Voting Procedures and Fantasy Football Punishments.

 Myself and my 8 housemates decided to make a fantasy football league this season. Like most leagues I have been in, deciding on a punishment for the losing team was very difficult. Different members of the league had very different opinions of what type of punishment they thought would be most appropriate for the winner of our Sacko Bowl. While the method we used to decide the punishment was not very democratic, it is interesting to think about what outcomes different voting procedures could have produced and which one is most desirable.

After debate, there were three options that had considerable support. A more extreme punishment(option A), a moderate punishment(option B), and a punishment that was only really supported by one member(option C). A majority rule was not suitable for this situation as there was no one option that would capture the majority of the votes. The two next potential options would be a Hare method(same as a runoff in this situation) and a Coomb method. Under the Hare method option A would have likely won as the option C voter would likely take option A second. Under the coombs system, it is very possible that option C could win as both option A and B had many voters who would rank them last. This outcome could occur whether the Coombs method described in Mueller was used or a Coombs method that is described here is used(there can be a difference). When looking at this situation, I believe that a system that doesn’t compel many people to do something they strongly oppose is wise. Although a Coombs method might elect an option that does not have a large enthusiastic following, I still think it could be an appropriate way to decide our choice.

The Convergence of Gas Stations

Over Fall Break I drove to Harrisonburg to visit a friend for the afternoon at JMU. As I was leaving I realized I needed to get gas, so that I didn't get stuck on the highway on the way back Charlottesville. As I was looking around for gas stations, I determined that a majority of the gas stations in the JMU area are all right next to each other. This is a great example of Downs' Spatial Location Theory. These establishments set themselves up right next to each other so that they can attempt to capture the greatest portion of the customer base. This approach was successful for these firms because due to the similar location of the four gas stations near me, I decided to go to the one that was a couple cents cheaper because it would save me money (these four were within .2 miles of each other). While in the grand scheme of things this decision likely saved me no more than .50 cents it felt like a good decision because the lower price compelled me to choose the station. 

The difference in cents is like how the Spatial Location Theory applies to voters. If parties move to the middle of the spectrum to capture the median voter the small differences in policy will capture more median voters and determine the outcome of the election. While there really wasn't much of a difference in the gas stations that I had access to, the smallest difference that had little to no true effect on me led me to make a decision on the gas station that I would 'vote' for because I felt that the gas station maximized my utility the most.

And the Award goes to... Rank-choice!: A Brief Analysis of the Oscars

The Oscar Awards have been around for around 92 years now. The very first awards were presented in May of 1929, and around 6 months later, the worse economic disaster in history brought America and the World to its knees. Among other such disasters, the Oscar Awards have always been mired in controversy and cronyism. The Hollywood Elite simply hand each other awards and pat their friends on the back. However, in recent years, efforts have been made to change the mechanics of the Oscars. As of December 2020, there are now 9,427 eligible Oscar voters, which represents the largest pool of voters in the history of the award ceremony. Now more than ever, a definite system of voting must be enacted in order to determine the pinnacle of filmmaking achievement: the Best Picture Award. The system chosen for such a lofty task is (drum roll please)... Rank-choice Voting. While seemingly dull sounding, this particular system scratches an itch which frequently annoys Economists: the Condorcet Paradox, where cycling would inevitably occur without determining an outcome. Under Rank-choice, statistically, the Condorcet winner, defined as a winner of an election who would win in a pairwise election against any single candidate in the race, is more likely to be chosen, but not so often as the Coombs or Borda systems. Rank-choice places emphasis on rank, allowing voter preferences to be more equitably distributed and represented. All of the voter preferences are considered and signified by their ranks. Hundreds of films are submitted to the Oscars and the top films must achieve 5% of the 1st place ranks to be considered in the next round, which usually means the top 10. When voting officially for Best Picture, the Oscar voting system actually becomes a hybrid of Rank-choice and Borda. The voters place all 10 films considered for best picture in their individual ranked lists. Afterwards, Film A could receive 30% of the 1st place votes while Film B receives only 20% of the 1st place votes but 80% of the 2nd place votes. Instead of Film A winning, Film B has accrued enough "points" (points in quotations because it is not mentioned that the films receive points, but the system mimics Borda which utilizes points) from the overwhelming second place votes to win Best Picture. Even though it's a complex system, it still represents more of the voters' preferences and we, the public, can finally see what the best movie is (ha ha ha). 

The Problem with Unanimity in EU Member State Voting

The European Union prides itself on being a pinnacle of liberal democracy and has applauded its own skills in influencing the growth of democracy in other European states as well. In the early 2000s, there was a push to expand European Union membership Eastward. Hungary and Poland, historically the largest recipients of EU aid, quickly became poster children for the democratization and integration of post-soviet countries into EU, but began the process of de-democratization only a few years after joining the Union. Since then, unanimity voting rules in the European Union – which carry major consequences for economic, social, and political functions of member states – have put the stability of the Union in danger. This was most clearly demonstrated when Hungary and Poland blocked funding for the 1.8 trillion EUR coronoavirus recovery package in 2020 as a reaction to an attempt to make EU funding conditional on democratic aptitude as measured by the Rule of Law reports (which Hungary and Poland were failing). Perceiving a threat to a major source of their funding, Poland and Hungary blocked the recovery bill until the Rule of Law Conditionality Regulation (described above) was removed.

