Costs of a Country Music Constitution

Over fall break two friends and I went to Nashville. With only four nights to explore Broadway, we wanted to maximize our time and explore a new place every night. Each person had different preferences about where to go, so we decided to let each person decide one night and leave the extra night flexible. At the time, we did not realize how extreme this decision rule was, as one person held all the power to decide our plans for the night. 

On my night I decided to bring the group to Luke Bryan’s, as he’s my favorite country singer. After waiting in the crowded line for forty minutes, my friends started to complain. A large external cost was being imposed on them. I thought about giving up on the line, but I thought through how high our decision-making costs now were. By abandoning the one-person decision rule, all three of us would now have to come to a consensus which could be an even bigger waste of time. To be honest, I also really wanted a picture inside Luke Bryan’s. People may call me stubborn, but I decided not to budge. After another ten minutes we finally got in! Looking back, our decision rule definitely did not minimize total costs. I’m sure my friends would’ve preferred a simple majority at that moment so they could override my decision.

The Lambeth 4593 Constitution

My apartment is in rough shape. Dishes fill up the sink, ginger ale cans take refuge on tables, and junk litters every corner of the living room. My three roommates and I epitomize the free rider problem -- we have very little incentive to clean up after ourselves when we can just bank on our brethren to do so for us. 

Starting this week, however, we free ride no longer. Over the break, trying to solve this problem and create a genius blog entry for my public choice economics class, I created the Lambeth 4593 Constitution. This clearly sets up the rules of the game for our apartment. While passage requires unanimity, our group of four members with similar preferences should have no time signing this into law. With three main chores to do (dishes, cleaning, and taking out trash), each roommate has a smaller yet clearly delineated responsibility with the added bonus of a break every four weeks. If they're slammed with exams or just don't want to do their role in a given week, they are free to trade or pay someone to take their responsibility, creating a market for each chore. Essentially, they can buy the right to free ride. And to disincentivize violating the constitution, a wannabe free rider faces a punishment decided by the three other members. 

Justin Verlander Hates the Borda Count (probably)

     Justin Verlander is one of baseball’s greatest all time pitchers— currently 41 years old and still pitching, he is one of the only active MLB players that is essentially guaranteed a spot in the Baseball Hall of Fame. Shockingly enough, he has never made a sociopolitical commentary on the theory of the Borda Count. If he were to, however, I think he would be able to point out some of its major flaws.

    In 2016 Verlander had an amazing year and was the prime candidate to win the American League Cy Young award, given to the most outstanding pitcher in a season. The award is decided by the Baseball Writers’ Association of America, where 30 writers pencil in their votes by way of the Borda Count. When the award was announced after the 2016 season, Verlander received the most first place votes (46%), and somehow lost. Two of the writers had completely left Verlander off of their ballot, resulting in Verlander losing by only 5 points (137-132), the closest race since 1970.

    This race exemplifies the prime flaw of the Borda Count which Mueller discusses; strategic voting. While Verlander was not unanimously the best pitcher in 2016, he objectively was a top 5 pitcher in the league. Knowing this, a writer who strongly wants somebody else to win the award would be incentivized to leave Verlander off their vote entirely even if it does not represent their true preferences. 

Borda saves movie night!

For the past couple weeks my friends and I have been trying to find a time for movie night, now that the weather is getting slightly colder. The issue is we can’t seem to settle on which movie to watch. I want to watch La La Land, someone else wants to watch Tron, a third wants to watch Twilight and so on. We'd been labouring over this decision for a few weeks, bickering over which would be more fun to watch, and it looked set to fall apart if we couldn't decide on a film soon.

Remembering that groups of individuals can display intransitive preferences, I thought this may be a good chance to try out one of the voting methods we learnt in class. I used this google form to set up a rank-choice voting procedure (may have accidentally included an extra column, so disregard column 5). I decided on the winner using the Borda Count Method, with each first place vote being worth 4 points, second place votes being worth 3 points and so on.

Under the Borda method, the winner was (drumroll)... La La Land!

Controlling the Agenda

This morning, I met up with two friends to go on a hike. It was a perfect day to spend outdoors, and we only had one issue–which hike to choose. The three options we had to choose from were Sharp Top, Devil’s Marbleyard, and Flat Top. Each of us preferred a hike different from the other, so I came up with a brilliant solution: we would all rank our preferences and then use a Borda count to determine the winner (note this is the point in the decision-making process when your non-Econ friends will call you weird). Below are our hike preferences, which I had to write on a napkin. 

