Has the holdout problem doomed plastic waste management?

This week, Busan, South Korea, is hosting final round negotiations over a legally-binding agreement designed to address the issue of plastic pollution across the world. Going into the week, there are still some major issues to be resolved. The primary divide is on how much plastic companies (and countries) are allowed to produce.

A proposal by the ‘High-Ambition Coalition’ (HAC), consisting of the European Union and many African and Asian countries has proposed a holistic look at the problem, placing guardrails and caps on each step of the plastic lifecycle- production, consumption and end-of-life. Some of the most stringent measures include fixed caps on production.

Some of the major holdouts in the process have been countries with fossil-fuel focussed economies, many Middle-Eastern nations, China and the US for example. These countries have expressed concern with the more restrictive measures that would curb the production of the capacities of their economies, arguing that “many countries do not seem themselves represented in [HAC’s proposal].” 

With the recent election of President Trump in the United States, America’s position on the issue has been thrown up in the air, with many believing the United States will not sign on to this treaty. With the stance of some of the world’s largest plastic polluters unclear, any hope of a treaty being finalized be doomed due to the holdout problem

No Such Thing as a Free Point

 Every year our teachers ask us to fill out teacher reviews. It seems to be in the best interest of teachers for us to fill these out, as many try to incentivize us to do so. Many teachers go with the straightforward approach: students that fill out the survey will receive an extra point or so added to their final grade. Some teachers get more creative with it, having some threshold of students needing to fill out the survey for everyone to receive an extra point (these teachers are likely not aware of the incentive given here to free ride, my public choice learning warns against this approach). 

I think this represents some solution to the principle-agent problem. Though students are not exactly agents for professors, this is still an effort to align the incentives of the student and the professor. The professor would like for the survey to be filled out, but most students are unlikely to do so if there is nothing in it for them. One thing I do find interesting about this is that this is done in some classes where the final grade is decided by a curve of overall performance in the class, so if everyone were to fill out the survey the point would be meaningless.

One of my teachers this year has decided not to follow the free point model. They instead have informed us that any student that does not fill out the survey will have points taken off of their final grade. From a public choice perspective, this should achieve the same outcome, as for the consideration of the student their grade will be one point higher than otherwise if they decide to fill out the survey. But if I am not thinking from a public choice perspective, I think this is pretty uncool. If any one reading this blog happens to have the opportunity to enforce this same rule for a class of their own, I would warn them that I have recently been reading about the benefits of creating a union...

Bureaucracy Goes to Bat

While watching Moneyball this weekend, I saw parallels between the A’s scouting department and some of the issues seen in bureaucracies we’ve talked about this semester. 

One issue within the scouting department was the measurement problem. Most scouts relied on qualitative characteristics like intangibles and physical attributes, along with traditional stats like batting average to evaluate players. However, these methods failed to capture a player’s actual value, as Peter Brand (who graduated from Yale with an Econ degree) pointed out using sabermetrics. This is similar to how school districts use standardized test scores to evaluate student performance, which we know fails to capture a student’s true academic ability, and can lead to an inefficient allocation of resources. 

In a very loose sense, the A’s scouting department could be collectively viewed as monopoly suppliers of their good: recommendations on which players to sign/draft/trade for. In the traditional model, the only ones fit for the scouting job were those with superior expertise and experience in the sport. This introduced information asymmetry, where management had to trust scouts’ subjective evaluations without an independent way to verify their accuracy. It was then easy for the scouts to blame inefficient outcomes (i.e., losing seasons) on their small budget compared to large-market teams. They argued they simply couldn’t compete without a larger budget. 

Billy Beane and Peter Brand tackled the measurement and supply within their front office by utilizing more tangible units of output (OBP, FIP, WAR, etc.) which gave an alternative source of information separate from the scouting department’s subjective opinions. This led to a more efficient outcome for the A’s (a record-breaking season) and the implementation of analytics-based evaluations across the league.