While, as Buchanan and Tullock write in Calculus of Consent, unanimity voting rules can be used to make certain that one's own human and property interests are protected – especially when such interests are as important as those under EU purview – such rules can also pose a major threat to actors when the alternative is forced inaction. In this case, EU citizens in need were initially denied the help that they so direly required by members that, altogether, contributed less to the Union in terms of funding and failed to share the Union's democratic ideals. The lesson is perhaps this: Group membership should be selective and members reasonably homogenous where unanimous voting is in use if an effective decision-making process with external validity is to be established*. This is because in groups with heterogenous interests, members will be tempted and might succeed in leveraging regrettable solutions in exchange for their approval on highly important ones.

* Especially where excludable (membership-only) goods are concerned.

Spatial Location Theory in ATL

     Over fall break I went to visit my best friend from high school. She goes to school in Kansas, so I obviously flew to see her. I flew out of Richmond and had a connection in Atlanta. My layover in Atlanta was 40 minutes. I had just enough time to get dinner! I got off my flight and immediately looked for food. My plan was to walk the whole concourse and then pick which place looked the best. While I was walking through concourse C, I realized that the Atlanta airport was the perfect example of spatial location theory! Majority of the restaurants and food were located in the middle of the concourse. 2 Starbucks, 2 Chick-fil-a's, and a Jersey Mikes all within feet of each other, as shown on this map. 

    In the Atlanta airport, there are multiple fast food restaurants, all producing the same type of food, within a given concourse. This explains spatial location theory perfectly. If there are multiple firms producing similar/identical output within a given territory, eventually they will end up in the middle. This is because the middle minimizes walking distance for consumers and they want to beat out competition. They pick these points to maximize profits and foot traffic. And let me tell you, there is a lot of foot traffic at the Atlanta airport! This is similar to the example we talked about in class with Peter and Christina selling hot dogs on the beach. At the beginning Peter and Christina start at different locations on the beach (equal distance from the middle) but as one of them gets closer and closer to the middle so does the other. This is because when one of them moves closer to the middle, they are gaining more customers. Eventually, it is a race to the middle. This race towards the middle is what is reflected in the Atlanta airport, they want to serve the median to maximize profits. 

Netflix Free Rider

 

    I play on the softball team with twenty-four other girls. We spend countless hours at our stadium with each other, which means we need ways to entertain ourselves. We are fortunate enough to have a big flat screen TV in our team lounge. In order to watch TV, you have to have apps like Netflix, Hulu, and Prime Video. An old teammate of mine, Kate, was nice enough to log into all of her accounts on the TV. The entire team just has to click on the app of their choice, and they are free to watch any movie or show. The thing is... Kate graduated three years ago.

    This is a prime example of the Free-Rider problem. We have been using Kate's accounts for the past three years. The whole team loves watching Hulu, Netflix, and Amazon Prime, but no one wants to pay for it . We have zero incentive to buy a Netflix or Hulu account for our locker room, because Kate is paying for us to watch on her credit card. This can create a market failure in Kate's house, because she gets a notification saying she can't watch Netflix or Hulu, due to an overload of viewers. The IP address of our stadium is different than Kate's home. Kate is paying for others to watch movies and shows, and she can't even watch herself. The solution to this problem would be for UVA Softball to create a Netflix, Hulu, and Prime Video account of their own. The accounts would be on the team budget, and we would log into those accounts on our television. Netflix is starting to crack down on their account sharing, as well. We might be in deep trouble. 

The Social Marginal Costs and Benefits of Reintroducing Gray Wolves

     On the 2020 Colorado ballot, I was asked to vote on the reintroduction of gray wolves into the wildlife of Colorado by the end of 2023 (to the west of the Continental Divide). I researched what this would mean for Colorado residents, and what the social marginal cost (the complete cost faced by society for producing one more unit - or in this case reentering one more wolf) and social marginal benefit (the complete satisfaction or increase in welfare society experiences with one more unit or action taken) would be for residents.

On analyzing and researching the total cost, there is obviously the financial cost that would come from monitoring and reintroducing the animals back into society. Funds would primarily come from the division of parks and wildlife. Additionally, there is the financial burden of compensation for whatever damages these wolves cause for farmers mostly a focus on the human and livestock interactions with wolves. There is the social cost for ranchers who are deeply concerned with what this would mean for their way of life and the animals they depend on for profits. There is another external cost in ways of human and tourist interaction with the wolves. Ultimately, they are predators, and the population of the state, as well as the number of tourists enjoying the mountains and outdoor activities has increased significantly since the wolves were last roaming. There is an increase in danger to humans and their pets in the outdoor areas where the wolves would be introduced, or where they would eventually spread to. On analyzing the benefits, there is the overall benefit to the ecosystem that the reintroduction of this predator would regulate overgrazing that is taking place in some areas of the Rockies and along some waterways. There is the financial benefit of wolves actually attracting tourists, if they are able to witness and see this endangered species in various areas in a safe manner. It would bring back an indigenous species to the state that had been previously wiped out by human actions. If the population became large enough, there would also be the financial benefit of hunting licenses in the future.

