Supreme Court Nominations and "The Nuclear Option"

   President Trump is on track to appoint his third Supreme Court Justice this term, the most in a single term since President Nixon. In the current nomination process of Judge Amy Coney Barrett, the Republican Senate Majority has 53 members. This is more than enough to pass the current threshold of 50 votes with Vice President Pence to break the tie. However, this was not always the case. Prior to Justice Gorsuch's nomination, 60 votes were required for a Supreme Court Justice to be nominated. However, due to the inability to get Gorsuch nominated successfully under this rule, Senate Majority Leader Mitch McConnell invoked the so-called "Nuclear Option", lowering the threshold to the current rule, 51 or 50 plus Vice President. 

  It's pretty clear why McConnell changed the rule but did changing the rule really make sense? Based on Buchanan's A Generalized Economic Theory of Constitutions, nothing really changed in the average confirmation process. The external cost and decision-making cost curves have not shifted, yet the rule changed anyway. This moves away from the assumed optimum at 60 votes to this point of higher expected costs at 50 votes. While this short-run solution increases Republican's utility and decreases their personal decision-making costs, in the future the rule will also apply to them, resulting in higher-than-necessary external costs. However, given the fact that the Supreme Court has lifelong appointments, this payoff may actually outweigh the long-run higher costs, given that the rules may change in the future due to the Supreme Court's power of judicial review.

Rational Abstention and Irrational Lawn Signs

 If you drive around Charlottesville during election season, you'll see a bevy of political campaign lawn signs posted in the yards of city residents. Forty years ago, this might not have been the case -- according to one study, use of lawn signs quadrupled between 1984 and 2012. According to the Washington Post, this is because campaign managers like to feel as if they're making an impact, and political candidates like to feel like they're winning. Regardless of this small consumption externality of an ego boost, how much do lawn signs actually increase your chance of winning an election?

Again via the Washington post, the positive impact of lawn signs is negligible -- an average increase of 1.7 percentage points, with a standard error of 0.7 percentage points. How much money do campaigns waste every year on a purchasing practice that is probably only impactful in extremely close races?

There's another possible impact of lawn signs that campaign managers may have failed to consider. Lawn signs give people the impression that everyone's voting -- in a town like Charlottesville, they even give the impression that everyone's voting for the same candidate. This could easily leave voters with the impression that (a) this is not a close election, and (b) there is a large portion of the population voting. Both of these factors will decrease p, the probability that an individual's vote will be the deciding vote in the election, thereby decreasing the expected value of voting and decreasing the chance they'll take the time to vote at all. From the perspective of the campaign manager, if this effect is larger than the increase of votes from distributing lawn signs, distributing lawn signs could actually hurt your candidate's chances of winning. The more lawn signs you post, the more you increase the chance that someone will participate in rational abstention come election time.

“I Voted” Stickers are Expressions…and Nudges.

     I love “I voted” stickers. Placing the sticker on my shirt gives me a sense of pride and fills me with patriotism. It also shows others that I voted, allowing me to express to others (who I see on the day I vote) that I think voting is important. And this feel great! But it also does something that is a bit more interesting: it silently nudges the people I see to vote too.

    We encounter nudges throughout our day, but no experience is as visceral as the coffee shop tipping situation with Square, which I encountered yesterday. The barista turned the Square screen around and there it is: 10%, 15%, 20%, or no tip. I had just bought a large pumpkin spice latte (in season, of course), and was faced with this horrifying moment. It was just a coffee, no need to tip, right? But, the screen makes it seem that not tipping is a “bad look”; what if the people behind me see that I didn’t tip? The nudge helps to “coax” people into tipping more often than they normally would without this tipping mechanism. As Amanda Ventresca of Café Grumpy in Manhattan notes, “Square puts [tipping] in their face as an option, and although we’re not necessarily busier, tips have gone up.” “Square says that 45 to 50% of all transactions on its systems involve a tip.”

