Winners take all

 I was intrigued by Stigler's idea on regulation, that "regulation is acquired by industry and is designed and operated primarily for its benefits." After listening to the presentation on Thursday on the Jones Act, I decided to research more into real-life examples of this theory.

Telecommunications Act of 1996 overhauled telecommunications laws to foster competition and reduce regulations, especially in the rapidly evolving communications and media industries. While the Act’s primary goal was to encourage competition within various communication sectors by removing barriers for entry by allowing different types of service providers to enter each other’s markets. However, in practice, it allowed large companies to consolidate thus inhibiting competitions.

Before the Act, there were strict limits on how many television and radio stations a single company could own. The Act lifted many of these restrictions, allowing companies to own more stations within the same market and across the nation. Apparently, large firms benefit significantly from economies of scale, where the cost of service decreases as the company grows. The Act’s deregulation made it easier for big companies to merge and gain these efficiencies, thus discouraging competition. Therefore, though initially intended to encourage competition, this government regulation has worked in the favor of the few, large firms, operated in their beneifts.

Democracy in Action: A Sickos Borda Count

As a big fan of voting (early and often), I was fascinated by the alternative voting rules we learned about earlier this month. The one that stood out to me most was the Borda method, ranking candidates and assigning descending point totals for each (with k candidates, choice 1 gets k, choice k gets 1). This is the preferred method for economists, sports writers, and, most importantly, the Sickos Committee, a group of self-described depraved college football fans with a penchant for the wild and wacky moments in college football. 

Each month, the Committee asks its followers to vote on the most Sicko team in college football, using the Borda method to rank its points similarly to the AP Poll and other collegiate ranking systems. The system has shown success in choosing the most Sicko team every year. Last year, Iowa took the prize for having one of the best defenses and worst offenses in college football -- at one point, their defense had more points than their offense, which is truly Sicko. This year's front-runner is Florida State, who started the year ranked near the top 10 before falling to 1-7 to start the season. And fans aren't limited to just college football teams -- the Chicago White Sox finished 18th last month due to the sheer Sicko nature of their season. All of this is to say that the Borda method reveals the Sicko preferences of college fans very well. If you want to participate in this poll and reveal your preferences to the Sickos Committee, you can vote here. Polls close Tuesday 11/5 at 9pm. 

RCV>Approval: A Sorority Girl's Op Ed

     Within my sorority Pi Beta Phi, I serve as one of 6 members on our Leadership and Nominating Committee (LNC). LNC’s role is to interview and slate members we believe should be on the executive team for the next year-long term. We submit our picks to the current executive branch, and they approve or deny our picks. The general population within the sorority currently has no say in who gets elected since the LNC is picked by Nationals. 

    I wonder though, how did Pi Phi decide on this voting method? When analyzing how I came to be on LNC today during the 4 hours of interviews I endured, I thought a lot about public choice and our current voting method/whether or not I think it is effective. What I realized was that, I do not think the way we vote is effective in producing Condorcet winners. 

    Connecting this to class briefly, I noticed that LNC elects their picks through the approval voting method - touched on in Mueller as an alternative to simple majority. Essentially, this just seems like a popularity contest. We pick everyone we like for that position, and the person we like the most (gets the most “approval” votes) wins. 

Now, thinking about this, I don’t love the way this sounds, and it didn’t seem like it would produce many Condorcet winners for each position as it would be statistically a low probability that the entirety of the chapter’s values align with the 6 members on LNC for every pick we make. For this reason, it seems to me the way we vote ought to change. An alternative I think would be effective in creating more Condorcet winners would be ranked choice voting, and opening it up to the entire sorority. Ranked choice voting has many pros, including the fact that it decreases the cost of voting by eliminating the need to return to the polls (the Pi Beta Phi chapter room) multiple times. It also allows for there to be multiple candidates for each position. Additionally, in a group of 160, the benefits of voting are drastically increased since your vote actually matters - making it rational to vote and likely meaning there would be high voter turnout - demonstrating its potential as a solid alternative to the approval voting method we now use through the LNC.

A What Kind of Prisoner's Dilemma???

As I was scrolling through the Financial Times (as one does), one article caught my eye: "Google and peers weigh an AI Prisoner's Dilemma". At this point in the semester, seeing the words "Prisoner" and "Dilemma" in any form together warrants my attention, and this article did not disappoint. The author argued that companies like Meta and Google are experiencing a prisoner's dilemma, because although the companies would be better off working together to develop AI, they still choose to compete separately. With trillions of dollars in potential value to be gained from AI, these companies want it all to themselves and thus compete and research AI separately.