As someone who is regularly in the mountains on hikes with my black lab, and lives on a ranch with livestock, I ultimately chose to vote against the proposition as the social marginal benefits didn't outweigh the costs in my mind. Nonetheless, it was a majority rule vote, and the proposition ultimately passed, but very narrowly (it won by about 56,000 and was the closest decision on the 2020 ballot) and is currently in progress today.

Gamestop Market Revolt and the Rationale of Voting

 In early 2021, retail investors embarked on a mission to save a stock called Gamestop ($GME). Hedge funds were taken by surprise and after a week of various “market attacks”, they lost an estimated $12.5 Billion to retail investors who were tired of financial cronyism. Read this article for a more full explanation. 

    Participating in a market is akin to a continuous election. I used our idea of a rational voting utility formula to analyze this event. Our expression for participation and rationality is thus: 

p[B] - C + D > 0

The cost of participating was purchasing the stock GME (or any memstock). Around $200-300 depending on buy-in time. Moreover, D (intangible fervor) was significantly high for many people, who saw an opportunity to strike back at institutions that had wronged them. Many posters “delivered” dramatic speeches, about getting revenge from their parents suffering during the ‘08 crash caused by the same crony establishment.  The probability of benefit was also most interesting. It was a gamble on whether the stock would end up higher or lower than originally purchased. Yet, the probability was significantly higher than a normal election where you’d either win or lose. You could either gain big but even if you lost, you could still have partial recuperation. The potential benefit was also high. There were believable claims of a gamma squeeze occurring amid the 141.8% float of the stock. This would’ve meant possible financial benefits over $5,000.

Therefore, it was rational for people to have participated in the 2021 GME Stock Revolt if expected benefits and intangible satisfaction at striking crony institutions were not offset by the costs of participating. Sample equation: .75[$375] - $200 + $500 > 0. Therefore, like gambling or voting it was rational for many to participate in the GME and AMC markets. 

(Warning some of the comment sections of the links contain foul language)

Spacial Location Theory of Tampa's Designer Stores

As someone who loves to spend my paycheck shopping for clothing, I frequent the Tampa International Mall quite often when I am home for the summer or on breaks. I love Nordstrom, Lululemon, and mainly boutique stores, which happen to be on all different sides of the mall. As I walk from one end to the other, I have noticed how close together the designer or higher-end stores are in comparison to your "lower or average-priced" stores. In fact, Gucci, Louis Vuitton, Tiffany's, David Yurman, Michael Kors, Coach, Saint Laurent, Swarovski, Golden Goose, and Tesla are all located on the second level near the food court right next to one another, just within a few steps. 

This is a perfect example of Spacial Location Theory. Spacial Location theory is the idea that if there are two firms with identical output, uniform distribution, and spatial mobility, they will eventually come to locate next to one another in the middle of a specified distance to steal customers from each other and limit the distance the average shopper has to walk in order to shop in their store. If you think of International Mall as its own community, there is in fact an optimal place for these types of stores to set up as they try to poach other shoppers interested in designer items -- the exact center of the mall right next to one another. And they did just that. These designer stores have close to similar outputs (high-end clothing, shoes, and jewelry) and are drawing a similar demographic of people who want to exemplify they have money to spend on their appearance. Setting up shop right next to one another shows that these designer companies understand the need to "race to the center". Instead of being scattered around the mall, they can all converge to the median and maximize their profits, and individuals chose these stores to maximize their utility. 

How much would you pay to change the stock market?

Through the first 623 days of their respective presidencies, the stock market has looked quite different for Donald Trump and Joe Biden. Under the Trump Administration, the S&P 500 (the most common index used when determining the market’s health) was up 28.18% on his 623rd day (which is better than the average 623 day period; the average 623 day period is about (about) 16%). Under the Biden Administration, the market was down, -0.21%. Factoring inflation, this real loss is much greater, but nominally, the difference between the two is 28.39%. Now, think about this in terms of how much you would be willing to pay to change the outcome of the Presidential election. Of course, who the president is doesn’t directly affect how the stock market goes up and down, but let’s assume you have a stock market obsession; you put $10,000 into the S&P 500 each year, track it constantly, and you think who the President is has a strong, strong correlation to how the indices perform. 

