Rigging Road Trip Dinner Elections: The Quest for Taco Bell

From the days of my youth (~10 years ago) I fondly remember long road trips with my mother and three siblings from North Carolina all the way to Maine to visit my grandparents. These trips, filled with long naps, Mattel Classic Football, and not much else, were punctuated by fiery debates over where we would stop for lunch and dinner on the way.

In retrospect, this decision making process functioned like an election with four voters (myself, my older brother Hank, my younger brother Calvin, and my younger sister Roxane) selecting between candidates for dinner using the Coombs method. When it came time to pick where to eat, my mother, who was also the referee in these elections would pose the question: “What do we want for dinner”? Seeking to minimize our whining when the eventual decision was made, she would eliminate the option she perceived as eliciting the most violent negative reaction until we all appeared to come to a quasi-agreement.

While it’s understandable for my mom to choose a rather simple system for this collective decision(she did also have to maintain focus on the road during these deliberations), she selected one that was ripe for manipulation. Had I done a bit more public choice reading in elementary school, I could have easily influenced the outcome through strategic behavior.

My first choice of roadside cuisine was, naturally, Taco Bell. My siblings generally had varying preferences, though two of them found Taco Bell particularly repulsive. Illustrated below are our ranked candidates:

Nate	Hank	Calvin	Roxane
Taco Bell	Wendy's	Burger King	Wendy's
Wendy's	McDonald’s	McDonald’s	McDonald’s
McDonald’s	Burger King	Taco Bell	Burger King
Burger King	Taco Bell	Wendy’s	Taco Bell

In this scenario, through the Coombs method in a well moderated, fair election, Taco Bell was eliminated in the first round, sticking me with an inferior meal. In retrospect, had I proposed two options at a time, I could have eliminated the opposition, one at a time, and used my brother Calvin’s mild affinity for cheap tacos to reach the promised land.

By striking first and proposing a choice between Burger King and McDonald’s I could eliminate my brother Calvin’s first choice of Burger King.

Nate	Hank	Calvin	Roxane
TB	Wendy’s	McD	Wendy’s
Wendy’s	McD	TB	McD
McD	TB	Wendy's	TB

Then, by proposing a choice between Wendy’s and McDonalds, I could similarly eliminate McDonalds from the ballot, leaving the choice between Wendy’s and Taco Bell. At that point, by whining slightly louder than my siblings(falsifying my preferences) I could tip the 50/50 voter split, and take victory.

Nate	Hank	Calvin	Roxane
TB	Wendy's	TB	Wendy's
Wendy's	TB	Wendy's	TB

My mother, in her infinite wisdom, eventually learned to skip this process and take us to a food court.

I Pay Economic Rent to JPJ... Do You?

Well ladies and gents, it's that time of year again. Time to dust off your student ticket account and watch your email like a hawk. It's common knowledge that student tickets for men's basketball games are allocated through a lottery. If you request your tickets during the designated window, you have the chance of winning a FREE seat in JPJ watching one of the country's best college basketball teams. But, as Charlottesville native David John Marotta of Forbes would say, we're actually paying a hefty economic rent for these "free" tickets.

In my own personal experience (as only one of thousands of UVA students who are requesting these tickets), the process is anything but simple. The ticket must be requested in a specific window of time, meaning that one has to constantly be on the lookout for emails listing these all-important ticket request windows. The process of requesting a ticket takes no more than five minutes, but think about the thousands of students requesting at once. Even if only 1,000 out of the 16,000 students at this school request a ticket for a given game, 5,000 minutes are being spent in rent-seeking activities!

After the request comes the result of the lottery: either the moment of joy when a ticket is granted or the dreaded moment of dismay when one is not. However, hope is not lost because a couple of days before the game comes another sweet spot to try to request a ticket. This marks the beginning of a fascinating phenomenon through which some foolish souls attempt to return their basketball tickets while others are hungrily waiting to scoop them up. Of course, this entire process depends on sheer luck. The first person to press the request button after a ticket is returned receives the ticket. Some ticket holders will attempt to electronically return their tickets and have a friend request the ticket a split second later in hopes of transferring this ticket to their friend. Unfortunately, their friend is undoubtedly not the only student waiting on the other end of the line, as many students are willing to spend at least 30 minutes clicking the ticket request button over and over again to poach said tickets (I know this from personal experience). Here we have yet another added level of rent-seeking in terms of time spent by both ticket-returners and ticket seekers, adding hundreds if not thousands of minutes to the amount of time spent seeking said tickets.