More Housing, Not that Simple

In Minneapolis, real estate developer Cody Fischer aimed to take down one big house and instead build an energy-efficient, four-story, 32 unit apartment building. He got the main approval to do his project but then had to halt. 

A group of environmentalists sued the Minneapolis government because its housing plan did not undergo environmental review. They believed the increased density would harm the city’s water, air, and ecosystem. Fischer’s proposal was also initially rejected by the planning commission because local neighbors were against it (concentrated interests of a few).

Eventually, the state government stepped in and removed these legal obstacles for cities like Minneapolis that had a detailed housing plan. Fischer and other developers were able to start their projects.

This ties to Becker’s conclusion that no policy that lowers social welfare will be passed. Increasing housing will bring about positive social welfare. The two competing groups were developers (S) and neighbors/environmental group (T). Ultimately the pressure by developers won, implying a larger group size and higher resources per capita. Free riding didn’t break down the group. Additionally, higher level government can be more effective in addressing broader issues like housing. At the local level, private interests (neighbors) can overcome the greater social interest (those who can't find housing).

AI's Water Footprint

A while ago at the beginning of the semester we talked about externalities. Externalities are a cost or benefit that affects a third party who is not directly involved in an economic activity. More recently in class we have talked about the usage of AI platforms such as Chat GPT, and how they so positively impact our everyday lives. However, there is a cost to using AI like Chat GPT that often goes overlooked - the environmental impact.

There is a negative externality in production associated with the provision of AI tools that is accelerating the loss of our scarcest natural resource: water. Companies that provide these AI tools have drastically increased their water usage over the past few years as their technological reach has expanded. The massive water consumption stems from a need to maintain optimal temperatures for densely packed servers and computing hardware racks so as to not overheat these components crucial to providing the technology used in AI. 

While there are currently no comprehensive regulations targeting this water usage, there are a few public-choice backed ways regulation could be implemented. 

1. A tax on water usage past a certain level (though this does not incentivize corporations to innovate)

2. A market for permits for additional water past the permitted level 

3. Or, as Coppock once said “Shut the bastards down” 

A Complete and Thorough Review of Abigail Spanberger

My congresswoman (Yes, I know who it is, Professor Coppock) is Abigail Spanberger. Congresswoman Spanberger has represented VA-7 for the past five years, and I have always thought she has done a terrific job. However, after our class last week, I realized I might not be doing a great job of holding my representative accountable for her votes in Congress.

As a result of my rational ignorance (I mean, I have econometrics to study—why would I keep track of her voting record?), I’ve come to understand that I may have inadvertently contributed to the slack that allows my representative to vote according to her own ideology without much consequence from the electorate. This excess slack creates more opportunities for shirking, enabling representatives, like Abigail Spanberger, to avoid fulfilling their full duties to their constituents.

To combat this problem single-handedly, I decided to conduct my own analysis to see how satisfied I truly am with my congresswoman’s actions. As it turns out, you can find a record of every congressperson’s voting history and ideological score on GovTrack. Here are some surprising facts I discovered:

• She was one of the only Democrats to vote no on the Protecting American Lungs and Reversing the Youth Tobacco Epidemic Act of 2020 (potentially influenced by her constituent Altria).
• She was one of seven Democrats to vote against the Freedom for Health Care Workers Act, which repealed the COVID vaccine mandate for hospital workers.
• She was one of four Democrats to vote in favor of making the assault of a law enforcement officer a deportable offense.

I was surprised to learn that Spanberger is one of the most moderate Democrats in terms of her ideology and voting score. While I may not be thrilled with some of her votes, I am still proud to have her as my congresswoman. Perhaps in the future, I’ll pay closer attention to ensure she isn’t shirking her responsibilities—especially if she becomes our future governor.