To determine how much an investor would be willing to pay, we have the equations MB > MC, MB = |V2 - V1|, B = MB, E(MB) = pB (E(MB) = Expected Marginal Benefit), and pB - C > 0. From ECON 2010, if MB > MC, the action should be done. So, the Marginal Benefit equals the amount you would pay for each candidate to win. For Trump to have won, the investor would pay $2,818, or the amount his portfolio would be greater (he believes) if Trump had won. For Biden to have lost, he would have paid $21, or the amount his portfolio is down. So, we plug these numbers in for V1 and V2, and get our MB. The MB is $2,839. We know from the reading that p’s value is 1 in 10,000,000; there is a 1 in ten million chance that your vote is the deciding vote. Therefore, pB = $2,839 * 1/10,000,00, or 0.0002839; less than 1 cent. The cost, C, we will assume is $17, or the median hourly wage in 2020. Plugging into our equation, we have $0.0002839 - $17 > 0, which is false. Therefore, voting is irrational even if you put $10,000 into the stock market in 2020. But, the paradox of voting states that there is a positive third variable, we’ll call it “u”, that stands for utility gained from voting, or civic duty. Plugging that in, the equation will look like pB - C + u > 0, meaning that u has to be at least $16.9997. This is important; the way I think about it is, would this investor be willing to pay $17 to put a Donald Trump sign in his front yard? If yes, then voting is rational for him. If not, then it isn’t and the voter is stuck with his portfolio’s losses. 

Irrational Baseball Fans?

A couple weeks ago I read a little a piece in this newsletter that concerned Aaron Judge's home runs. The prices of Yankees seats were going up tremendously, partly because of the chance of catching the record breaking ball that could sell for between $500,000 and $5 million. However, if someone was going to the game just for the chance of catching the ball, it would be an irrational decision. 

The probability of choosing the right seat at the right game and then actually catching the ball is so low that the expected value from just the monetary costs and benefit is non existent. People might have overestimated their chance of catching the game ball (similar to how people might overestimate their ability to affect an election) and bought a ticket based on this. But, I think the real reason that people bought these Yankee tickets was because of the utility of going to the game and the expected utility of even seeing the record breaking homer exceed the cost of the ticket. So in the expression pB - C + D, D essentially outweighs C, as pB is tiny.

Altruism and the Free Rider Problem

    Last week a category 4 hurricane hit my hometown of Cape Coral. It was one of the worst hurricanes to hit the US in decades, definitely the worst to hit my area. Like I said in class my social media has been dominated by images of flooding, boats in people’s backyards, and now pictures of people’s favorite Memories at a lot of places that are no Longer there. Times like this are pretty nerve racking, all my out-of-state friends have been itching to go back home to see what’s left and to help our families who stayed behind. My family is all ok, limited cold water is back and they expect power to return by the 9th of October. It is hard to get food and water before a hurricane because people buy out the shelves in worry. After the hurricane there is a shortage of potable drinking water and food. I have seen a lot of scary and upsetting images but I have also seen a crazy amount of care and compassion. So many people I know have been working for free around the community to help rebuild, have raised money to buy supplies to give out, or are using their boats to shuttle people on and off the islands which no longer have road access to the mainland. 

    The wellbeing of people in the Cape Coral/Fort Myers area is a public good. You cannot exclude people from improving their wellbeing (and I am sure there are some legal routes of harming their wellbeing) and my benefitting from their well being doesn’t take away from my friends benefit. It should then suffer from the free rider problem and people should be hesitant to contribute to the costs of their wellbeing because there is a communal benefit. In our Gruber textbooks, altruism is one solution to the free rider problem. In a totally rationally self-interested world we make decisions based on the costs and benefits to ourselves. But sometimes, and I would push to argue a lot of times, we do care about the outcomes of others. That’s why even when it doesn’t make sense to contribute personal funds there are Restaurants offering free food for as long as they can make it. And I’m sure the economists will say that there are still remnants of the free rider problem, that there is still an under provision of aid, but today I am choosing to focus of the positive. 

The Voting Paradox of the Funk Parents

     “So what even is Public Choice?.” Earlier this morning I was sharing my class schedule with my mom, and she was very perplexed by the idea of this class. At first, when I tried to describe it, she thought like most people, that it was a class discussing economic policies in the political realm. In an attempt to make it more clear to her, I shared some of our topics from class, and we got into an interesting discussion about voting and rational abstention. She explained to me a very interesting example of the voting paradox we discussed in class that has been occurring within our own family.

    You see, historically, my mom has voted republican in most elections, while my dad has voted democrat in those same elections. Both of them vote in the same district of the same state - congressional district 5 of Tennessee. She explained that they are both very aware that when they go, often together, to the polls for an election, their votes cancel each other out. They know their votes aren’t decisive because they know for a fact it was matched by someone else of the opposing party. They see the irony of this and even make jokes about it, so why in the world do they keep voting? According to our readings, they are completely irrational! I asked them about their motivation and they both agreed that out of a spirit of patriotism and an appreciation for our respect to vote, we must go to the polls even if we know our vote won’t make a difference. For both of them, the utility from acting on their sense of civic duty fully outweighs the costs of voting. This does not surprise me at all coming from my mom. I know she receives large utility from doing patriotic things and her cost of voting is relatively low now that she only has one kid at home and works part time. What surprised me was to hear this from my dad. He has to take time away from his work, making the cost of voting relatively high, and isn’t the most patriotic guy compared to most people I know. Regardless, they both must receive a lot more utility than I realized from fulfilling this civic duty because they continue to go year after year to vote despite the high costs and knowing it doesn’t make any difference. 

