Dangerous Dogs

Yes, I know what you are thinking, that is poop, specifically dog poop. Why am I posting this horrific picture on the famous econ. Blog? The answer: the negative externality of dogs and their poop. Other individuals’ dogs and their fecal matter have a huge negative impact not only on my life but on society as a whole. Gruber states, “An externality occurs whenever the actions of one party make another party worse or better off, yet the first party neither bears the costs nor receives the benefits of doing so” (Gruber Ch.5). Of course dog owners themselves obtain utility from the ownership of their dog, but there is a cost imposed on society caused by this individual’s ownership of this dog that is not considered in everyday interactions. This cost to society occurs through unscooped dog poop. For instance, walking to class I found this nasty pile of scat (pictured above) outside Monroe and almost face planted after unknowingly stepping in it (talk about a bad day). This dog owner’s “consumption” of their pet reduced my well-being, for which I was not properly compensated, resulting in a market failure. That day, I had to deal with the smell/dirt on my shoes and the overall embarrassment; a large cost imposed on me because of the actions of another. Don’t get me wrong, I love dogs, but the cost on that day greatly out-weighed the small benefit I would have received if I had gotten to pet the stranger’s dog.  

 

Now, it would be nice to find a Coasian solution and be compensated for my troubles, but (no matter how much I wish) I don’t own UVA and therefore can’t claim property rights. If I were to solve this negative externality, I would suggest government intervention. Taxing all dog owners would seem ultimately unfair for the few good owners who pick up their dog’s poop, and it would validate owners to never pick up their pet’s poop because they pay a tax. Regulation seems to be the best option; a fee for not picking up after your pet. The overall damage received from this poopscapade was enough to drive me to discuss this negative externality; however, I did not even mention the environmental factors and health risks society bears from unscooped dog poo.

When Voting Becomes Dangerous

Amid threats of violence from the Taliban, hundreds of polling places in Afghanistan did not open up. A photo was circulating online of a man named Safiullah Safi holding up two fingers: one was dipped in purple ink and the other was missing its tip. The tip of his finger had been cut off by the Taliban for voting in the prior 2014 election. Despite this warning to not vote again, he ended up voting in the election this year. When asked for a justification, he told the reporter, "When it comes to the future of my children and country I will not sit back even if they cut off my whole hand." Was it rational for Mr. Safi to cast his vote, even with the strong possibility of losing a limb?

In lecture, we discussed when it is rational to vote: we vote when the expected marginal benefits are greater than the marginal costs. The expected marginal benefits of voting is the difference in value we derive from our preferred candidate vs. the other candidate, times the probability of our vote being decisive in the election. Of course, the probability of casting the decisive vote is very small. But there is another factor in calculating marginal benefits that is independent of the probability of casting a decisive vote. Let's call this independent factor, D. Thus, it is rational for us to vote when

E[MB] + D > MC

where E[MB] is the expected marginal benefits, and MC is the marginal costs. 

Going back to Mr. Safi, there is no doubt that the threat of violence from the Taliban drastically increases the marginal cost of voting. By going to the polls, he risked losing his hand or even his life. However, Mr. Safi refuses to sit back in the process. Thus, he is voting to express something about himself (think expressive demand). This is independent of the outcome of the election, and is not multiplied by the probability of casting a decisive vote. For Mr. Safi, D is incredibly high. Therefore, although there were high marginal costs associated with voting in Afghanistan, it may be rational for him to vote nonetheless.

NCAA Recruitment Prisoner's Dilemma

CA governor Gavin Newsom recently signed the Fair Pay to Play Act, which will allow collegiate athletes in CA to maintain athletic eligibility while receiving endorsements. This comes after a basketball season in which Duke sensation Zion Williamson generated massive uncompensated value. The NCAA places significant restrictions on player compensation. Some defend this practice as maintaining the student-athlete's integrity, while others are uncomfortable with the athletes foregoing economic rights. It is uncertain how this bill will affect college sports, but there should be more discussion about the other big issue regarding athlete compensation: the prisoner's dilemma in which many colleges have been caught offering illegal incentives to top prospects.