What a Waste! (Literally)

 After class today, I remembered hearing something a couple years ago that the military would have aircraft fly in circles for hours just to burn fuel and keep costs high. Under the pretense of training, pilots acted in the best interests of the "Senior Bureaucrat". After googling for a little while trying to find evidence about what I remembered, I came across an article that said during Reagan's Presidency, the Pentagon bought $640 toilet seats and $7,600 coffee makers. After the news broke, some members of Congress spoke out about the ridiculous purchases, yet nothing was done.

This is a clear example of the 5th assumption of Niskanen's model - where bureaucrats will exhaust their budget to ensure they receive as much benefit as they can in the future. Additionally, this example is indicative of how bureaucrats will overproduce beyond an ideal Q*. The marginal benefit for these purchases is extremely small - a few hundred dollars combined for the two would certainly suffice. With thousands of dollars spent, it is clear that the marginal cost exceeded the marginal benefit for these purchases, reinforcing the idea that bureaucrats are not efficiently allocating their budgets.

Will Politicians ever change?

 Earlier this week, I attended a talk on geopolitics by Noah Rothman, organized by the Blue Ridge Center. Noah's main argument can be summarized thusly: tensions are rising all over the world and most foreign powers, at least those that are not allied to the U.S., share a common goal: ridding the world of U.S. hegemony. He proposes that we cannot simply expect to have peace without a cost, and we need to drastically increase our military spending and foreign aid (to countries such as Ukraine, Israel, Philippines etc.), otherwise, Russia, China, Iran, and other long term U.S. adversaries, will work in unison to dethrone the United States as the world's leading superpower. 

He addressed this briefly in his speech, but I think there is a very pressing issue in our political system that will prevent this from happening. The reality is, our representatives are vote maximizers and the vast majority of politicians' constituents would certainly not support a further increase in the United States' foreign war efforts. Having said this, we have analyzed that politicians also act out of their own ideological beliefs, not just the preferences of their constituents. So, it certainly is possible that if a representative had such a strong conviction to propose an increase in military spending, it could outweigh their desire to appeal to their constituents. Nevertheless, it is my belief that this is unlikely to happen and even if politicians agreed with Noah's viewpoint, their desire to retain power would surely trump their willingness to forgo their political career for the sake of such a policy. 

The Ultimatum Game

 Earlier in the year we talked about pareto equilibriums with decision making. In one situation we had a triangle with each point representing different peoples preferences. In that situation there was no equilibrium because the preferences moved around the triangle. According to professor Coppock agent A should accept agent B's proposal so long as it didn't negatively affect agent A. I however disagree with this statement because I'm not accenting any proposals that benefit someone else and not me. Ted brought up a real life example of this which is a variation of the Ultimatum Game. Let's say there are two people with an equal claim to 100 dollars and both have different roles. One decides how to divvy up the money and the other has the power to accept or reject the proposal. If agent b rejects agent a's offer then neither gets the money but if they accept then the money is divided up according to the proposal. Ted said he would accept any amount of money so long as the money went straight to his bank. I refuse to accept any amount of money less than 20 dollars. If I am a rational consumer I should accept any amount of money because I get some utility even it it's only a penny. I will not reward the greedy bum who offers me less than 20 dollars because the utility gained from the money is less than the utility gained from spiting the other person.

Free Speech in Academia

Today in class I couldn’t help but chuckle to myself a little as Mr. Coppock started discussing Detroit Lion “ism” and how his mood can depend on the extent to which the world around him aligns with his ideology (i.e., whether the Lions’ performance during the season reflects his belief they are the best). It was reminiscent of a conversation I had with one of my roommates last night.

A firm supporter of empiricism and medical science, my normally soft-spoken roommate had a vehement reaction to her professor's "promotion" of home births. “She was saying that despite literature supporting home births most women still give birth in the hospital. Obviously the hospital is safer!”

Proponents of home births point to literature supporting lower maternal morbidity rates and higher reported satisfaction levels. My own belief in modern medicine makes me agree with my roommate; in the case of a medical emergency, you are almost certainly better off in a hospital than at home. I would imagine most expecting parents would prioritize newborn safety above cost or comfort. 