How to Fake A Simple Majority: Russian Edition

Annexation is a tricky subject in global politics. Annexation defined by international law is as follows: when one country forcibly asserts control and sovereignty over another countries territory. Typically this follows military occupation and is unilateral, meaning that the control is announced by the occupying power; the other party has no say. On September 30 Russia announced the annexation of four Ukrainian Territories, amounting to 17% of Ukraine, land roughly the same size as Portugal. Vladimir Putin didn't use the term annex but rather that the Ukrainian territories have acceded to Russian control. This comes after the results of "sham" referendums held in each of the four territories. In order for these referendums to pass in the regions of Kherson, Zaporizhia, Donetsk, and Luhansk only a simple majority is required. The results yielded that at least 87% of voters in each province and an outrageous 99% in Donetsk voted for the land they lived in to formally become a part of Russia. 

These referendums, to no ones surprise, simply contained no pretense of legitimacy. The yes or no votes to become apart of Russia had been conducted at gunpoint. The results, intended to reflect the preferences of a majority of voters living in these four regions on the item of becoming Russian citizens, fail to do so accurately. The median voter theorem states that if voters are fully informed, their preferred outcomes can be arranged along one dimension, if each voter has a single most-preferred outcome, and if decisions are made by simple majority rule, then the median voter will be decisive. These assumptions are met and this  shows just how desperate Russia is. Not only does the coercion at gunpoint block the true preferences of the Ukrainian citizens but reveals that Russia acknowledged the real simple majority would not result in their favor. The Kremlin and the puppet leaders installed in the regions realized the decisive median voter would not vote in their direction, forcing them to strongly coerce the voting citizens. 

It's hard to fake a simple majority vote when the whole world knows the true preferences of the citizens you are trying to coerce. Russia tried to fool the world last week, the same way they did in 2014 with Crimea, once again the world wasn't fooled. 

Set Lists and Voting Systems

 As the Music Director of the Virginia Gentlemen, I am tasked with producing the setlist for the semester. When elected, I decided to take a democratic approach for song selection. Each member got to add 2 songs to the playlist, of which we voted on in order to determine the setlist. I was hoping to get at least 4 songs picked by this method. However, I did not specify how I would be counting votes, allowing for flexibility on my end. 

The members, or rather voters in this poll were told to rank their top 5 songs. My original plan was to assign points to each song based on these preferences, 5 being the highest ranking song for an individual, and 1 being the lowest, a system which I now know is referred to as the Borda Count (in this case with multiple winners). Punching all of this into an excel sheet, there were four clear songs to be chosen based on the high amount of points received. However, I did not like one of the songs that was voted through. So, using the flexibility of not revealing how votes were to be tallied, I switched the voting system to a multiple-member plurality. This way, the four songs that received the most votes were voted through. I was much happier with this setlist, and given the small number of voters in this system, I think a plurality was the correct method to use. Due to the small population size of the Virginia Gentlemen, the distribution of music preferences tends to stray from normality. By using a plurality system in determining the setlist, I appealed to the largest amount of the population. It was interesting to see how employing a different voting system resulted in a substantially different outcome. It is interesting to think that for large scale elections, the method used really has an impact on the overall result, just as it did in the small population of an acapella group. 

The Somewhat-Less-Irrational Irrational Voter

Notice: The candidate referenced is running in the 2022 Arlington, Virginia election. The sample is slightly biased, it is a convenience sample. We also cannot rely on the moms (or any human) to fully know the details of their utility functions. 

Scene: Act 1, scene 6. Setting: My living room. Appetizer hour. Book club. Cast: Juliette, 5 NoVA moms. 

** Screen flashes: "Based On Real Events" 

NoVA Mom 1: Juliette! You're of age! Are you voting in the upcoming election?

Juliette: No, I am a rational voter --or, I guess, a rational non-voter! I know my vote isn't decisive, and for me, the marginal cost of voting exceeds the marginal benefit, so I don't vote. 

NoVA Mom 2: *scowls* It is your civic duty! We have the right to vote, so we should vote!

Juliette: You have the right to own a gun, NoVA Mom 2, so do you? 

NoVA Mom 2: *silence* 

NoVA Mom 4: I like to vote.

Juliette: Obviously then, for you the marginal benefit exceeds the marginal cost. If I may ask, what do you enjoy about voting? 

NoVA Mom 4: I like to show what I like. 

Juliette: *perks up* Really?! If you don't mind my asking, what do you want to express? 

NoVA Mom 4: The representation I want. I look for the Ds, and even then, I only vote for them if the candidate is a woman or a minority. Even though Don Beyer is a Dem, he's a white man, so he doesn't get my vote. Nobody does in that race. So much for my education making me an educated voter, this is kind of irrational of me *laughs* 

Juliette: You're not irrational! You're rationally ignorant! You don't have the time to learn about the candidates and follow the events, because you work a full time job. You use expressive voting because you know your vote doesn't instrumentally matter. You derive utility from expressing your preferences, not from influencing the election. 