While there certainly is a prisoner's dilemma regarding AI development, I think the article is missing another prisoner's dilemma that may occur in a few years. Although there certainly is real value to be had if firms work together to develop a strong functioning AI model, I believe another prisoner's dilemma may occur with pricing. If firms can collaborate on prices, they can charge much higher than with competition. With trillions predicted in a competitive market, the amount of money firms can make together would be astronomical. It remains to be seen if firms will go down this route, but if AI companies can band together, their profits will go through the roof.

Mcdonald's Ice Cream and the DMCA

McDonald's ice cream machines are infamous for being out-of-order. This is thanks to the Digital Millennium Copyright Act (DMCA) which prevents anyone except the original manufacturer from servicing it. However, ice cream lovers can rejoice since the US Copyright Office recently issued a new ruling that amends the DMCA and creates an exception for “retail-level commercial food preparation equipment." Theoretically, this means McDonald's will now be able to service these machines themselves and reduce the average down times. 

The DMCA is an interesting example of government capture. The legislation was largely spearheaded by the filmmaking industry that was concerned about copyright protection in the new digital age. The lobbying efforts by the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA) pushed for legal protections against illegal access, duplication, reproduction, and distribution of copyrighted property. These protections ultimately served to protect their own profits and market dominance. However, these DMCA protections come a direct cost to consumers who are restricted from utilizing the property in any way they desire or even repair the electronics that they purchase. The DMCA is the reason why the Right to Repair coalition exists. Household appliance, smartphone, and farm equipment companies utilize the protections from the DMCA to make it extremely difficult to source the tools, parts, and manuals a consumer needs to conduct a repair. Consumers ultimately have to spend more money on outrageously over-priced repair services from the manufacturer or buy a new device altogether.

Got Corn?

 Earlier this evening, a sense of dread overcame me as I filled my car with gas. As I watched the meter run over $60, I could feel my wallet let out a quiet weep of despair. While I stood there watching my bank account deplete, I noticed a sticker on the gas pump that said, “Contains 10% Ethanol.” 

After a bit of research, I realized that I had stumbled upon a classic case of Stilger’s capture theory. The reason that I was pumping fuel that contains 10% ethanol comes from a program called the Renewable Fuel Standard. This program requires that a certain volume of “renewable” fuel be mixed in with any transportation fuel (gasoline) sold in the U.S., which, in theory, will reduce the quantity of fossil fuels used and thus help the environment by reducing emissions. 

Since its implementation in 2005, the main benefactor of this program has not been the environment but instead the agricultural industry–particularly corn producers. Since the RFS was put into action, over a third of corn production in the US has been devoted to ethanol production. This new, steady demand for corn has led to negative production externalities such as the destruction of natural habitats (to turn land into corn fields) and water pollution from fertilizer runoff. Critics of the RFS have cited these environmental concerns and increased consumer costs as incentives to do away with the program. 

The RFS began as a promising program. Still, its effects have not been as intended, and it now primarily serves special interests who benefit from the market for corn it creates (as well as providing a barrier to entry for alternatives such as foreign oil). 

Stigler in Nature!

In my English class, we read Justice William O. Douglas's famous dissent in Sierra Club v. Morton. A year after Stigler published his "capture theory" paper in 1971, the US Supreme Court ruled that a ski resort in the Mineral King Valley caused no substantive harm toward the Sierra Club members, affectively siding against nature. 

Douglas primarily advocates for granting legal standing to inanimate natural objects. But he also questions whether regulatory agencies can be effective protectors of the environment. Douglas observes that government regulation is often "oriented toward the interests of industry it is designed to regulate," calling out the Forest Service for being "notorious for its alignment with lumber companies."

I believe Douglas pulled from Stigler in this dissent, which means Stigler's ideas indirectly impacted the US environmental movement. 

 

 

Expressively Unhappy: A Voting Dilemma

Expressively Unhappy: A Voting Dilemma 

 The other day I got a letter informing me that "this year more Virginians than ever are voting! Don't be left behind!" Aside from the obvious confusion of why anyone would think a postcard is the best way to convince a twenty-year-old college student to vote, my public choice immediately questioned: am I not much less inclined to vote if more Virginians than ever are voting? As more and more people vote my expected benefit of voting gets lower and lower as more and more people crowd out any chance I have at a deciding vote. 

