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.