NoVA Mom 3 (mine): Wow Juliette, you sure are learning a lot in that public choice course! Speak English please! 

Ranked Choice Voting in NYC: The Good, The Bad, and The Ugly

    In class, we've discussed several different voting procedures. Mueller 7.1 defines several different types including majority rule, plurality rule, ranked-choice voting, and the coombs system. In real life, we see all of these different systems used to decide the winners of elections. What we can say for sure is that it is very difficult to decide a winner, and the rules of the election affect the outcome. One type of voting process that is becoming more and more popular is ranked-choice voting (RCV). With RCV, voters go into the booth and rank the candidates. In round one, if a candidate earns a majority of first-place votes, they are declared the winner. If not, then the candidate with the fewest first-place votes is eliminated and their votes are then distributed based on those voters' second-choice candidate. This process is repeated until a candidate has a majority. 

    This voting process has become more and more popular in the US. For instance, in 2021, New York City used RCV for the first time in its elections. New Yorkers were able to rank their top five choices on their ballots for each position. This election was especially important for the mayoral primary which was won by less than one percentage point. In NYC, this voting method has both positive and negative attributes depending on who you talk to. An analysis of RCV in NYC shows that this voting method led to fewer "inactive" or "wasted" ballots (in other words, a ballot that did not rank one of the two candidates left after all elimination rounds). This means that with RCV, more citizens' ranked votes played a role in deciding the final outcome of the election - 15% of ballots were inactive with RCV during the mayoral primary in 2021 as compared to 33% during the 2013 mayoral primary. In many ways, this is a positive attribute of RCV. There were many people in New York, however, who were concerned about the system disenfranchising voters who may not have time to learn the process, such as low-income voters. In fact, there were many members of the City Council's Black, Latino, and Asian Caucus who opposed RCV, calling it sophisticated voter suppression. They even sued to delay the use of RCV, though this was unsuccessful. Overall, RCV may be a good thing as it results in a Condorcet winner a greater amount of times than other voting methods like majority rule. However, when it comes to its actual implementation, issues like voter education and voter suppression may cause many citizens to oppose the system. 

Rational Ignorance in Education

 This past Friday, I was able to talk on the phone with a good friend of mine who is in his first year of medical school. As he was telling me about how it was going, he explained that this first chunk of classes he is taking is all introductory and is all pass/fail. As such, when he's been studying, he's had to take mind of how to spend his time so that he can do well enough to pass the classes without spending way too much time on school and getting a better grade than he needs. Essentially, he is having to calculate his marginal benefit and marginal cost curves for studying, and these curves look different than they typically would for him in a school setting because all he needs to do is pass these classes. 

Rational ignorance in the case of school, especially med school, where students are seeking to learn to equip themselves for a profession in which lives are at stake, seems to be an important area to examine. If future doctors are in positions, at least early in their schooling, where they don't need to learn the material really well, but instead just need to learn it well enough to pass. For this to be the case, it seems important that a passing grade would ensure students know the material which is important to know really well. I am confident my friend will be a great doctor one day, but if there are other students who are just skimming by (to the extent that you can skim by in a med school setting), it seems important that these students would still be equipped well enough by their schooling to be good doctors. I would imagine most people would prefer their doctors to be people who really learned the important information well, rather than just well enough to pass. As such, it seems important to incentivize learning in a way where the rational ignorance of these students is as low as possible (while also not making it so difficult that the supply for doctors cannot be met). On the other hand, as this article explains, time spent studying can take away time spent learning to be with patients later in med school, meaning students may have to allow for more rational ignorance in one part of their studies to be better suited for another part of their future career. It's a complicated issue, but one worth thinking through well.

Extremists and Abstention: The 2016 Election

 With all of our discussion about which candidate voters choose or why they do not cast a ballot at all, it seems fitting that we discuss the 2016 election of Hillary Clinton vs. Donald Trump. It seemed to me, and to many Americans, that this election was an extremely divisive one. With voter preferences on their extremes on each side, I would categorize the voter preference distribution for this election as bimodally distributed. The Democratic and Republican party showed no sign of wanting to associate with each other, and voter preferences were very opposed and stubborn on either side. Many of the moderates in the election decided to abstain from this election also. The extremists on either side were unwilling to vote for either and there seemed to be a slew of uncertainty of information. In fact, as Downs suggested, this refusal to converge seems to be a spark for the “revolution” on January 6th (but that would take a whole new post to get into).

    Another important part of this election as it relates to class is the rational abstention that took place in the 2016 election. In this election, 25% of people that did not vote cited “dislike of candidates”; this percent grew by about 200% from the 2012 presidential election. Downs insinuated that where elections can start to break down is when people start voting for candidates based on personality instead of issues, but I wonder what he would say about abstaining based on the personality of candidates. I would normally say that when voters abstain, it is detrimental to the democratic process because the preferences of these voters are not known. However, in a case where each candidate seems to be at an extreme, I question whether abstention is actually a more powerful way to demonstrate their preferences. It would show that there is space for a new, moderate party to be created that would either garner a large number of the moderate voters or influence one of the parties to start to converge. 