Not unlike politicians, ideologies professors hold can affect their actions and curriculum. While not elected, faculty review and academic oversight of professors can similarly act as a “check,” limiting slack. The tenure system itself was created in part to protect slack, allowing professors to speak freely without fear of punishment by their university. Just as politicians have been shown to best reflect the interests of their constituents when closer to reelection, I would imagine professors are likely to express more mainstream and “safe” views while they are being considered for tenure. 

Entry Regulation on the Pro Tennis Tour

Tennis governance is fundamentally broken, with the four most prestigious tournaments- the Grand Slams- each having their own organizational bodies, and the second most-prestigious tournaments- the ATP/WTA 1000-level competitions being organized by the ATP/WTA respectively.

In late 2023, with growing fears of a Saudi- backed breakaway tour, the ATP began to lobby hard for the introduction of a new 1000-level event that would take place at the start of the calendar year in Saudi Arabia, seemingly to placate PIF -backed bidders looking to get involved in the sport. The move would further congest the tennis calendar by adding to the already draining tennis season. The proposal was quickly condemned by the Grand Slams, who pitched their own ‘premium tour’ that would compose of the 4 Grand Slams and the 9 1000-level events to create an F1 style calendar that the top 100 players would compete in. While on the face of it, it may seem like an initiative designed to reduce the burden on the best athletes in the sport, it quickly became clear that this was also an initiative to block the entry of a new Saudi-based 1000-level event. Tennis Australia, the Australian Open’s organizing body, has taken the lead in this proposal of the new ‘premium tour’. With the proposed Saudi Arabia tournament being pitched for a January spot in the calendar (when the weather would make an outdoor competition feasible), Tennis Australia’s annual ‘Summer of Tennis’ tournaments would be slashed in half, with virtually all the smaller tune-up tournaments in Australia/NZ being overlooked by athletes.

The Grand Slams (acting as a cartel in this scenario) have effectively tried to leverage their position as the biggest draws (for players and fans alike) in the sport to place the entry controls on the sport, and block a proposed Saudi Arabian 1000-level competition. While this issue is far from being resolved, and both proposals remain on the table, it will be interesting to see how the situation develops in the next few months with the Australian Open right around the corner. 

The Carbon Hustle

Amid all of the post-election analysis, I’ve heard a lot of talk about climate change and the future of the energy industry in the U.S. under a second Trump administration, particularly concerning the Inflation Reduction Act signed into law by President Biden in 2022. A prominent feature of the IRA was the creation and expansion of tax incentives and subsidies for clean energy projects, which has benefited oil and gas giants who have the resources to invest in new green technology. 

There are a multitude of opinions on how to deal with the climate issue. Trump has made it clear that he wants to dismantle the IRA’s climate policies and green energy initiatives, and even members of his own party don’t wholeheartedly agree with that decision, but what’s caught my eye as a public choice student has been the response from the energy industry. 

ExxonMobil CEO Darren Woods went on the record pushing against Trump’s ideas for the IRA (ExxonMobil has been heavily investing in carbon capture technology, and the IRA provides large sources of funding for these long-term projects with its tax incentives) and instead offered another solution–more regulation on carbon. Why in the world would the CEO of one of the largest oil companies want more regulation? If you ask him, it’s because the climate crisis needs to be addressed, and more oil production would harm the domestic oil industry. I think Stigler would say, “regulation is a friend of the incumbent.” Regulation of carbon intensity could potentially create barriers to entry for foreign competitors and smaller domestic firms. Large, established firms like Exxon have the ability to, and already have been, strategically adapting to the changes in climate policies. It seems to me that special interests are pushing to retain the regulation they have already captured and are seeking more in the new market for green energy. 

RFK and Capture Theory

This week, President-elect Donald Trump nominated Robert F. Kennedy Jr. as his choice to run the Department of Health and Human Services. While RFK does not have much of a history with anything health related, he has a track-record of speaking out against large corporations, and if his nomination is confirmed, he seeks to “stop the revolving door between industry and government”. 