No matter how fascinating it is to be present at a Virginia basketball game, think twice about the cost of requesting your ticket next time you do so--as well as what this means in terms of the collective rent paid by the student body. Given the amount of rent we are all going to pay to the men's basketball team, let's hope we gain utility from some WINS this year!

Voting Systems and the End of the Weimar Republic

As an avid student of history, one of my favorite topics to investigate has been the rise and fall of the Weimar Republic: the democratic regime which historically sits between Imperial Germany and the Nazi regime. An easy misconception is the notion that Hitler was popularly elected or that he forcibly seized power in the country - neither of which are true. Through using a public choice approach, it is possible to determine that Hitler wasn't inevitable, at least in regard to the 1932 German Presidential election, even as the rules of the game allowed him to ascend to the chancellorship the same year. 

Looking over the results of the 1932 German Presidential Election, it is apparent that the Weimar Republic used a majority-rule rather than plurality-rule electoral system to choose the President, as Hindenburg won only after the run-off election because it was then that he attained over 50% of the vote. Furthermore, the election results highlights the increasing polarization in the Weimar Republic. Hindenburg, despite being the incumbent president and a staunch conservative, was not the candidate from the conservative party during the election - it was actually Duesterberg from the DNVP. The other candidates were Thalmann of the Communist Party and Hitler of the Nazi Party. This reveals that, under the median voter theorem, the median voter candidates sought to appeal to was starting to tend towards the extremes, reflective of the political environment in Weimar Germany at the time. This polarization is especially apparent given the lack of candidate presented by the Social Democrats (SPD), who were traditionally the moderate liberal party in Weimar Germany. Furthermore, it is clear that Hindenburg was the Condorcet winner of the 1932 German Presidential Election. This is because if one were to place the various candidates of this election along the political spectrum, they would, from far-left to far-right, be Thalmann (Communist Party), Hindenburg (incumbent/Independent), Duesterberg (Conservatives), and Hitler (Nazi). Given this setup, and the fact that we have previously deduced that the median voter leaned strongly to the right, Hindenburg would defeat each of Thalmann, Duesterberg, and Hitler in pairwise elections. Against Thalmann, Hindenburg would absorb Duesterberg and Hitler's vote shares and reach 86.8% of the vote; against Duesterberg, Hindenberg would absorb Thalmann's vote share and reach 62.8% of the vote; against Hitler, Hindenburg would absorb Thalmann's vote share and some of Duesterberg's, which is what happened in reality during the runoff election, and thus win with roughly 65% of the vote. As such, the 1932 German Presidential Election avoided the Condorcet Paradox and managed to produce the Condorcet winner.

Despite the presidential election producing a Condorcet winner in the form of Hindenburg, Hitler still managed to take power through the chancellorship less than a year later, because of the manner in which the parliamentary system of the Weimar Republic was constructed. While it would be equally fascinating to investigate the 1932 Federal Election through the application of the median voter theorem and Downs' understanding of modality in multiparty systems, such an investigation is probably best suited to a future blog post, where it can be appropriately dealt with.

The Externalities of PED Use

After reading a recent article about the "steroid era" in baseball, I had a discussion with my roommates about the use and regulation of performance enhancing drugs in sports. One argument that came up was that the use of steroids and PED's should not be regulated in professional sports since they generally create increased scoring and more entertaining games. Since professional sports are really just an entertainment platform, wouldn't more scoring and more athletic players be good for the leagues? As someone who finds baseball painfully boring to watch on TV, I thought about this idea a lot over the next couple days, dreaming of a home run packed MLB. After our class the following week, it hit me why leagues should regulate the use of performance enhancing drugs; they create negative consumption externalities on other players.

If a linebacker in the NFL begins using PED's they will get bigger, faster, and stronger. This means that the offensive players on the other teams will now be getting hit by a player that is more likely to injure them than if he had not taken any performance enhancers. These players are now taking harder hits that put them at an increased risk of injury due to a decision that they played no part in. They are a third party to the transaction between the player who is juicing and his doctor providing the drugs, but they are being negatively affected by the player's consumption of the drugs. Other externalities may also occur due to steroid and PED use in sports. Players using steroids or other PED's may force others to do so as well to stay competitive. The players would be forced to put their health at risk in order to maintain a spot on their team. PED use could also result in clean players earning less than they would if drug testing occurred since PED use would allow those players to perform at an artificially high level and therefore earn a higher share of the salary cap, forcing others to make less.

I believe the externality argument provides the most compelling reason for regulation of substance use in Professional sports. The leagues act as a government in these scenarios and impose fines and other penalties on those who create the externalities in order to make sure the parties responsible are bearing the costs.

Hoo’s Driving, Hoo’s Free-Riding?

