidency and the Senate, there is an immense incentive for voters to remain rationally ignorant. If people have no incentive to acquire knowledge about a political candidate, they certainly have a smaller incentive to obtain knowledge about potential court appointees, and vote for politicians based on their preference for a particular judge. Knowledge surrounding when court seats will open and potential appointees, is extremely difficult, if not impossible to find. Lastly, justices essentially have perfect monopolies over their seats as the barriers to entry are extremely high, so high that the justice either has to be criminally convicted, resign or die to be replaced. Enacting term limits, with the potential to be reappointed, should reduce the principal agent problem. This would institute a performance review method to better align SCOTUS (agent) and American Peoples’ (principle) ideologies over time. Term Limits would also make SCOTUS appointments more predictable. Staggered term limits would ensure each Congress and Presidency gets a specific number of appointments, thus making the SCOTUS more of a prevalent issue to voters in Presidential and Senate elections. This should lead to judges whose ideologies better align with those of the people.

Liquor stores have captured the market for cold beer in Indiana

Previously in class, we have discussed Stigler’s capture theory, in which an industry will utilize its political power to try and acquire regulations that will benefit their economic profits. This often occurs through campaign donations and other types of “legal” (often illegal) bribes and favors to politicians that will convince the politician to act and vote in the industry’s interest.

Indiana has a law that has consistently been protected by state legislators, which restricts certain businesses from selling cold beer. The ability to sell cold beer in Indiana is exclusive to only liquor stores, while grocery and convenience stores are restricted to only selling warm beer. This is obviously very significant because anyone who would like to purchase a cold case of beer for day-of drinking must go to a liquor store in order to avoid waiting for the beer to cool in the fridge. Personally, I don’t think I’ve ever bought beer from a liquor store, so this seems sort of crazy to me, and I imagine grocery stores, especially, suffer the most economic consequences of this law. Liquor store owners in Indiana have donated large amounts of money to campaign funds in order to keep this bill in place, and as a result their profits must be much higher.

Shirking in the NHL

 The main idea of the capture theory is that representatives will serve the economic interests of their constituency which will get them reelected. The NHL provides a great example of the capture theory in action. Though the NHL carried out a successful, COVID-free postseason, scheduling the regular season is not as simple. Gary Bettman, the NHL commissioner since '93, has faced challenges throughout his tenure with the NHL such as labor lockouts, expanding the league, and now a national pandemic. Bettman has also proven to be a profit-maximizing commissioner, increasing NHL revenues since he started in this position. Bettman not only seeks to maximize utility for himself in raising revenues (and likely raising his salary in doing so), but also has to look out for the best interests of the teams he works for. 

In considering the COVID risks and struggles that come along with restarting the regular season, Bettman and his group of executives have devised several plans to best start the season. These options range from operating inside a few bubble-like hubs, traveling semi-normally (much like the NFL and MLB have), or even shutting down for the year. Bettman has to juggle which option not only expresses his social interests but also the economic interests of the teams he represents. Bettman has an incentive to shirk, thinking about his own utility by increasing profits by reopening all stadiums and having a near-normal season. Yet, Bettman is likely not to do so because his job hinges both on his economic success and his ability to appease majority of his teams. Bettman has a clear, yet challenging task: get the NHL back on track with as few COVID cases as possible. His executives and the teams coaches, players, and managers are likely to monitor his plans and be consulted with throughout this decision-making process. Additionally, Bettman has already received lots of feedback about the Edmonton and Toronto bubbles, and these "performance reviews" will likely affect the future of the 2020-2021 season. Finally, there are several, qualified executives who, I'm sure, would be ready and willing to take Bettman's place if this NHL season is a failure. Therefore, shirking will probably not be an issue, especially since Bettman has proven time and time again that he can withstand any challenge that comes his way. I'm sure that he will be successful in capturing both revenues and reelection with whatever plan he employs for this upcoming season. 

My Personal Nemesis

 Professor Coppock, I hear you loud and clear re the DMV. They're the worst. Or at least they're the worst bureaucracy in the US. I'll see your DMV and raise you the Nicaraguan National Police.