To us as public choice students, it should not come as a surprise that “Washington’s lobbyists are stunned Trump chose RFK Jr” given what we know about the Stigler-Peltzman capture theory we discussed in class. Within the context of RFK’s nomination, the Stigler-Peltzman theory predicts that the Senate may block this nomination in favor of the industries that RFK’s policies would restrict. 

Capture occurs here since RFK is proposing policy that would impose significant costs on industries like processed food manufacturers and fast-food chains. Due to these proposed policies, these sectors actively invest in lobbying because they have a strong incentive to safeguard their narrow financial interests and exert political pressure on the government by potentially withholding campaign contributions or endorsements for re-election. In this case, acquiring a block against RFK by the Senate ensures profit for the firms.

So, given this knowledge on public choice, I am intrigued to see whether the Senate will block RFK, or if Trump will be able to navigate around the Senate's approval.

Slack in universities?

Earlier this week my friend was complaining to me about a class which is about the topic she likes a lot, but she said the professor always seems to come a bit unprepared, and the lectures are a little disorganized. I am not making the argument that the professor is shirking but the word slack we learned in class quickly came to mind. Unsuprsingly, Tenured faculty has a much lower termination rate when targeted for sanctions than fixed-term faculties(16 percent v. 53 percent). It's also universally agreed that it's quite hard to get fired as a tenured professor. So I thought, in the rare case when a tenured professor really is shirking, can we avoid it? I thought about it, and the conclusion I reached was no.

In class, we talked about how to avoid employees from shirking. 1. monitor(have the knowledge of whats going on). 2. well-defined objectives)single dimension output) 3. frequent performance reviews. 4. secure many alternatives. Based on this metric, it seems to me that it's quite hard to avoid tenured professors from shirking, for the reason that 1. Monitor: It is often difficult to monitor the daily activities of tenured professors since there are various forms of academic work (teaching, research, etc) and can be private. 2. 2. well-defined objectives: Unlike many roles, teaching and research outputs are difficult to quantify consistently, and success in these domains is often subjective. 3. frequent reviews: Tenured professors have limited performance reviews compared to non-tenured faculty. 4. Alternatives: Yes, there may be some alternatives, but universities have limited options to replace tenured professors, given that tenure is a form of job security that makes dismissal challenging unless there is a serious misconduct.

If You Don't Like It, Take Your City And Leave!

About three years ago in Atlanta, I started seeing "Buckhead City" signs in the yards of some of my neighbors, as well as around some of the local businesses in the area. After looking it up, I discovered that these signs were referring to a movement for Buckhead, the northern part of Atlanta, to leave Atlanta and become its own city. Many people were frustrated with the leadership in Atlanta, and felt like they did not have the adequate representation they were entitled to based on the taxes they paid. They felt like the Atlanta government was acting against what they believed to be their own self interest, and they felt a new smaller city could more accurately word towards these interests.

I think in some way this would be an example of Tiebout's concept of voting with your feet. In this case the people would not actually be moving (their feet would not be very involved), but they would be leaving one city to join another where government actions line up more with the things they want. Further, the existing city of Atlanta would have seen real changes in their spending habits from this, as they would have been losing a large source of their tax revenue. Atlanta would have had to then make adjustments to raise its population after losing this significant chunk, according to Tiebout's claims.

To this point, the Buckhead City movement have not come to fruition, and likely wont. Part of this was that creating a new city would have been very costly, and would have required Buckhead to completely recreate many existing and working functions of the city of Atlanta. But another part of this was that the new mayor of Atlanta, Andre Dickens, knew this would have consequences for the city of Atlanta, and acted to make sure Buckhead residents felt heard.  In his Inaugural Address, Dickens argued for "Atlanta Unity", saying "We don't need separate cities. We must be one city with one bright future." 