A few weeks ago, I took a trip to New York. I planned on catching a carpool to DC with the Hoo’s Riding Facebook group previously discussed in Sano’s amazing blog post, and transferring to a bus to NYC. On the day in question I got in the car and realized I only had 3.5 hours until my bus was scheduled to depart. This posed a problem for me, given that it generally takes about that long to get from Charlottesville to DC to the bus station. It looked like we would be cutting it close.

Early in the trip, I realized the driver was also under a time constraint: she was trying to catch a flight out of DCA. Because she was also trying to make a connection, she took liberties with the speed limit — consistently breaking it by about 10 MPH. Sitting in the passenger seat, I realized that I benefited from her speeding. Importantly, this choice was not costless for her. Route 29 is notoriously treacherous for speeders, and she was running the risk of getting pulled over and incurring a costly ticket (the probability of which increases with each MPH over the speed limit). On the other hand, I as a passenger was not liable. Because the speed at which she chose to travel applied to both of us, it was in some way a public good — one I was free-riding off of (literally). Because of this free-riding problem, there is the potential that the speed we traveled was not the efficient level.

MPH over limit	MB Driver	MB Passenger	SMB	MC
5	100	75	175	25
10	75	50	125	50
15	50	25	75	75
20	25	0	25	100

Take for example the table above. Assume decreasing returns to speed, so that each MPH over the speed limit increases the probability of making a connection on time, but we derive no benefit from arriving earlier than is necessary. Also assume the marginal costs are a function of the expected value of a lump-sum speeding ticket (i.e. the value of the penalty doesn’t vary with speed), given the probability of getting a ticket increases as speed increases. If these costs are borne only by the driver, the travel speed will be below the allocatively efficient level of 15 MPH over the speed limit. We could have easily moved to the allocatively efficient level if I had offered to pay her for each MPH she went over the speed limit, but I was more than happy to simply free ride off of her speeding, rather than contribute my fair share. On the other hand, if she was in the mood for a leisurely drive, and only I had been in a hurry, I would have been far more inclined to offer her money to speed, rather than be stuck with her low speed.

Beans on Faces and Voting Currency

In S6E3 of The Office, "The Promotion", co-managers Jim and Michael are faced with a dilemma of constrained resources and unlimited desire, a textbook economic conundrum. A corporate executive calls the pair with unfortunate news that Dunder Mifflin has a smaller budget for staff raises than previous years. The two must then decide whether to give a flat 1.5% raise to each employee or somehow divide up raises by department. They eventually decide on merit-based raises, chosen through voting currency. Jim and Michael printed pictures of each employee and took turns placing beans on their faces; each bean represented a 0.5% raise and each boss had 24 beans to place.

This system seemed to resolve tension between the co-managers but incited outrage when the employees found out how their raises were being handled. This episode provoked me to think about the utility of voting currency in the United States voting system. In this case, it didn't work because few people were voting to decide the fate of many, rather than vice versa. But if consumer voters were each endowed with, say, 10 voting dollars, would this succeed? By "succeed" I mean, would this voting system (1) choose the Condorcet winner, (2) minimize incentives for strategic behavior, and (3) make use of ordering information.

These are three positive characteristics of voting systems; if a system satisfies all three, I would consider it successful. This system entails ranking, so the third criterion is fulfilled, but the other two require more analysis. Voting currency can yield a Condorcet winner by empowering voters to express preferences in terms of capital rather than going "all-in" on one candidate. However, this could have adverse effects if voters try to strategize votes to eliminate a candidate. The voting system in the U.S. is clearly broken, but that does not mean our reform should emulate methods used in The Office. This might yield a lot of office supplies trapped in Jell-O.

A Theory of Campus Fellowships

When I first came to UVA, I was surprised by the number of various Christian groups on Grounds. I remember being bombarded by flyers, events, and people that all wanted to introduce me to their respective fellowship. There was Chi Alpha, Cru, InterVarsity, Grace Christian Fellowship, Asian InterVarsity, RUF, the list goes on…

This reminded me of Tiebout’s theory of local expenditures, which says that the consumer-voter can be seen as picking a community that best satisfies preferences for public goods given set revenue-expenditure patterns under some certain assumptions. To describe some of the more relevant assumptions we can make that are similar to his model, you could say that students interested in joining a Christian fellowship at UVA have full mobility as the cost of moving from one fellowship to another can be trivial, although there are potential search costs and “startup” costs associated with looking for a different fellowship to join and making new friends, these costs are usually not considered to be very high when you are first entering college. Furthermore, there are many choices as described earlier. You can also argue that each fellowship has its own optimal size, whether it due to the capacity of the staff, buildings that they use, or ministries that they serve in. As a result, students at UVA might look to see which fellowships offer the type of services and experiences that they want, and decide based upon that. This is not limited to Christian fellowships at UVA; this article describes a scenario in which a consumer-voter came to one specific church on weeks they offered snow cones and another on the other weeks. 