    The “I voted” sticker functions in a similar way. “It's social pressure, not economics, that motivates the marginal, or on-the-fence, voter.” Thus, I see the “I voted” sticker as having a dual function: 1) allowing me to express to others that I voted and 2) pressuring others into voting themselves. Assuming that the people who might be influenced by the “I voted” stickers won’t simply go buy these stickers like Professor Coppock but actually go to vote in order to obtain the sticker, then the nudge might just work. The “I voted” sticker is not only a component of my expressive utility from voting, but also a social pressure tool that attempts to persuade others to vote through perceived ostracization if they refrain from doing so. And as Stefano DellaVigna, an economics professor at the University of California Berkeley and author of "Voting to Tell Others” shows, “the potential public shame of not voting is enough to boost voter participation by 2 to 3 percentage points.” The nudge works again.

Changes in Education: COVID-19

In Chapter 6 of The Calculus of Consent, Buchanan and Tullock wrote that rational individuals may choose the government to be in charge of their children's education, since parents may "not educate their own children sufficiently" themselves (page 75). Most American families are accustomed to having the option of public education available to them. However, due to the coronavirus pandemic, many parents do not feel safe sending their kids back to in-person school. A recent article in The Atlantic predicted parents "fleeing" from schools — maybe forever.

For parents debating whether keep their children home from school this year, they will likely incur some decision-making costs. Buchanan and Tullock explained that if two or more people are required to agree on a single decision, the time and effort required to reach consensus is introduced into the expected costs equation. As an increasing function, the more people who must agree before action is taken, the larger the decision-making costs will become as a result. If two parents and their children decide on a rule of unanimous consent for their family, decision-making costs will be higher than for parents who do not take into account their children's preferences. For a single parent who makes the decision alone, he or she will not have to spend any time or energy recruiting others to the winning side.

That parent will still worry about the effects of either homeschooling or returning to school on their child, however, no matter the ultimate decision. Right now, The Atlantic reports a common thread among all American families: “Parents are terrified of failing their children.”

Why Rank Choice is the Best Choice

In class, I was very excited to talk about Rank Choice Voting, as I have used RCV in past state elections. While we talked about why RCV came to be in Maine, I thought an interesting anecdote on its impact was when RCV was used was in the 2018 midterms for 2nd House District. After the first round of voting Poliquin held a plurality, but not a majority. As lower candidates were eliminated during the runoff, Golden won after securing the majority. This election is a good example of why the voting rules matter. Under the traditional plurality voting system, Poliquin would have been the winner. However, because RCV requires a candidate to get a true majority through runoffs, Jared Golden was declared the winner. Changes in the voting rules can totally alter the results of an election!

One key benefit of introducing RCV is that it allows voters to vote their conscious rather than strategically vote. With runoffs, people are able to vote for the candidate they prefer, as opposed to in a plurality system where people are strategic with their vote. For example the thousands of Maine voters who voted 3rd party were able to do some without fear of "throwing away their vote." As a result, there is better preference revelation. An additional benefit not discussed by Mueller, but which I think is important, is that it allows third parties to run candidates in order to influence a majority party without shifting election results. For example, in the 2018 Midterm race, the Green party could run a candidate in hopes of shifting the Democrat Party to the left without fear that votes cast for them would help Republicans. 

I'm excited to see how RCV plays out in the election in November and look forward to other states adopting innovative voting systems to improve efficiency. 

Fitting into Tiebout's model

As I have begun searching for jobs after graduation, I have started to plan for where I would like to live. I called my buddy from Sterling the other day to gather information about each of the regions up in Northern Virginia and it got me thinking about Public Choice.

The research I have been putting into deciding where to live reminds me of Charles Tiebout's A Pure Theory of Local Expenditures. Right now, my situation allows me to fulfill all of the assumptions we covered when considering where to live. I have perfect mobility (I can move my things anywhere at the end of this year), I have near-perfect information (because of the internet), I have a large choice set of neighborhoods, there are lots of job openings for college graduates, and there seem to be no externalities between neighborhoods.