But beyond this, I wondered why it is that more people than ever are voting this year. Compared to previous years the sentiment feels like each side could be more enthusiastic about their own candidate, and as of October 1st 58% of Americans surveyed expressed they would want to see a third party according to this Gallup poll. Further, the graph below shows voter turnouts for primary elections in Virginia, which are relatively very low compared to previous years. Although you could argue that the numbers are low due to the inevitability of the two candidates, one of those two candidates is no longer running so it seems they were not so inevitable. 

Although we talked about expressive voting to show support, we did not consider expressive voting out of severe disapproval of the alternative. The way I see it: partisan voters may feel one way or the other about their own candidate, but more so than in previous years are driven to vote so they can tell themselves they voted against the alternative. 

Regulation in ᑓᑌᑎᕮ

In Dune, interstellar travel and trade are regulated and granted to the Spacing Guild, as described on Reddit:

The Spacing Guild enjoys its profits and share of political power. However, Navigators need spice to calculate safe travel paths. The only source of spice is on the planet Arrakis, or Dune. This makes spice the most precious resource in the economy, and thus also regulated. And vulnerable… 

Any disruption in spice supply would delay travels and render the Navigators powerless. The protagonist, Paul, capitalized on this when he threatened to destroy all spice fields, successfully coercing the Guild to his will. When Paul became emperor, he limited the supply of spice to the Guild, realizing how stagnant the previous regulation made the economy. 

In the long run, the Guild grew obsolete in power as spice became inevitably scarce. Instead navigation computers get developed, creating efficient and renewable space travel. Thus, regulation placed a barrier on innovation. It also led to the downfall of the industry it was meant to protect; economic forces prevailed over unstable political forces.

Am I the Best Roommate Ever?

 Figuring out housing for next year was one dilemma, but now that we have the lease signed, a new problem has arisen: picking rooms. In class, we discussed two types of costs resulting from collective action: decision making and external costs. In my current scenario, both of these costs are present. 

1. The decision making costs of coming together and choosing a room 

2. The external costs imposed by the room choices themselves 

In this example, external costs could be the unhappiness of a roommate who gets their last pick room based on the voting method. For example, if we did room selection dictator style, external costs would be extremely high. Now, I know this seems like it might be an issue with relatively low external costs, but 6 girls fighting for the best natural lighting in the house they’re going to spend all of 8 months in? Seems pretty high to me. Moving on, however, if we wanted to vote unanimously, decision making costs would also be high because it would be difficult to agree collectively if two people want the same room.

So, where does me being the best roommate ever come in? Well, I am particularly indifferent in my room choice for next year. Removing me as a collective decision maker reduces both the number of voters and the number of voters required to agree. My external costs are extremely low because, for me, any room in this house is an upgrade compared to my current room (shown below). So, since my external costs are low - I am making all of my roommates' lives easier in this collective action dilemma by potentially reducing external costs (taking the least preferable room) and decision making costs (one fewer person needed to reach unanimity).

                                         My room. That I share.

Florida's Threshold Between Life and Death

In class, we discussed voting thresholds in relation to cost minimization in collective action. In cases where external costs are very high, we agreed that the threshold for action ought to be high as well. There is no cost higher than a loss of human life and, as such, issues where people may lose their lives should, then, have high voting thresholds. But how high is high enough? How do we best balance external and decision-making costs?

In Florida, Parkland school shooter Nicholas Cruz was sentenced to life imprisonment  for his crimes. However, many people were upset by this decision, as the death penalty is an option for murder under Florida law, and they felt that this would have been a more appropriate punishment for Cruz. He was not given this sentence, as the threshold for applying the death penalty was unanimity among the jury, and jurors in his case voted 9-3 in favor of a death sentence, achieving a majority but not the required unanimity for a sentence of death. In response to this, Florida changed its laws, lowering the standard to apply a sentence of death to a vote of 8-4 (a 2/3 supermajority). 

Here, we see the debate between lowering external and decision-making costs clearly. Opponents of this law argue that the external costs of an unfair death sentence are too high for a lower threshold, and that many undeserving people would be more susceptible to facing these costs with the lower threshold. Proponents, on the other hand, feel that the system requiring unanimity was inefficient, and that the cost of one juror holding out and sparing a person deserving of death from receiving just punishment was too high.