In reality, this isn’t a perfect analogy. Students don’t have full knowledge of the “revenue-expenditure patterns” of the different communities, and most would probably argue that such a view on choosing a fellowship is very consumerist and contrary to their beliefs about church, as discussed later in the same article. However, this is a pattern that can still be observed, not only among people choosing a fellowship or church, but also a sorority/fraternity, cultural organization, or the like.

The Rationally Ignorant Carnivore

Several of my friends have started to become vegetarians.  I don't like that.  How are we supposed to share the majesty of a Caniac Combo from Raising Cane's or a Burger at Boylan if you don't eat meat?  I happen to love my carnivorous lifestyle and refuse to change even when my friends try to present me with information about how being a vegetarian "saves the planet" or is "healthier."  I used to respond to these attempts with the following true statement: "Every once in a while I watch PETA propaganda to make sure I still feel alright eating meat, and if that hasn't convinced me you won't either."  That sounds aggressive, but my friends bring this up a lot.  After taking this class, I realized that I don't need that defense anymore, I have a better one: rational ignorance.

Let's assume that my friends are right and that if we stopped raising animals for food altogether we would "save the planet," which is a stretch.  Well then, great, everyone should learn about this and stop eating meat.  But there's a problem.  The impact that any one person's decision to stop eating meat has on total meat production, and thus on the environment, is negligible at best and likely just zero (probably even smaller than their chance of changing the outcome of an election).  So the social marginal benefit of that decision is zero.  Now let's look at the costs, in searching out the information that will convince them to go vegetarian the individual incurs opportunity costs of time better spent doing anything else.  But let's say you don't have a lot to do and that cost is basically nothing too.  You read all the articles you can find and you feel a moral obligation to stop eating meat.  You now have two options: actually stop or don't.  If you don't stop eating meat, you will still have the weight of that information on your mind making it more costly to you to eat meat.  Even if you do stop eating meat the costs of your diet have increased because you naturally prefer meat to no meat (otherwise you would have already made that decision).  So basically there are no benefits to society from seeking out information regarding the effects of meat consumption on the environment and potentially high costs, even under the most favorable assumptions to our vegetarian friends.  The only way this wouldn't be the case is if a new vegetarian gets very high benefits from telling people about their vegetarianism (but talk about a negative externality).  All this means that it's rational for a meat eater to not seek out pro-vegetarian information that might turn them to the dark side.

Memorial to Enslaved Laborers as a Public Good

If you walk from from the Rotunda to the Corner, you might notice the small, red flags that dot the grassy slope to your left. These flags mark the area where the Memorial to Enslaved Laborers (MEL) will be built, a ring of Virginia granite inscribed with the names of 1,000 of the more than 5,000 enslaved laborers who lived and worked at the University from 1817 until the end of the Civil War.  Memorials like this one are examples of public goods, which have two defining characteristics: they are nonrival, so my consumption of the good doesn’t affect anyone else’s consumption, and nonexcludable, so I can’t deny you access to the good.* The latter characteristic is what makes public goods difficult for the market to provide—free riders have the incentive to consume the good without paying for it.

We see the free rider problem at work even here, with MEL. For reasons not entirely clear to me, the construction of the memorial will be incredibly expensive. The University recently announced a $2.5 million matching fund to raise money for project. The creation of the matching fund suggests to me that private donations were not enough to pay for the project, compelling the University to step in and close the gap. Donors recognize that their decision to contribute will not affect whether they can consume the memorial: On one level, the donors know that the memorial will eventually be built with or without their donation; the University has already publicly committed to the memorial, and going back on that promise would be a PR nightmare, not to mention an injustice to the thousands of men and women whose labor deserves to be recognized. On another level, once the memorial is built, donors' ability to see and experience the memorial will not be contingent on whether or not they donated. Given this non-excludability, potential donors would rather free ride than contribute to the construction fund. If you would like to avoid being a free rider, you can donate to MEL here!

Courtesy Höweler + Yoon Architecture LLP, found at http://www.virginia.edu/slaverymemorial/design.html

*Most “public goods” are really impure public goods, since they technically could become rivalrous or excludable at some point. If a crowd of 800 people surrounds the memorial, their consumption obviously impacts my own, and if the University really wanted to, they could build a wall around the memorial and charge for admission. Because these scenarios seem unlikely, we can fairly discuss MEL as an example of a (mostly) public good.