This bureaucracy suffers from both of the sources of slack that we discussed in class the other day. It is extremely difficult to measure what the 'output' of the police is and even harder to measure what the 'output' should be. Are the police working merely to maximize the number of arrests or the amount of material goods that they bring in through fines and confiscations. Are they working to minimize the number of wrongful arrests and trying to improve relations with the community? I would argue that the majority of the Nicaraguan Police force is working to satisfy the ends posed in question number one. This is done to satisfy the desires of their bosses but also to maximize their own power and utility. They are also a monopoly supplier as there are no neighborhood watches and no community support systems that people can go to instead of the police. Because of the this the police know that they don't have to be efficient or even helpful. You have to put up with them because they are your only choice.

I know for a fact that this is how the system works because I have had to deal with it personally. I was driving in Nicaragua and my car was hit by a drunk driver. The drunk driver bribed the police to file a report saying it was my fault. The police took my license meaning I had to sit in line for 5 hours at the precinct (while they allegedly were doing paperwork) and then bribe them $20 to get it back before I left the country the next day because there was no other system or institution for me to appeal to. The police won on all fronts because they got to move towards their quota for tickets, they got a bribe from the drunk driver, they got a bribe from me, and they got their regular paycheck for 'doing' their job. I guess you could also say that they won because they got to exercise power over me. Luckily I have only had to deal with this kind of thing once but it happens with such alarming frequency throughout the country that it is even mentioned on TripAdvisor reviews.

The system is so frustrating and corrupt that one time when my mother was wrongfully pulled over by the police she simply thrust her joined hands out the window and pleaded 'just take me to jail'. To her this was the easier alternative than having to deal with all of the inefficiencies and corruption of the Nicaraguan police bureaucracy.

The "Wrong" Coasian Solution

 In my last blog post, I explained that I provide the collective good of washing the dishes because my personal benefit exceeds my roommates. This allows my roommates to free-ride off of my provision of the collective good due to the group being a privileged group. However, this past week one of my roommates offered to pay me to keep doing the dishes. This shouldn't make sense, because he has the property right to use plates as he sees fit and his cost is greater than his benefit. If an outside observer doesn't look too closely at the situation, it would seem like this is not the result that Coase would expect. 

  This seems to be a misallocation of resources because he can free ride instead of paying me anything. However, roommates tend to have interdependent utility because their daily activities often involve interactions with each other. My roommate paying me raises his expected utility because now I am less likely to loudly rant about how no one does the dishes and am more likely to help him when he needs assistance. The amount he paid me represents a portion of his valuation of dishwashing. As a result, I now get some producer surplus from doing something that I am already inclined to do based on my own utility function.

My Experience with the Italian Consulate

Spring of second year I decided I was going to study in Milan, Italy for Fall Semester 2019.  Preparing for my journey, I needed an Italian Student Visa. I assumed this would be no problem, I had 3 months to make it happen. Turns out Italy is one of few European countries that requires an in person interview to obtain a student visa. So, the UVa study abroad office explained to me that there were four ways to get my visa:

1. Visit the Italian Consulate in Washington DC. Easy enough. I gave them a call to set up an appointment but unfortunately they only grant visas to DC or adjoining county residents. 
2. Visit the Italian Consulate in Philadelphia. I figured I could make a trip out of it, I've never been to Philadelphia. They said they would be glad to meet me but the next available appointment is in 4 months.
3. Visit the honorary Italian Consulate in Virginia Beach. I called to make an appointment- "sorry I’m very busy and don’t know when I can meet you- call back next week". 
4. Visit the honorary Italian Consulate in Charlotte, NC. I called to make an appointment but they can only meet with North Carolina residents or students.

After a couple more calls to the honorary consulate in Virginia Beach (my only option) he agreed to meet with me. I drove 5 hours just to meet with him and have him sign my application. The total meeting time was less than 5 minutes and provided me with no benefit that the other consulates could not have- but rules are rules. This reminded me of our class lesson on bureaucracy. These requirements and hoops I had to jump through to get a visa did not appear to add any value. They are a monopoly supplier- there is no competition for efficiency and no alternative source of information. I had to follow their rules and how they enforce them even though there are much more efficient ways to get this process done. Also, they were the only people I could contact to gain information on the process. Overall, this has lead to slack in the system with no incentive to fix- the consulate is going to get paid no matter what.  

