"Tolerating" Liars, Cheaters, & Stealers

At the time of its original founding in 1842, the University of Virginia's Honor System included a Non-Toleration Clause that required UVA students to report any Offenses they witnessed, with the reasoning that "to ignore these Acts committed by another student is to make one an accomplice and equally guilty of a violation of Honor". With the removal of this Clause in 1979, and the recent transition in 2023 to a multi-sanction system, the Honor Committee is often criticized for being excessively lenient towards guilty students, especially when compared to non-toleration, single-sanction systems at schools such as the Virginia Military Institute.

The Community of Trust (COT) can be characterized as a public good shared by all of UVA's community members; no individual is excluded from the benefits of acting with integrity and trusting one another, and one person's ability to act with integrity does not affect another person's ability to do so as well. Applying the non-toleration clause towards student integrity, a faculty member or student's decision not to report a witnessed Offense can be characterized as a free-rider problem; by electing to avoid the costs of reporting an Offense, the COT is deeply eroded. This problem is only worsened by a large n value (the COT has tens of thousands of members) and the existence of reduced social pressure towards acting with integrity among some students.

Why did the University of Virginia Honor Committee elect to remove the clause then? Even when the Committee passed this clause, the decision of collective action was truly made among the broader COT. In the context of this Clause, external costs are the costs one endures from unreported Offenses, and decision-making costs would be the effort required for everyone to agree with the Non-Toleration Clause by actively Reporting witnessed Offenses. While mandatory reporting did strive to reduce the external costs, decision-making costs increased substantially, considering all the time and effort of getting people to agree by acting in accordance with the Clause, as well as subsequent enforcement costs of investigating and adjudicating instances of students choosing not to Report a witnessed Offense. This would render the Honor System's institutional costs of enforcement extremely high, and considering that the removal of the Non-Toleration Clause did not affect the number of Reported Offenses in the long term, the tradeoff of external costs seems to have been outweighed by the high decision-making costs. Thus, with such a large portion of the COT expressing reluctance towards the Non-Toleration Clause, the Committee reformed the System, but continues to consider the additional costs we all endure by not mandating Reporting.

MVT and the Political Horseshoe

The polarized American political scene appears to refute the median voter theorem. Joe Rogan once described American politics as a TV show, mocking the radical parties that dominate American legislature. Joe Rogan is irrelevant to this discussion; however, his comment is hilariously true of bipolar American politics. Despite the radical political scene in America, both left-wing and right wing extremists seem to meet in the middle over certain issues in a phenomenon known as the political horseshoe. My question is: can the Median Voter Theorem (MVT) explain the junction of the left and right wing parties?

The MVT requires a one dimensional policy space. Lets assume that the only relevant issue in a political election is the candidates' stance on anti-trust laws, and that all voters exist on a spectrum of weak to strong support for anti-trust laws. Voters are normally distributed, and the median voter distrusts monopolies and would subsequently support legislation to minimize their market power. This is a realistic assumption given YouGov polling data. In this election, there is a far left and a far right wing candidate, and a simple majority vote will determine the election. Since both candidates are vote maximizing, the MVT predicts that far left and the far right politicians will converge on the median voter who supports antitrust laws. In practice we do see strong bipartisan support for antitrust laws. For example, the Sherman Antitrust Act of 1890 received one vote against in the senate passed in the unanimously in the house. 

Its important to note the limitations of this application. The biggest limitation is that political stance on antitrust laws is not the only determinate factor in elections. There are many more issues, and several of them violate the one-dimensionality rule, like immigration. In this case, it may merely be a coincidence that the MVT predicts the convergence of two political parties. Bipartisan support over antitrust legislature may result from aligned party values rather than a fight over the median voter. Regardless, it is still an interesting and important analysis because economic policy has massive implications.

You Can Sell a Whole Neighborhood???

I don't get shocked by a whole lot while I'm catching up on the news, but I did get pretty caught off guard by this proposal: one real estate developer and former HOA president of a neighborhood in Loudoun County, Mital Gandhi, has proposed that himself and his 142 other neighbors should sell their entire neighborhood for data center development. He was a staunch opponent of data center development in Ashburn that has since decided that since data centers have already surrounded their neighborhood and disturb the quietude, residents might as well find a way to benefit. In the proposal, each resident would receive roughly $4.4 million for selling their home to data center developers, which is about double the value of their home. The catch is that this must be a unanimous decision. Getting 143 families to agree to selling their homes, as it turns out, is a tough ask. 

This deal has not gone through yet because of how many holdouts there are. Some families have children that are in school and want to delay the project, and others are emotionally attached to Ashburn, VA. Regardless, because of their emotional attachment to their home, the external cost curve is high. However, the larger problem has been the costs of consensus. Coordination to secure agreement between all 143 families is high. Many holdouts are trying to negotiate a higher piece of the cut for themselves, which adds to the collective cost curve. I would argue that n* in this scenario despite all of the debates is right where it should be for a decision of this magnitude. This has the potential to uproot families at inopportune times and impose very costly externalities on some should it go through without consensus. Unanimity in cases like this ensures Pareto optimality. In the meantime, all residents will continue to hear the pervasive hum of the data centers that currently surround their community.