Because schools cannot negotiate a salary with prospects, there is an incentive to attract top high school athletes through under-the-table benefits. Some of the worst examples include coaches hiring escorts for underage prospects and colleges allowing companies like Adidas to pay families to pressure their kids towards Adidas-sponsored teams. Schools recognize a treasure trove to be found in recruiting a superstar athlete. We can model this issue with two schools competing to recruit a unique 5-star athlete to be their centerpiece player, otherwise their best star will be the next best player among the 3-star athletes. In this model, the 5-star player must pick one of the schools. The relevant payoffs involve the expected value of the program's centerpiece player, as well as the costs incurred from bribery (including legal action), which are assumed to be lower than the benefit of having a 5-star player over any other player (less than 1-star).

If neither school offers the player illegal benefits, it will be a toss-up between the schools, with no costs of bribery. The expected payoff will be 4-stars for each school to recognize the toss-up between a 5-star or a 3-star recruit. If one school alone bribes the star, they will have a 5-star player but incur bribery costs while the other school will be left with a 3-star player and no further costs. Lastly, if both teams bribe the athlete, another toss-up will occur, so the expected value for both will be 4-stars minus the costs of bribery. The dominant strategy here is to bribe the athlete, yet the expected payoff for both schools would be higher if neither did so. While legislation is addressing the player's right to their likeness, perhaps it could be used to more robustly police college recruitment. Action to address this prisoner's dilemma could reduce the ills of bribery costs, unfair competition, and exploitation.

Minimax-Regret Strategy for Class Attendance

Going to class is hard. No one really likes doing it, but for some reason many of us college students drag ourselves out of bed every weekday to sit in lecture for what adds up to several hours per day. I'm going to be honest with you all, my first year I skipped class a lot. It was pretty bad. However, my second year and this year so far, I have been really good about attending all my classes. What sparked this change, you may ask? Maturity? Realizing the value of learning? Remembering how much tuition costs? Nope, it was none of those.

Instead, it was fear of maximum regret. Every time I would skip class my first year, I would worry about whether or not my professor was teaching something incredibly important that day that would cause me to do terribly on future assignments/exams if I missed it. While many would say that students should always attend class for many reasons, most students realize pretty quickly that on some days, the material that is taught is very easy to understand and something you could have easily taught yourself, therefore it is not worth it to go to lecture. The problem is that I was and still am unsure as to which lectures will be pointless and which ones will actually be helpful to my learning and understanding the course material, thus giving me anxiety whenever I skipped my first year because I didn't know if I was missing something important or not.

Though I didn't realize it at the time, I ended up conducting a minimax-regret strategy (see chart below), which I still use to this day, to decide how to best curb my worrying. I found that there were four possible scenarios that could occur and assigned a value of regret to each one. Scenario 1) is that I attend class and the professor actually teaches important material, therefore the lecture is important. In this scenario, my regret level would be 0 because by going to class, I would be able to absorb and understand the important material that was taught, so I would have no regrets about attending. Scenario 2) is that I attend class but the lecture ends up being pointless and teaching nothing important. In this case, my regret level would be equal to the cost (C) that I incurred by going to class — this could be waking up early, walking a long distance to the classroom, etc. Scenario 3) is that I skip class and the lecture is pointless, resulting in my regret level being 0 because I didn’t miss anything important by skipping and I did not have to incur the cost of actually going to class. Scenario 4) is that I skip class and the professor teaches something important, therefore lecture is important. Here, my regret level would be equal to the benefit (B) of going to class minus the cost (C) of going to class since I didn’t incur the cost (C) of attending class but I was missing out on the benefit (B) of attending since I missed the important material. Scenario 4) has the maximum level of regret out of all four scenarios because to me, the benefit (B) of going to class when something important is taught is more than double the cost (C) of attending since I want to have good grades way more than I don't want to wake up early or walk to class. Therefore, my priority is to avoid experiencing this maximum level of regret and because I do not know when lecture will be important or pointless, the minimax-regret strategy is to always attend class, hence why I started and have continued to do so since first year.