I think this move from Dickens proves that Tiebout is onto something. To prevent the move from happening Atlanta had to make itself more attractive for people that would prefer to be elsewhere, to avoid severe population and tax revenue loss. In here we can see economic incentives truly do drive the formation and transformation of cities. 

Plastic Bags and Externalities: How Cities Use Taxes to Address Pollution

        As the effects of pollution and climate change become increasingly visible, governments around the world are taking action. On January 1st of last year, the City of Charlottesville implemented a five-cent ($0.05) tax on disposable plastic bags provided to customers at checkout in grocery stores, convenience stores, and drugstores within City limits. Essentially, this tax aims to limit the negative pollution externalities by disincentivizing individuals from using single-use plastic bags and incentivizing individuals to use reusable alternatives. As said on the City of Charlottesville Government website, 

“While this does not eliminate the use of plastic bags altogether, it incentivizes the use of reusable materials like bags, boxes, and baskets to transport purchased items. An important provision of the ordinance requires that the revenue from the 5-cent tax be funneled into environmental education, pollution clean-up, and providing reusable bags for SNAP and WIC recipients.”

Therefore, through collective action allowing for government intervention, the negative pollution externalities of plastic bags can be internalized through a market-based solution. 
        As explained by Ronald Coase in “The Problem of Social Cost,” if property rights are well-defined and transaction costs are low, private parties can negotiate and reach efficient outcomes without the need for government intervention. However, in this case, property rights over the use of plastic bags (the right to pollute) are not well defined, and the transaction costs in negotiating compensation for this widespread pollution are high, making a private solution impractical. Therefore, government intervention is needed to manage this externality efficiently. Overall, a tax on plastic bags is an efficient solution, as it internalizes the external costs while creating an economic incentive for both producers and consumers to reduce their plastic bag consumption.

Law School Monopoly: Go Into Debt, Do Not Pass Bar

Over the past two months, I’ve been knee-deep in law school applications. Not only is my brain exhausted from crafting essay after essay, but my wallet has taken a hit too. The Law School Admission Council (LSAC) manages nearly every aspect of the law school admissions process, and its fees are staggering: $250 for the LSAT, $200 just to register for the application cycle, and $45 per school application sent through their system (not counting individual school fees). LSAC has effectively vertically integrated itself into this system, making it a one-stop shop for admissions—and a lucrative one at that.

Though LSAC operates as a nonprofit, it works hand-in-hand with American Bar Association (ABA)-accredited law schools. These schools—conveniently the only ones recognized in the legal profession—are bound by an ABA rule mandating that first-year JD applicants take a “valid and reliable admission test.” Unsurprisingly, the LSAT remains the test of choice, as the ABA discourages alternatives by threatening schools with the loss of accreditation. This creates a closed-loop system where LSAC and ABA-accredited schools maintain control over who gets through the gates of legal education.

If this monopoly on admissions feels frustrating, you’re not alone. Millions of students across the U.S. face the consequences of rent-seeking behavior in higher education. Through lobbying efforts, groups like the ABA extract benefits, like maintaining the LSAT’s dominance, while students bear the costs through increased tuition and fees. This creates a deadweight loss, with fewer resources available for improving education and more funneled into preserving the status quo. For example, the ABA maintains a governmental affairs office specifically for lobbying Congress on issues related to the legal profession. 

If any of you future economists are debating a mid-career switch to the legal profession, here's a sample LSAT question to get you started: 

Correct answer: E

Negative Breakfast Externality

 Earlier in the year we talked about externalities which are byproducts of an action and can be positive or negative. A negative externality occurs when I do something that negatively affects someone and I don't bear any of the costs. I was reminded of this when I was eating breakfast the other day. I like to sleep in so I don't eat breakfast most days but every Tuesday and Thursday I like to eat after class. I like to keep my breakfast simple and I don't like wasting time making a good meal. At the same time I recognize the importance of eating a healthy breakfast so I compromise by eating a mixture of tuna and peanut butter for breakfast with a glass of milk. It has a lot of protein and I'm sure a lot of other nutrients. Many of my housemates do not share my sentiments and often complain about the smell. The smell doesn't really bother me so I'll continue to eat this in the future. Perhaps a coasian solution could be reached if they payed me not it but they'd have to make it worth my while.