Based on the article referenced earlier, the communities are fighting over consumer voters (myself included) with all kinds of public goods. When the communities are left alone to provide public goods to the consumer voters, they attempt to outperform one another until everyone's ideals are satisfied. Also, the communities will get a sense of what their consumer voters desire by observing the success of surrounding communities. Whether my interests lie in tasty restaurants, outdoor public arts spaces, access to public transportation, or public parks, I will move to the community that provides me with the highest level of utility given my budget constraint. 

What is the Opportunity Cost of my Time?

Last week I signed up for an online education program known as “Masterclass.” They launched a short promotion offering a 1-year subscription for $1 for all college students (normally it costs $180 for full access). They offer courses on a variety of topics, but I am primarily interested in their classes on filmmaking and storytelling. Clearly, I have downward-sloping demand, as I do not value the courses at $180/yr, but I do at $1/yr.

If I was rational, I would purchase it when my E[MB] > MC. I am only willing to pay up to ~ $50, which implies that my E[MB] is ~ $50. The courses are several hours each. If my E[MB] is less than $50, and I spend ~20 hours on Masterclass this year, that implies that I value that time at $2.50 an hour. Great! My E[MB] > MC, but this is slightly concerning. If I chose to spend my time on Masterclass, does that really mean the opportunity cost of my time is only $2.50 an hour?? 

Not exactly. I could probably find work somewhere to earn more than $2.50/hr, but I value the classes at: E[MB] + UTILITY (i.e. enjoyment & investment in my human capital). Just like we learned about voting, I do not merely consume Masterclass for because its E[MB] > MC. That would suggest I have desperately low opportunity cost of my time. I also derive utility from Masterclass, and since I am now writing about it in a blog post, it seems I’m also getting some expressive value from my consumption! Like voting, the E[MB] alone doesn’t fully explain my consumption, I also factor in utility and expression.

Trump's Political Irrationality At Work

On Tuesday night, watching the presidential debate, it didn't take long for me to notice that neither candidate had a lot of interest in being fully transparent about their platforms. In particular, there was a moment when President Trump was asked if he was willing to condemn white supremacy, and his response was "Sure, I’m prepared to do it. I would say- I would say, almost everything I see is from the left-wing, not from the right wing... I'm willing to do anything I want to see peace." When pressed further to condemn white supremacists, he said "Proud Boys, stand back and stand by. But I'll tell you what, I'll tell you what, somebody's got to do something about antifa and the left because this is not a right-wing problem. This is a left-wing problem." 

Trump did not say "I condemn white supremacy in all its forms" or anything like that. He knew he would alienate his most right-wing voters whose support he relies on to hope to win the election this year. He intentionally obscured his true beliefs by neither condemning white supremacy nor standing against the idea of condemning white supremacy altogether. That way, he can keep his right-wing support and still have a chance to capture voters in the middle. He further demonstrates his desire to capture those middle voters by responding to a question about white supremacy with "This is a left-wing problem", trying to use his platform to keep people from voting for his opponent. 

If Trump knows his voter base as well as I expect he does, it seems that this seemingly failed answer accomplished just what he wanted it to. He has applied Downs' idea that ambiguity in a political platform allows it to appeal to a broader number of voters, and he probably hasn't alienated anyone who didn't already disapprove of him. The New York Times even acknowledged that "there was no sign of a full Republican retreat from Mr. Trump" despite titling that very article "G.O.P. Alarmed by Trump’s Comments on Extremist Group, Fearing a Drag on the Party". The New York Times may be voicing some wishful thinking if they really think Trump didn't get away with another blatant display of racism. 