Much to my dismay, I realized that in our situation a Borda count would not yield a Condorcet winner since one did not exist; we had intransitive preferences and a Condorcet paradox on our hands. We had three options, and all ranked them differently due to various reasons like length, difficulty and views. However, I quickly realized that with the power of agenda setting I could manipulate the outcome of the situation. Luckily enough, my friends were honest, and I did not have to worry about preference revelation. Since I knew that my 2nd choice would beat my 3rd choice, and my 1st choice would beat my 2nd choice, I set up two pairwise votes in that order. Using my knowledge of Economics, I was able to control the outcome and end up with my 1st choice hike, Sharp Top (which really was the best option). 

A Coxswain's Conundrum

In my position in rowing, that of a coxswain, athlete selection can be particularly difficult due to a lack of hard data about an individual coxswain's skill. To select our coxswains, we use a system of ranked choice voting nearly identical to that of the Commonwealth of Virginia, at least within each boat. Beginning with our fastest boat, rowers rank their preferences for their coxswains. Usually, a coxswain achieves a majority of votes but, if they do not, the coxswain with the fewest first or, sometimes, first and second place votes is eliminated, their votes are redistributed, and the votes are counted again, continuing until someone has a majority. Then, we move on to the next boat and do the same with the remaining coxswains, until each boat has selected a coxswain.

This system leads to a unique problem. The presence of many boats and, thus, many different ranked choice elections creates an incentive for coxswains to focus on winning over a majority of athletes in just one boat, rather than developing their overall skills and ability to work better with everyone on the team. Worsening this problem is the fact that boats tends to be made up of similar "types" of rowers with similar personalities who who work well together. If a group of five athletes (in a boat of eight) have a unique preference for, say, a particularly intense coxswain, they may be the only five rowers on the team to rank that coxswain highly, but that coxswain may gain an opportunity to race over others with more broad appeal. Then, when that coxswain has to practice or race with others down the line, they are less effective in doing so, as they've only really developed one part of their ability for the opportunity to race earlier on. 

I have proposed that, to limit this issue, we still select our coxswains with a ranked choice vote, but whether a coxswain races at all is decided by a vote that includes the entire team. Then, we should give each crew a choice on who from that pool they want in their boat, removing the incentive for coxswains to appeal to a narrow group for the opportunity to race in the first place. Thus, we would instead be incentivizing coxswains to work well with all rowers for the opportunity to race, and allow them to race with those who they work with best.

Curb Your Rationality

    I recently came across a clip from Larry David’s show Curb Your Enthusiasm. In the clip, Larry is waiting in line at the polls to vote for his friend, and makes a deal with another voter so neither of them have to wait in the line. They recognize that since they’re voting for opposing candidates, their votes cancel each other out. They make a deal to leave, allowing both individuals to essentially cast their votes without waiting in line. Later in the clip, Larry’s friend discovers he lost the election by one vote.

    The clip brings up a few things we’ve read and talked about in class; the cost of voting, social pressures, and the idea of trading votes being the main ones. The cost of voting is the cause of the video— two people recognize that waiting in line sucks, and they’d rather be elsewhere. Social pressures are present when Larry’s friends are mad at him for his decision, and the idea of trading votes by symmetrical abstention is clearly apparent. The irony in the clip is that even if the other voter were to return and vote, the probability of that one vote making a difference is statistically insignificant, except of course in the irrational world of Larry David. 

What To Do with the WASH

The WASH, a speech and debate club at UVA, is a club good. At meetings, one’s utility depends on how many people are in the hall. The optimal point is when there are enough people that meetings are lively, and enough room that everyone can sit comfortably. 

Each semester, the WASH accepts a new class of provies (provisional members), who must complete a set of requirements to become official members: one debate, one literary presentation, etc. This semester there are 113 provies, and this comes with negative externalities: less opportunity for member participation, increased congestion in the hall, which lead to decreased individual utility. 

The WASH can increase the marginal costs of joining by increasing provie requirements. Provies could stay till the end of 3 meetings instead of 1, complete more acts of service, attend more meetings, etc. The WASH could host 2 meetings a week, but marginal cost would increase as meetings are long and the hall has to be reserved/paid. They could set time limits on literary presentations. Overall, the WASH needs to find a balance between marginal benefit of new membership with the marginal cost of crowding.