Rational Ignorance and Healthcare

    When we were discussing the idea of rational ignorance in class, I immediately thought about healthcare. As I'm sure everyone knows, healthcare is extremely complex and difficult to understand for most. There have been recent initiatives that you can read about here from NPR to increase price transparency, but as the researcher from the article says, "there is data out there, it's just not accessible to mere mortals." Finding the data and genuinely understanding it is something most of the American population is not able to do. Personally, I am lucky to be on my parents' insurance until I turn 26 -- for this reason, you could definitely call me ignorant when it comes to healthcare. All I know is I need to bring my insurance card and money for the copay when I have a doctors appointment. In economic terms, my optimal amount of knowledge is very little, and my optimal amount of ignorance is very high. This is because, since understanding the healthcare industry would take so long, and it is not really necessary at this stage in my life, the marginal benefit of trying to learn about healthcare, prices, etc. is less than the marginal cost, and the opportunity cost is very high as well, because I could be using my time more efficiently doing other things such as studying for classes. 

    In a few years, however, I will be off my parents' health insurance, and I will be on my own in understanding more about the healthcare industry. So despite the fact that my optimal amount of knowledge is so low right now, it will get a lot higher a little bit too soon. For people who do not have health insurance, similarly, it is rational to have more knowledge than ignorance on this topic in cases where they need to go to the doctor or have a special operation. While there are many initiatives to make the healthcare industry more transparent and understandable to the mere mortal, this will be an extremely long and drawn out process. When thinking about rational ignorance in the healthcare industry, it is clear that the level of rational ignorance varies for individuals at different times of their lives. Many of us are lucky enough right now to have a low optimal amount of knowledge, but before we know it this will no longer be the case.

Information Problems, Rational Ignorance, and Online Privacy Warnings:

    Most of us use the internet every day, usually from a single browser, and we have all come across privacy warnings on the various websites we visit. The US has less stringent requirements than some other countries, so we get fewer legally required pop-ups, but we are all at least vaguely familiar with the concept of “cookies” and warnings like this:

We value your privacy

We use cookies to enhance your browsing experience, serve personalized ads or content, and analyze our traffic. By clicking "Accept All", you consent to our use of cookies. Read More

This message is most often accompanied by three options: Accept All Cookies, Reject All Cookies, and Customize. As far as I understand it, some cookies are used to improve the functionality of the website and others are used for marketing and analytics. The site will save your login information so that you don’t have to type it out every time, or it will save your progress on some aspect of the site. Very useful. We want these. At the same time, some cookies contain personal information that can be used in a more manipulative way. For example, Google will track your spending habits across websites in order to serve you ads that you are more likely to engage with, potentially manipulating you into spending money you would otherwise have saved. (I don’t actually know if Google uses cookies or some other user-tracking mechanism, but the result is the same). 

The fact that some cookies might benefit the user and some might work against them makes the Customize Cookies option appear enticing, but it poses an interesting informational problem for those utility maximizers among us. Basically, it would take a large amount of time and effort to parse out which cookies are beneficial to the user and which are not for every website, not to mention the time spent physically customizing the cookie options on each of those websites. For many, it is rational to forgo learning about cookies and how they are used in favor of one of the more extreme, but less involved, options of Accept or Reject, even if it results in a sub-optimal “consumption” of cookies. Just like voters who have a low marginal utility of learning a lot about the candidates they vote for, internet users have a low marginal utility of making an informed decision about which cookie option to select, especially since the costs of poor cookie allocation are so abstract and difficult to identify.

All of this shows that the laws around internet cookie disclosure do a poor job of taking into account people’s incentives. The idea behind requiring cookie notifications is to give consumers more control over the information they give away to the websites they visit. While it’s better than nothing, the default for most browsers is still to accept all cookies. So, a user who rationally chooses not to engage with the privacy warnings will end up with a poor allocation of cookies more often than not. In this case, a libertarian-paternalist approach might be more appropriate. That is to say, if the default cookie allocation were set by law to only accept cookies that improve web functionality but reject other kinds while still giving consumers the option to customize their cookies, we could better approach an equilibrium cookie allocation without increasing the informational costs of cookie selection.

Proportional Representation & Hitler's Rise to Power

In terms of intended outcomes, the Weimar Republic was a very democratic society before its collapse at the hands of Hitler in 1933-34. Women and the working class were given the right to vote in the proportional representation system, a level of new enfranchisement that transformed the voter distribution of Germany's electorate. A multiparty system emerged with parties like the Social Democratic Party, the German People's Party, the National German People's Party, the Centre Party, the Communist Party, and many many more. According to Anthony Downs, a massive change in the voter distribution means that "existent parties will probably be unable to adjust rapidly because they are not ideologically mobile". In the case of Weimar Germany, this inflexibility led to the rise of new opportunistic parties, like the National Socialist Party.