The Boot's on the Other Foot: How European Soccer Is Learning From American Socialism

Growing up, I never played soccer because I thought it was un-American. That is a very true story. However, in recent years I've seen the light and now am a proud and anguished supporter of Everton (with their beautiful manager Sean Dyche, pictured at the bottom) in England's Premier League. I love the setup of international football's promotion-relegation, free market approach, where seemingly any team has a chance to win; hypothetically, lowly Swindon Town in the fourth tier of English football could be less than five seasons away from winning the Champions League, Europe's highest title. However, this rarely occurs; in European football, just as in capitalism, the richest clubs win the day. 

The European system differs greatly from any American sports league, even our own Major League Soccer. Major American leagues are set up to ensure the security of their member clubs even through financial woes and poor on-field performances. Even the wealthiest clubs have caps on their spending to ensure a fair competitive distribution (unfortunately for my Minnesota Twins, Major League Baseball is an outlier here). This Wall Street Journal article I read highlights the irony of this: America's strong laissez-faire culture contrasts with the socialist nature of American sports leagues, while Europe's more socialist culture supports a very capitalist soccer system. However, Europe's system slowly appears to be shifting toward a more American approach. Europe's major clubs tinkered with a "Super League" consisted of the top clubs from each major European nation, a move that was nearly unanimously shot down but led to a revised Champions League format that placed more focus on European instead of domestic competition. Recently, the EU's top court ruled that Europe's player transfer rules don't give players enough freedom, opening the door for free agency of sorts. 

The article caught my eye for its relationship to Buchanan & Tullock's Calculus of Consent. Chapter 6 states, "Since no player can anticipate which specific rules might benefit him during a particular play of the game, he can, along with all the other players, attempt to devise a set of rules that will constitute the most interesting game for the average or representative player. It is to the self-interest of each player to do this." American sports have implemented said rules to create a more competitive league, giving every team a chance to compete or game the system. Europe appears to be following their lead. 

Late Night Election Watching: Am I...Irrational?

 I, like many other Americans, found myself up until nearly 4 am on Tuesday night watching the election results. If you asked me why, I would've told you that I felt it was a very important outcome and I wanted to know as soon as I could what was going to happen. I felt like this made sense, and as a result, I was one of the very first people to hear about the election results. The next morning I woke up, and saw many people saying they "woke up to the most ___ news of their life." I leave the blank because obviously, people felt different ways about the outcome, but for many the similarity was they felt the news was extremely important and they woke up to it. In my mind, I wondered why they did not stay up to see if it was so important to them. 

The obvious answer here is that most people are not college students, and most college students do not have their first class on Wednesday at noon (though they should try it sometime). For me, the opportunity cost of staying up was very low, while for them it meant showing up tired to work or class, which can have real consequences. But I was not alone in staying up, given this BBC article titled: Staying up? Here's all you need to know about election night. Many others, like myself, stayed up for the important news. 

I was also honestly bored watching the results come in. It is pretty slow, and they say the same things over and over again. I can not think of any utility that made it worth it to be low on sleep the next day, and miss a little bit of daylight. Was I acting irrationally? Was there more utility to be gained by going to bed early and checking my phone first thing in the morning? Did anyone else stay up late watching it and feel like they were right to do so? For now, I might just have to live with the fact that I may not be perfectly rational. 

The Rational Voter's Dilemma: Avoiding the Hassle

A few weeks ago in class, we posed the question: why do [rational] people vote? Because the expected return of one individual voting to elect one's desired candidate is so low, we concluded that there must be other motives which compel utility maximizing individuals to vote; expressive voting and fulfilling a sense of civic duty are such examples of this phenomenon.