Breaking the Law for the Right Price

I was rushing to class as the time ticked down before my astronomy exam. I knew that I had to gain some time to arrive when the exam was supposed to start. As I hastily made my way up Stadium Road, I glanced both ways and seeing a car coming quickly towards me, I made a split second decision: cross the street. In a rush, I jaywalked, forcing the car to slow down to accommodate me as I jogged across the two lanes to the other side of the road. This interaction, along with many other similar ones at UVA, presents a prisoner’s dilemma. A prisoner’s dilemma occurs when two parties, unable to communicate, must choose between cooperation and self-interest, where the optimal choice depends on the decisions of others. These situations often present a dominant strategy. A dominant strategy is when there is an optimal choice regardless of others’ decisions. In the presence of an incoming car on the road, we are presented with two options given our time constraints: one, cross the street in front of the car, or two, wait for it to pass, losing those few crucial seconds.

In this dilemma, the dominant strategy is to cross the road in front of the car. This choice will resolve in one of two ways: either the car slows and you cross at your convenience, or the car hits you. Any court is likely to hold the driver accountable, because jaywalking is illegal in most states, while hitting a pedestrian is illegal everywhere. Furthermore, the mitigation of damage doctrine prevents a party from receiving damages that could have been avoided. Unless the pedestrian was grossly-negligent and could have avoided being hit, the court will often side with the 150lb pedestrian over the 3,000lb motor vehicle in a collision. In both situations, the pedestrian wins, making this a prisoner's dilemma.

All My Homies Hate Rock Paper Scissors

I am firmly in the camp that all petty arguments can and should be decided by rock-paper-scissors. With essentially 50/50 odds of winning, arguments can easily be resolved within seconds. While doing a quick google search about the game, I learned there is some interesting game theory associated with rock paper scissors as well. Because of the nature of the game, there is no dominant strategy for any player, meaning there is no Nash Equilibrium because of its cyclicality.

But why does rock paper scissors work so well? Interestingly, it is because of its intransitive nature. Rock beats scissors, scissors beats paper, and paper beats rock. If you each play the same hand, it is a tie, and you play again. In simple terms, A>B, B>C, and C>A. Imagine if this wasn't the case. What if Scissors beat paper and rock? That would mean A>B and A>C. Therefore, any rational person would choose scissors against their opponent, ruining the game. Contrary to what we talked about with the irrationality of intransitivity in class, the ONLY reason why rock paper scissors is a viable game to solve problems is because of its intransitivity, and although it may not be rational in an economic sense, in my opinion its "irrationality" makes it perfect.

Hurricane Helene: Government Insurance in Action

We might be quick to complain about the non-stop rain we've had in Charlottesville recently, but we are fortunate to have been spared from much of the devastating effects of Hurricane Helene. Analysts have estimated the combined insurance losses to reach $6.4 billion, but this number pales in comparison to the total damage estimated between $30-$160 billion. The system of government redistribution was quickly enacted, as North Carolina and other affected states were quick to invoke major disaster declarations that allow affected residents to apply for grants to reimburse hurricane-related uninsured losses under FEMA's Individual Assistance Program. Such a program also represents a commitment problem for the government, since it would be unreasonable to stop inefficient hurricane relief bailouts. 

A related issue is the recent trend of insurance companies pulling out of Florida and other regions highly susceptible to hurricanes. These companies have cited a disproportionate amount of litigation and hurricane-related property destruction that drive up their costs. The issue of adverse selection is likely at play, especially if property owners outside of well-established hurricane zones purchased insurance while withholding knowledge about the potential for severe hurricane-related damages.  

Riding with Academic Free Riders

In my econometrics class, a huge portion of our grade is decided by a group project in which we write an academic paper about something in the real world that is of interest to us, with the goal of applying econometric methods to the real world. This process, thus far, has been extremely rewarding but, a couple of weeks ago, as we approached our first deadline, it became clear just how much of a problem academic free riding would be. 

The night of our first deadline, when we needed to submit an annotated bibliography containing analysis of the literature that we would be building off of, three of our five group members were missing in action. They had not made any changes to our shared document and, apart from one who later joined (albeit in a very limited fashion), they did not even respond to our messages asking for their completed work for our submission. Eventually, two of us completed the assignment and we received a perfect score, which was given to all group members, including those who did little or no work. In short, those group members were acting as academic free riders.

While there are several proposed solutions to this issue, I would advocate for a percentage of each group member's grade to be decided via peer grading. That way, group members could levy a penalty on those who free ride (a lower grade), which would hopefully be enough to disincentivize free riding. Until then, though, I may be forced, as my incentive to score well is higher than my incentive to free ride, to, along with one of my peers, continue to do more than our fair share of the work for this project.

Speaker Knows Best: Condorcet's Irrational, Unstable, and Intransitive Paradox

Condorcet's paradox occurs when a group of individuals with transitive preferences (where A is preferred to B, and B to C) can collectively display intransitive preferences under majority rule (where A is preferred to B, B to C, but C is preferred to A). This leads to cycling or an indeterminate outcome. In settings where all votes carry equal weight, like Congress, Condorcet’s paradox becomes nearly impossible to resolve. However, the Speaker of the House plays a crucial role in preventing this.