Under proportional representation, it is much easier for a society to elect extremist voices, like Hitler. Because no one is required to achieve a majority, PR can be more representative in both a good and bad way. In 1928, the Nazi party was not represented in the Reichstag. But in 1930, the Nazi Party became the 2nd strongest party in the Reichstag with only 18.3% of the popular vote. By 1933, the Nazis were the most powerful party with 33% of the vote. Hitler achieved this popularity with a new vision for Germany that won over the growing middle class as well as vital supporters in Germany's ruling class. The PR system in the Weimar Republic was highly unstable as parties had to constantly form coalitions, adjust to the entry of new parties, and formulate unstable policy. In this type of instability, Anthony Downs argues that, "a clique of underdogs seizes power" and a "reign of terror" occurs in which "new governors want to eliminate their predecessors". Through political revolution exemplified in the rewriting of the constitution, Hitler eventually achieved general popularity in his construction of a German "National Community" and executed his own reign of terror apparent in the burning of the Reichstag and on the Night of Long Knives.

We often assume that more democracy and more representation (offered by a system like PR) is better for society. However, we must also address the fact that more representation means the validating of voices on the extremes and the facilitation of their rise to power.

Rethinking the Decisive Voter

    This week, I’d like to dedicate a few paragraphs to rethinking the idea of the single decisive voter, and the implications of there being many decisive voters on the cost-benefit analysis of voting. In public choice, we understand that, in an election that is not decided by a tie-breaker, the decisive voter is the winning party’s (n+1) voter to the losing party’s collection of n voters. The median voter theorem teaches us that this (n+1)th voter is the median voter, the central position that politicians rush towards in order to collect the majority of voters before election day. Now, consider a scenario in which candidate L has secured the vote of all voters to the left of M (the median voter), and candidate R has secured the vote of all voters to the right of M. In this tie-breaker voting scenario, if R secures the vote of M, he wins. What happens if one voter (call him a) who had previously decided to vote for R, decides to abstain from the election? The position of M shifts left by a hair, candidate L secures the vote of M, and L wins the elections.

    So it seems that voter a held a decisive power in the election after all – and, as a matter of fact, so did every other one of R’s voters, (n + M). Ultimately, n of R’s voters were crucial for negating the preferential power of L’s n voters and shifting M to the middle. I believe this broadening of the decisive voter applies even in non tie-breaking situations: in an election where L has n voters and R has n + 1 + ε voters (ε being the number of voters away from a tie-breaking election there were), then R’s n+1 voters were all decisive, and only L’s n voters and R’s ε voters were not decisive. Should one of R’s n +1 voters abstain, one of their voters would shift from the ε category to the n +1 category. All n +1 R voters were crucial for shifting the preferences of the electorate far enough away from L that R could retain the vote of M. In this scenario, the chances of your vote being decisive increase enormously: in an election with 100 voters where R wins with 60% of the vote, the probability of your vote being decisive goes from 0.01 to 0.41, and their marginal benefit of voting is 41 times higher.

    One final note on decisive voting: in a presidential election, which is played out on the stage of the electoral college rather than the broader electorate, many more voters have a chance of being decisive. In this scenario (n + 1) electors of the winning party are decisive electors: meaning that (n+1) of the winning party’s voters in each of those decisive states can be considered decisive. The chance of being decisive in a presidential election with the electoral college now hinges on you living in a decisive state, but the chances of being decisive in those states is now significantly increased.

Ranked Choice Voting in the Oscars: Awarding Mediocrity?

 The Academy of Motion Picture Arts and Sciences (AMPAS) uses ranked-choice voting to decide which nominee will win the Oscar for Best Picture. First of all, ranked-choice voting is not, as Variety claimed in 2020, “exactly” the Oscars equivalent of the Electoral College. But, unlike Variety, many of the critics of this system might actually have a point. Most, like opinion writers in Vox and Business Insider, argue that ranked-choice voting leads to boring, run-of-the-mill movies winning. They lament the fact that more daring movies that would perhaps win a plurality struggle to get ahead in a ranked-choice system. Instead, a Condorcet-winning movie that is tame but would beat the bolder movies in a head-to-head is more likely to win a ranked-choice system. This makes sense because more “moderate” or “middle-of-the-road” candidates tend to win political ranked-choice elections. Indeed, this is what is seen in the majority of recent Oscars Best Picture winners – movies like The King’s Speech, The Artist, Argo, Birdman, and Green Book are all considered broadly liked, but not particularly daring. 

However, as we discussed in class, there is no voting system that guarantees a Condorcet winner will always triumph. In the 1991 Louisiana gubernatorial election, although Roemer was the Condorcet winner, Edwards had enough support to beat him. This likely explains the recent wins of movies like Spotlight, Moonlight and Parasite that were untraditional and beat out more mild movies (e.g., Moonlight beat La La Land). When these movies have enough fervent support they can beat out movies like La La Land that might be a lot of people’s second choice (as Roemer was in 1991 in Louisiana). All this is to say, I think critics of the Oscars have an interesting point, but they can be more careful in decrying ranked-choice voting. While the system does often reward safe movies, I don’t think it’s fair to say that it’s rigged against gutsy movies.