High Stakes, Higher Waste: Lobbying as an All-Pay Auction

    In U.S. politics, the influence of lobbying groups located on K Street in Washington, D.C. has grown tremendously, but at what cost? As seen through the lens of public choice economics, lobbying operates much like an all-pay auction, where lobbyists must “bid” resources to sway policy decisions. These resources, whether time, money, or influence, are often monetary amounts given to politicians in the form of campaign contributions; the lobbying firm that pays the most will win the government favors. However, unlike a traditional auction where only the winner pays, in an all-pay auction, everyone pays their price regardless of winning. This means that in the high-stakes world of lobbying, all firms invest heavily, even though only one policy outcome will prevail. Therefore, most firms are expending resources they’ll never get back, leading to huge inefficiencies in this process. As a result, lobbying becomes a game of asymmetric information in which some firms may have disproportionate advantages over others.

(Photograph: Karen Bleier/AFP via Getty Images)

    Keep in mind that these inefficiencies extend beyond the firms or organizations directly involved in this rent-seeking behavior. When resources are spent on lobbying bids that fail to deliver, public choice economists argue that society as a whole loses out. These resources poured into lobbying are spent on trying to capture existing wealth and could instead be used to create new value. For example, these resources could otherwise be invested in innovation, public services, or improving infrastructure. Moreover, policies shaped through lobbying by those with the deepest pockets tend to prioritize the interests of the few instead of the broader public good, therefore unfairly distorting policy outcomes. As a result, the all-pay auction approach to lobbying not only wastes resources but also risks changing legislation to serve special interests rather than total societal welfare. Implementing lobbying reforms that promote transparency and limit the influence of money in politics could greatly diminish the inefficiencies of this rent-seeking behavior. Ultimately, this would reduce the waste of resources that could serve public, rather than private, interests.

The Patent Paradox

Patents are extremely prevalent entities in today’s markets, resulting in 346,152 patents being issued in 2023, with the US Patent and Trademark office estimating that $3.7billion is spent on patent fees alone. This number does not include the research and development, grants or other means of funding, or lobbying for the product incurred by the patent-seeker. Patents are fundamentally rent-seeking. The patent process involves a federal government agency vetting a product and granting an inventor exclusive rights to their unique product for a set period of time, typically around 20 years. While these inventions are still governed by anti-trust laws, these patented products can and often do create quasi-monopolies, pushing other companies out of a market due to greater efficiency and/or lower costs of the product. However, because of patents’ temporary nature, they do not guarantee monopolies but can create enough of a buffer to establish oneself as the giant in an industry. 

Patents are crucial to incentivize innovation and fuel capitalism in the US, pushing inventors to constantly improve their products for financial gain and increase in national GDP. Key technology patents alone are the cause of roughly 2.85 trillion USD in GDP per year in the US. These patents however come at a societal deadweight loss. Approximately 90% of patents are rejected at least once, incurring more expenses like forgoing the endeavor or investing more resources to secure the legal rights of the product. In turn, a series of government agencies has to be funded to grant patents, monitor them, and enforce them, and consumers have to pay more taxes and more for the products or services in stores and online.

Elon Musk Makes Economists :(

Recently, Elon Musk said he will hand out $1 million dollars a day to a random voter in Pennsylvania (a swing state) who votes Republican. Obviously, there are serious concerns that this is very illegal (vote buying), but nonetheless it is his plan. By doing this in a crucial swing state for both Harris and Trump, Musk hopes that his actions will tip the scales in favor of Trump, who ideally will limit regulations and provide contracts to Elon.

There are two ways I can take this: Elon rent seeking from the government, or individuals rent-seeking from Elon. I find Elon's relationship with the government more interesting, so I will go with that. For the government, if they wanted to hand out rents, there are a few ways they could go about it: they could give it to those who provide the most value to society (which makes us happy), they can use a lottery (which makes us indifferent), or provide to those who lobby the most effectively (which makes us sad). Trump would allocate by this final method, instead of giving it to those who benefit society the most. If the government instead provided rents to the most worthy of them, in the case of SpaceX and its competitors, this may mean giving rent to companies that have the least carbon emissions, or even the closest to sending a mission to Mars. By doing this, there is no negative societal impact on the government giving out rents.