In the midst of all else that was going on during this election cycle, I realized that there was another rational reason to vote, at least in my case. Walking up and down the corner and throughout grounds during the weeks leading up to November 5th, I was accosted on several occasions by random strangers asking me if I had registered to vote. The truth is, I hadn't registered to vote, and was planning to do same day registration (or considering not voting at all). Thus, every time this question was posed, a little bit of negative utility was eating away at me. I did not want to say "Nope" and be asked to fill out some survey or QR code contrivance, but at the same time, I would rather my conscience not be burdened by continuously lying to these campaigners - leaving no positive outcome for this situation. And so, an argument can be made that it would have been rational for me to have registered to vote some time ago, to avoid any hassle from these people. After doing so, I could simply reply "yep" and carry on with my day, not being pursued by the harassment group, and my guilt being assuaged by no longer lying to them. 

By-Product Theory and American Physical Society

 A couple of weeks ago, I had to head down to UNC Charlotte to present on the research I did this summer. Since it was my first time presenting at an APS meeting, I wanted to make sure I had everything in order before I got to Charlotte. So about a week prior I went about registering for the event. To my surprise, the cost of attendance for a non-APS member student was $60 while that for a member student was $15. Student Membership to APS costs $25 annually, so naturally I signed up as a member, and then proceeded to buy the discounted ticket, saving me $20 on cost of attendance. 

Almost every other student I spoke to also signed up on the APS member ticket, which I thought was a really cool example of Olson’s By-Product Theory that we spoke about in class last week. In this case, the primary good being the lower cost of attendance at a conference, and the by-product being APS membership.  

An Athletic Prisoners Dilemma

Over the past few weeks, leading up to our last couple of competitions in the fall season, my rowing boat got substantially faster very quickly. Ironically, over this time, everyone in the boat was both putting more power into their oar and, at the same time, felt like they were exerting themselves less overall. We hadn't done any sort of fitness training over that time, so it would seem odd that both could be true. As one of my teammates pointed out during a meeting after practice, it came down to a prisoner's dilemma. 

As we row, we look for something we call "swing". This refers to the feeling of the boat moving when rowers are in perfect harmony, both in their rhythm and in their exertion. If any rower changes either of these things, that feeling is lost, and the boat both moves slower and feels "heavier," requiring more effort from hardworking athletes to reach the same speed. This is where a prisoner's dilemma comes in. If any one rower starts working harder, things get substantially worse for that person, as it is both very hard to be the one person pulling harder than the others and very easy to be the one person not pulling in a boat of harder-working athletes. However, if everyone simultaneously starts working harder, we can find swing and move the boat faster with less overall effort. Everyone, though, has an incentive not to act, as an athlete previously putting in minimal effort and then making the change will make their expected workload in the boat greater, regardless of the actions of the others. Instead of a fast, light boat, we get a slow boat with no hardworking athletes in which everyone ends up putting in more effort than if they tried to work harder as one. 

This is where my job starts to matter. Although I don't hold an oar, I am the voice in each rower's head encouraging them to do something that, if just one of them chooses not to do, will be extremely difficult and unrewarding for everyone that does it. However, when I can convince everyone to act, we see a pareto-improvement, making the boat faster with no downside to anyone, when compared to a boat with nobody working hard at all. 

Samuel Gregg and minimum differentiation

Our class discussed how a location model can be used to analyze how parties position themselves to acquire a majority. A classic Hotelling finding that Downs analyzes is a minimum differentiation solution between two parties, but do we really see that today?

I'm reading economist Samuel Gregg's book "The Next American Economy." Despite current polarization, he claims both parties have systematically questioned the use of free markets. He thinks conservatives, who once championed free markets, now brand their government intervention as "populist" or "economic nationalist."

Gregg's description shows the two parties are closer to 0.5 in a Hotelling model than what we may think. But this is far from a "democracy works because of minimum polarization" finding: Gregg is concerned that Americans have lost sight of the previous century's free-market enthusiasm.