A COVID Constitution

When students returned to Grounds in August and September, they knew that an unusual semester awaited them. With UVA moving classes completely online and establishing strict social distancing guidelines, everyone was contemplating how they (and their households) would approach the unprecedented circumstances.

Using this Wikihow as a guide, my roommates and I established a roommate agreement that everyone in the house would unanimously agree to adhere to. As Buchanan and Tullock explain in Chapter 6 of the Calculus of Consent, requiring unanimity would limit our external costs, which is exactly what we aimed to do. By hopefully increasing the degree of obligation we felt towards respecting the constitution, unanimity would also limit free-riding. Thus, in coming up with the components of our roommate agreement together, we ensured the creation of a constitution we would all agree to respect. Although this led to higher decision-making costs (i.e. the discussion, collaboration, and development of the agreement), we minimized the negative externalities that we would impose on one another if we had no set rules. An example of a negative externality we hoped to avoid would be bringing undue risk upon each other by not following social distancing guidelines and proceeding to share common areas in the house. The constitution stipulated that we maintain social distancing outside the house and that we keep our social circles small; limited to 4 people outside of the household and not including “risky” individuals. I believe the establishment of the roommate COVID constitution was well worth the decision-making costs involved because by establishing our expectations of one another, we greatly decreased the negative externalities we may have otherwise imposed on each other this semester.

Why I Voted

 After learning about rational abstention and the median voter theorem in class, I gave serious thought to not voting in this election. I'm someone who has voted in almost every yearly election since I became of age, save for when I was studying abroad. However, I figured that it would be nice to save time on not driving to the polling place and waiting in line. I consider myself a liberal, and since Virginia is a blue state, I didn't think that the odds of my vote deciding how Virginia would go would be very high. When I told my boyfriend that I was leaning towards not voting, he didn't really get it and said that if everyone decided to rationally abstain then the system wouldn't work. Instead of getting into an argument over this I just decided I'd go vote, and I waited in line for an hour. I decided that the temporal cost of voting was lower than the potential temporal cost of arguing and the emotional stress from arguing. I think this is a perfect example of how social pressure can cause rational people to vote even if they don't really think it'll make much of a difference in the outcome.

The voter turnout amongst 18-29 year-olds has increased by millions since the 2016 election. I believe that social pressure has a lot to do with this. Influencers and high-profile celebrities alike have used social media to encourage followers to vote, from giving information about registering and finding a polling place to outright stating which candidate they support. Young people have been holding their friends accountable for voting, and have used social media to make voting somewhat of a trend to give their peers a fear of missing out. In many cases, rational young people like me decided that the costs to them of voting in this election were less than the costs of the social consequences of not voting. 

Prisoner's Dilemma and the 2020 Election

    Throughout the past year, Democratic presidential candidates campaigned to be the candidate to go up against Donald Trump in this year’s election.  Bernie Sanders was a near lock to secure one of the top spots and all of the other candidates seemed to be fighting over who would be his main competitor.  Candidates such as Joe Biden, Amy Klobuchar, and Pete Buttigieg were facing a prisoner’s dilemma.  If each of these candidates pursued their individual goal of becoming the Democratic candidate, they would actually be helping Bernie Sanders.  They would split up the votes among them and leave Bernie Sanders with a clearer path to securing the candidacy.  The path to a Democratic candidate eventually being elected President of the United State in the 2020 election began by solving this prisoner’s dilemma.

Politics can be self-serving since each individual politician wants to help out his or her party, but usually not at the expense of their individual success.  Politicians working in tandem as opposed to looking after themselves is more the exception than the norm.  However, the Democratic party was able to have its candidates put aside their own interests and rally around one person who they thought had the best chance to secure the presidency, Joe Biden.  Since all of the candidates eventually dropped out and focused on helping the party instead of themselves, the optimum outcome was achieved.  If each acted selfishly, who knows how this election would have turned out or if Joe Biden would have even been the candidate at all?  The Democratic Party was able to solve its prisoner’s dilemma.  As a result, Joe Biden defeated Donald Trump this week to become the 46th President of the United States.