Drowning in Amenities

Universities are meant to be havens of academia, with professors conducting research and students cultivating their knowledge. Recently, however, a trend has emerged where universities offer luxury amenities to attract students, a departure from their academic pursuits. This can be seen as rent-seeking behavior. 

Take, for example, Louisiana State University's lazy river in the shape of “LSU.” A premier research university, LSU officially states that their mission is to “the generation, preservation, dissemination, and application of knowledge” and the development of students for “lifelong success.” How does a lazy river help achieve this goal? It doesn’t.

This is a clear misallocation of resources that should be invested in academics. Instead, funds are diverted to “perks” designed to draw in students, resulting in increased tuition. More rent is extracted from enrolled students with no change in academic results.

There is a significant negative social impact. Higher tuition increases the burden of debt and exacerbates unequal access to education. The shift of focus erodes the academic values of universities, trapping them in a race to attract more students through sparkly benefits rather than educating. Universities need to re-examine their priorities and question whether these changes add real value to society or if they only benefit individual universities.

Rent Seeking, Literally

In an episode of the TV show Friends, Ross is looking for a new apartment and finds that “ugly naked guy” is moving out of his apartment across the street. It’s Ross’s dream apartment so when he finds out that “ugly naked guy” is subletting the apartment himself, he sends him a gift to try and sway his decision. Unfortunately for Ross, many other applicants have the same idea and send over lavish gifts to try and win the apartment. 

This “auction” for the apartment is an open competition. This leads to rent seeking behaviors to try and get the prize of the apartment. The outcome in this case is allocatively inefficient because applicants are using resources to buy bribes instead of using those resources in more efficient ways. For example, one applicant buys “ugly naked guy” a mountain bike. This expensive gift may not even generate utility for the recipient depending on whether or not he bikes or already owns a bike. Ross even spends time lobbying “ugly naked guy” in person. Hence, the time and money used to bribe him for the apartment are used in an allocatively inefficient way. Additionally, this situation is akin to an all pay auction. Ross cannot get back his $12 basket of mini muffins even if he does not win the apartment. This literal rent seeking is socially wasteful.

Mission (Statement) Failed

My club ultimate frisbee team held a players' meeting to brainstorm a mission statement, which details the core values of an organization. Small groups created and nominated a mission statement, followed by a vote. However, the team lost interest, and we ended up with a short, uninspiring mission statement.

After reading Buchanan and Tullock's analysis on external and decision-making costs, I now understand why things turned south. Despite my excitement about it, the mission statement had little external costs on our players. Even if you disagreed with the values, it wouldn't immediately affect our organization. Furthermore, there were higher decision-making costs than I expected; players wanted to get home at 9pm on a Wednesday. 

My teammates' rush to finish the process, even if no statement received a simple majority (K/N<0.5), is a rational choice to minimize the sum of the external and decision-making costs. 

Fantasy Football Logrolling

 A couple weeks ago we talked about logrolling. Logrolling is a method used by politicians to get their bills passed in the form of an IOU. If one votes for the bill then the issuing party agrees to vote for the other. This can obviously be beneficial to both parties as they have the chance of their bills being passed. While advantageous there could be some moral dilemmas.

I was presented with such an offer a couple weeks back by my roommate,Teddy, in our  house fantasy football league. Fantasy football is a game where you draft a team of football players and earn points as they perform. The league is compiled of people who watch football and others live in the house and wanted to play. Teddy being somewhat knowledgable in football wanted to scam the ones who didn't know anything. He came to me and proposed that I convince people his trades were good and he would do the same for me. I saw no reason for this because I had a good team and found it distasteful.

When Tutoring Pays Off for Everyone

As an economics major who is arguably bad at math, I am shocked I've made it this far. When looking back at my economics career here at the University, I wondered what got me to this point successfully. My professors? Sure, they've been pretty good, but that's not it. Myself and my drive for economics? No. This happens to be my first blog post.....anyways. My peers? Yes. My peers have helped me through almost every single economics class I have ever taken - willing and able to answer every minuscule question I might have, support me in understanding challenging concepts, and being a shoulder to cry on. While I probably should have invested in a tutoring service instead of bombarding my friends, I didn't, because they could end up helping me get to the correct answer just as efficiently, without affecting my bank account. 