Unanimity Rule and COVID Safety

My whole life I have generally defaulted to using majority rule in my informal, social decision making. For example, if I am deciding where to do dinner with a group I may ask friends to "like" the text message for the restaurant they prefer and then select the restaurant with the most votes. While the 50% cut off involved in majority rule is fairly arbitrary, in low stakes decisions, like the restaurant example, people are generally comfortable with the ultimate selection just knowing that a greater number of their friends prefer it. Additionally, as people do not want to spend a great deal of time making informal decisions, they consent to cede some control and accept a decision rule that may at times place them in the minority with no way to change the outcome.

The coronavirus pandemic has overwhelmingly changed this "default" decision rule to one of unanimity even in informal, social settings. This is due to the significantly larger potential negative costs that could be incurred by a decision that is not in the favor of every single person in the group. For example, if a group of friends is deciding what activity to do this evening, they should must to the comfort and safety of the most cautious or vulnerable person in the group. If we assume that sitting out from the activity is not an option, people will not want to accept a lack of control over the decision making process even if it means more time and effort to work out a solution. As there is some level of uncertainty as to the safety preferences of everyone in the group, the rational individual (in a small group decision) would choose a unanimity decision rule to protect against the chance that their safety preferences are in the minority. 

Two Apartments, One Controls Heat

Some of my friends live in a duplex. They live in part of the house, and some other students live in the other part. During Charlottesville's recent cold weather, my friends found out that only their neighbors had control of the heating, and that the heating had been turned up uncomfortably high. This appears not to be a singular problem. My friends sent representatives to negotiate lower temperatures, but they are worried about the upcoming winter.

Upon hearing of this, my reaction was immediately of the Coase Theorem, and I told them that they would definitely be able to come to an agreeable solution for both parts of the house. The property rights are clearly delineated. Transaction costs are low, since they live in the same house. They will easily be able to approach their neighbors, explain the problem, and find the price such that their neighbors' marginal benefit from payment will exceed the marginal cost to them of keeping the thermostat lower. In fact, even if the situation were reversed and my friends controlled the heat, a deal could still be reached, as their neighbors would then be willing to pay them to raise the house's temperature. It is unfortunate that my friends would have to pay extra money to be able to control the temperature in their house. However, they also told me one other thing that ensures their neighbors will be willing to compromise: my friends have the power to shut off the duplex's water.

A Failed Attempt to Exclude

 Recently, a couple of friends and I went fishing on the Moorman's river, about a half hour away from Grounds. As we drove up there, one of my friends informed me that in order to fish on the river, I technically needed to have a fishing license, but that it wouldn't be a problem if I didn't. Once we arrived at the trailhead to get to our fishing spot, it became very clear that no one was going to stop me from being on the trail, fishing on the river, or generally doing whatever I wanted while I was there. The gates were wide open, and even if it were closed there was a clear path where people regularly walk around it. Though I've only been a couple of times, there has never once been any sort of officer or ranger monitoring the area to ensure everyone follows protocol. 

The state had half-heartedly tried to exclude this public good and failed. There was a requirement to purchase a fishing/hunting license through a complex process involving many fees from about $10 up to over $200. However, since the good was not excludable in its current state, and one person's use of the trail does not decrease the utility I get out of being on it, it can be looked at as a public good and I am completely disincentivized to pay for a license. I enjoy free riding and so does everyone else, so either the state needs to increase the excludability of the river, or accept its use as a public good.

Is Trump the Country's Biggest Free Rider?

According to a recent New York Times article, President Donald J. Trump only paid $750 in federal income taxes in 2016, another $750 his first year in office, and paid zero in federal income taxes in 10 of the last 15 years. This is despite the fact that, according to Investopedia, Americans have paid $1.4 billion a year to keep the president well cared for and protected. And if we consider the protection and care of the presidency non-excludeable and non-rival public good because the benefits of a well protected president, most notably a stable government, and the benefits of a well run executive branch, are available to all tax-payers including the president, President Trump is underinvesting in this public good and therefore, is a free rider. 

What may make President Trump even more of a free rider is that though the protection of the presidency can be considered a public good, Trump has not only been the most direct beneficiary of such protection as other presidents have, but unlike other presidents, he has uniquely used his position as president to enrich his private businesses.

