When my two best friends and I are faced with the decision of where to eat dinner, we all shy away from choosing. We all just want to go with the flow, and let someone else decide. None of us are very picky eaters, and we like a lot of the same places, so we all end up pretty happy no matter where we go. But if we all have to decide together, it becomes super hard to agree because we all want to default to what the other people want to do. “No, let's go to Roots because it’s your favorite!” is followed by “No, let's go to Guad, it's your favorite!” and we all go back and forth until someone can finally stand to agree to go to their favorite place.
In Public Choice, I learned more about this predicament. Collective action has two kinds of costs: external costs and decision-making costs. External costs are costs one is expected to incur as a result of actions. In this case an external cost would be how upset I get when we choose to go with my friend's choice for dinner, which is very little. Decision-making costs are costs one is expected to incur during the whole set of decisions associated with a single activity. The back-and-forth we must endure are the decision-making costs in this scenario. Because none of us mind if someone else gets to choose where to eat and it is very hard to agree, our external cost and decision-making cost graph gets completely skewed. A simple majority is not the best way for us to decide where to eat; it is the most efficient for us to let just one person decide.
No comments:
Post a Comment