With their agenda-setting power, the Speaker can break this cycle by determining which issues are voted on and when. This gives the Speaker a disproportionate influence compared to the rest of the members, allowing their preferences to guide policy and eliminate the indecisiveness caused by cycling.

For instance, imagine three parties represented in Congress by individuals with different policy priorities:

Jefferies: Healthcare Reform, Tax Credits, Environment

Greene: Business Tax Credits, Environment, Healthcare Reform

Bernie: Environment, Healthcare, Tax Credits

If Mike Johnson, the current Speaker of the House and a Republican, sets Business Tax Credits as the first agenda item, the Republicans could then form a coalition with Democrats, who might prefer passing the tax credits over working with Bernie to prioritize environmental legislation. By exercising agenda control, the Speaker makes Congress more productive, allowing it to move forward on issues rather than being bogged down by endless cycling. Here, it is demonstrated that the agenda setter is vital for overcoming the decision-making gridlock caused by Condorcet’s paradox.

Condorcet's Paradox- What can we do about it?

My curiosity prompted me to open the recruiting-related files in the folder when I was interning at a firm this summer. My conclusion after briefly looking at the documents was that it was not easy to choose among a group of well-educated and experienced candidates. Though I do not remember the exact details of the comments on candidates, I did remember seeing some cycling, controversial opinions. Something like, person A prefers Candidate X over Y, and Y over Z (X > Y > Z, person B prefers Candidate Y over Z, and Z over X (Y > Z > X), and person C prefers Candidate Z over X, and X over Y (Z > X > Y). I didn't understand why it took months for them to find the candidate that everyone likes and now it seems this has something to do with Condorcet's paradox.

I also see another slightly different document, that asks the people to rate the candidates from 1-10. So does simply adding a rating scale solve the Condorcet's paradox? Borda Count helps explain it. It is a rank-based voting system where each decision-maker ranks the options, and points are assigned based on their rankings. The candidate with the highest total score wins. For example, if person A ranks X > Y > Z, X gets 3 points, Y gets 2, and Z gets. This process is repeated for each manager, and the points are summed.

Even though Borda Count is not applicable to voting for obvious reasons, it is at least something that we can do to mitigate the effects of Condorcet's paradox.

The Year of Jubilee

Every fifty years, the ancient Israelites would celebrate the Year of Jubilee as outlined in Leviticus 25 in the Bible. This is a year when debts were forgiven, slaves were set free, the poor were cared for, and property was returned to its original owner. Although God gave Israel land as a gift in the Old Testament, he still retained full ownership and control, making their ownership temporary. This tradition symbolized what life with God looks like–how nothing is entirely man’s alone but bestowed by God in the covenantal relationship he made with his people.

This decree can simply be thought of as divinely-bestowed public insurance. As Mueller outlines in Public Choice III, it parallels modern redistribution programs that encourage communal support. In the presence of uncertainty, the Israelites committed to caring for one another by pooling resources at the risk of their future comfort. In a sense, God formed a natural monopoly through shared goods that were under His ultimate control. In uncertainty, any individual can be rational and selfish and still agree to redistribution of goods. For the Israelites, they agreed to this out of a mix of fear and devotion to God, but they still end up being better off because of it. When everyone contributes, each person ends up equally better off without hurting anyone else, meaning they are in a Pareto-efficient allocation.

Scott Stadium's Hill: No Longer a Public Good?

While I’m not a big college football fan, the one non-UVA game I will watch every year is Alabama-Georgia. I have no connection to either team, nor to those schools, though I think what forces me to tune in each season is the spectacle surrounding the game. This past weekend was no different. TV coverage showed hordes of fans outside the stadium hours before kickoff, and the 100k seats in Bryant-Denny were all sold out. Watching those scenes reminded me of our very own Scott Stadium, and the beloved student hill. 

For most of UVA’s student population, it used to be a prime example of a true ‘public good’. Non-excludable (for students) and non-rival (if anything, it gets better with more people there). This season, however, that is no longer true. Staff at Scott Stadium have placed a cap on the number of Students allowed on the hill. Additionally, the only time students can access the hill is at the very start of the game- barring latecomers from accessing it, and preventing students from going freely in-and-out of the hill. As a result, it has ceased to be a public good for university students, but has become something of a club good, with access determined by how early one gets there. Ever since this change, hill attendance has plummeted- especially in the latter quarters, and the energy in Scott Stadium has suffered as a result, prompting widespread backlash from the student body.