The Irrationality of the Electoral College

 

In “Voting, Rational Abstention, and Rational Ignorance” by Johnson, he claims that voting results do not necessarily reflect the will of the majority, but the preferences of those who went to the polls. However, because of the electoral college system of determining the presidential election, even those who go to the polls may not have their preferences reflected in the outcome. In the past twenty years, two of the five elections in the United States have ended with voters revealing their preferences for one candidate, yet the other taking victory due to the electoral college. That is, 40% of the presidential elections in the past two decades have resulted this way. Now, this is not an argument about the pros and cons of the electoral college, but rather the impact it may have on the incentive to vote in a presidential election and the utility derived from voting.

According to Johnson’s explanation, as long as expected marginal benefit (the probability that your vote is decisive) + some other beneficial reason for voting (social pressure, moral obligation, opportunity for expression, utility from the act of voting, minimax regret, etc.) exceed the cost of voting, then it may be rational to vote. We already know that in a presidential election, the marginal benefit from voting is infinitely minimal, and then, if the electoral college results of an election are different from the popular vote, many of the other reasons people vote can be discarded making it irrational to vote entirely. If there is a reasonable chance that the candidate who wins the popular vote, a direct reflection of the preferences of voters, loses the election, what incentives are left for people to vote in presidential elections? If the candidate who wins the popular vote does not win the electoral college, the utility from voting may be obsolete. There could be a high level of regret for even voting in the first place if your vote, which was represented in the popular vote, ended up being essentially worthless in the outcome of the election. As Jesse Wegman writes in the New York Times, “When every vote matters, more people vote”. I argue that by changing to a popular vote, rather than relying on the electoral college to determine a victor, there would be a greater incentive to vote and greater expected utility from voting knowing that citizens’ preferences will be properly represented every single time.

Do Close Elections Boost Voter Turnout?

In this week's reading, researchers Ashenfelter and Kelley did not find that "perceived closeness" of a political race had any statistically-significant relationship to voters' probability of casting their ballots (Mueller, 311). Feeling a duty or obligation to vote had a much stronger impact. Later in the chapter, Mueller described a separate study also conducted in 1975. Researchers Tollison, Crain, and Paulter did report importance in "perceived closeness," especially in states with large newspaper circulation. Mueller quoted them on page 319: “Information concerning the expected outcome [tends] to make more people vote in close races." 

I considered how people have constant access to news today. Now that we can no longer escape the headlines, if the public is inundated with predictions that a race is neck-in-neck, will that information motivate them to head to the ballot box? The National Bureau of Economic Research published a paper in 2017 that did find a causal effect of "anticipated election closeness" on voter turnout; the findings "indicate that information about an election’s competitiveness can shape political behavior." The paper speculates that if the media hadn't predicted a Democratic landslide in 2016, the outcome of the presidential election may have been different.  The American Psychological Association highlighted a similar study on their website with identical findings — "voter turnout increases when polls predict a close race." 

How this will affect the 2020 general election, no one can say yet. But those hoping for one candidate's victory should steer clear of painting it as an inevitability.  

Johnson's Theory of Rational Abstention Further Validates that Conservative Voting Restrictions are Unreasonable

An article just released by Vox News, recounts Chief Justice John Roberts' long "crusade" against certain provisions of the Voting Rights Act of 1965 (VRA) which climaxed with him leading the Supreme Court in striking down the section of the VRA that required states with a history of implementing racist voting restrictions to be pre-cleared by the federal government before implementing any new voting restrictions. This decision was important because the lack of preclearance has now allowed states such as North Carolina to implement voting restrictions that have in some cases, as a Federal Appeals Courts stated, targeted "African American [voters] with almost surgical precision" (Vox, 2020). 