This got me thinking about tutoring acting as a positive externality in consumption. Tutoring offers immense value to not only the students getting tutored, but their free-riding friends who reap the benefits as well (me). When one of my peers pays for and receives tutoring services , the clarification they received gets extended beyond completion of a problem set, but in making a clearer exam study guide, organizing notes, and explaining difficult concepts to friends. So, when I get clarifying answers from a peer who has paid for a tutoring service, I am also benefiting from my friends consumption of tutoring, exemplifying a positive externality in consumption. 

As noted in the link, the cost of a graduate economics tutor here at UVA ranges between $40-$80, reflecting the value that is provided directly to the student who signs up for tutoring. However, I wonder if the knowledge-sharing aspect of tutoring is captured in this fee (possibly, because these tutors are obviously well versed in economics, but for the sake of my blog post, it is not). Assuming it is not, the total societal benefits of tutoring are greater than the private monetary benefit to the tutor, leading to underconsumption in tutoring services - demonstrating an example of a positive externality in consumption. 

Awkward Conversations: The True Transaction Cost of Coasian Solutions

 Though we have not discussed Coase in class recently, thinking back, his ideas made me wonder as to why we do not see Coasian solutions to externalities occur more often in reality. It seems like such a good idea in theory - being able to come up with a market solution to a negative (or positive) externality conundrum. In particular, I was reminded of Coase when I was on the Amtrak from Charlottesville to Trenton, New Jersey for fall break. It was a very crowded train, as one might expect on that date, and in front of me, two people were chatting rather loudly. At first, this did not bother me; after all, what's wrong with two friends reconnecting on a good old train ride?

But when we were approaching the fifth hour of this journey and the clock struck midnight, the frankly incessant talking had begun to wear me down: a negative externality was being imposed on me. Coase would have encouraged me to negotiate a solution with these people to stop them from talking; perhaps $20 or so would be a fair arrangement. But herein lies the problem; even if both parties would be content with that payment, I would never actually propose this solution, for fear of social embarrassment. This is why, I believe, Coasian solutions are seldom seen in practice - there is a rather large transaction cost to ask somebody you don't know to stop what they are doing, and thus imply that they are negatively impacting society. 

Better Read the Terms and Conditions

 Dr. Kanokporn Tangsuan died of an allergic reaction after consuming food at a restaurant in Disney World on October 5, 2023. She died even despite the server's assurance that her allergies could be accommodated. Her surviving husband, Jeffrey Piccolo, sued Disney parks, but Disney argued the lawsuit should be dismissed and resolved through arbitration since the couple agreed to the terms and conditions of the Disney+ service and the Walt Disney Parks website. Disney, facing immense media and public backlash, eventually dropped the effort to dismiss the lawsuit. 

Similarly, a couple that was involved in a major car accident while in an Uber ride in March 2022 sued Uber for damages, but Uber argued that the couple had agreed to arbitration by accepting the terms and conditions of both the Uber Eats and Uber Rides apps. The plaintiffs argued that it was their young daughter who had clicked "agree" to the terms and conditions, but an appellate court still sided with Uber and ruled that the plaintiffs cannot take Uber to jury trial. 

Not thoroughly reading through the terms and conditions for every account you open, app you download, or website you visit is a clear example of rational ignorance. There are simply high marginal costs to reading the super long, complex, and obscure terms and conditions for minimal marginal benefit in return. However, I also agree with the general public backlash that it is outrageous for companies to take advantage of this rational ignorance.

"JUST PICK ALREADY!"

My friends and I could not figure out where to get dinner last night. Asado had too long a wait, Virg couldn’t seat us together, and most didn’t want Canes. I weighed the external and decision-making costs in my head. 

First, the external costs. Many of us didn’t want Canes, and though we were hungry, we would spend dinner dreaming about Virg Mac N’ Cheese. The goal was to spend time together, and splitting the group at Virg would defeat that purpose, leaving everyone unhappy. Asado would mean waiting an hour for a table, making the group hungrier (crabbier) for longer.

Next, the decision-making costs. We were negotiating and complaining about each option outside in the cold. The more people we needed for agreement the longer we would debate. The longer we debated, the colder and hungrier we would become. Aiming for unanimity would increase the decision-making costs even if it would remove external costs. 

A simple-majority seemed preferable to a unanimous decision, lowering decision-making costs without pushing anyone’s external costs too high. Once half of the group agreed on Canes I yielded the fight for Asado and followed them. I may have been eating over-priced chicken tenders, but I got to see my friends and I (think) the group’s costs were minimized. 

*I love this stuff*