While it is understandable for their to be some restrictions to limit widespread voter fraud, restrictions beyond those that come as a result of registering to vote and keeping up-to-date voter rolls to prevent someone from voting in two separate states or voting for a deceased relative, are unreasonable. This is because as Johnson concludes in his chapter on Voting, Rational Abstention, and Rational Ignorance, many Americans already chose not to vote because the opportunity cost of voting once is larger than the benefit and therefore, the opportunity cost of attempting to vote more than once must be even larger than the benefit of doing so. And therefore, this large opportunity cost acts as a disincentive to even attempt to commit voter fraud.  

As Johnson writes, the opportunity cost of doing even the simplest tasks such as driving to the polling place and waiting in line to cast a ballot far outweigh the possible benefit that that single vote could bring the voter; especially when considering the low probability that that single vote will decide the outcome of the election. So if we consider the fact that 1) there is a low probability that there will ever be enough rational voters in a given election who would use their time and money to figure out how to vote more than once, to the swing an election, 2) that there is also a low probability that someone can successfully vote more than once even without restrictions such as voter ID laws, and 3) that there are costly penalties for anyone caught committing voter fraud; the cost, when considering potential civil penalties, and opportunity cost, when considering the forgone leisure and work time, of successfully committing voter fraud are much too large for a rational voter to even consider attempting it. Therefore, voting restrictions beyond those that come with the identification process of registering to vote and keeping updated voter rolls, are unnecessary. And as has recently been the case in states such as Georgia, voting restrictions have in fact disenfranchised the limited amount of people who actually choose to vote, despite the high opportunity cost of doing so; and even may have increased the opportunity cost of voting.

Group Gifts and Free Riding

 This weekend I was with my parents at brunch when they reminded me about how in High School at the end of every sports season there was always a coaches gift. I never thought much of this but now, analyzing the situation with an economic lens, I can now see how large the threat of free riding is in this kind of scenario. Group gifts allow you to benefit the same amount whether you donate nothing or a sizable amount, because the gift recipient cannot differentiate between those who contributed versus those who did not. 

This is a real world example of the limitations of the Coase Theorem. It is non-excludable meaning you cannot exclude anyone from the enjoyment of being part of the gift giving group unless you were to list out the contributing individuals, which is social taboo. It is also non-rival, meaning that one individual's contribution does not limit another's ability to contribute. This is an example of market failure because the group gift will be underproduced; people can contribute less and hide behind the shield of saying "it's from all of us."

The Potential Externalities of Amazon's HQ2

The discussion of externalities in this class reminded me of an issue we discussed in my Urban Economics class: the externalities of Amazon’s HQ2. Specifically, the issue debated is whether cities should bid for large firms or if new firm locations should be chosen by the free market alone.

Believing the costs to outweigh the benefits, many argue that cities should not bid for companies to open new offices in their area. One potential drawback are congestion costs. These negative externalities of production are inconveniences brought about by the firm’s opening. As more and more people move in to work at Amazon’s HQ2, Northern Virginia will likely see a higher cost of housing, greater commuting times, and increased noise pollution. The marginal cost to society will be higher than Amazon’s private cost because the only cost the corporation will face is the cost of opening. While Amazon’s HQ2 will bring in higher paying jobs, many predict that the benefits will occur mainly to the wealthy and educated, while rising housing costs will threaten to displace the middle and lower classes in Northern Virginia. 

However, there is another externality to consider that may suggest “bidding” has a positive role to play. According to Greenstone et al. (2008), a new firm location can create a positive externality of production; the opening of a new firm may raise productivity in nearby firms in similar industries. This effect results from several factors. Multiple firms located together may allow workers from different companies to interact and share knowledge. Additionally, with more of the city’s employees working in the same industry, companies will be able to find a better match for their positions. Following this logic, municipalities should bid for new firm locations when they have preexisting companies that they expect would become more productive. Bidding incentivizes the firm to choose a location that produces the productivity bump over a location that does not and provides a subsidy to the firm for their positive externality. The question remaining is whether it is reasonable to expect other DC area tech companies to experience this productivity gain from Amazon’s arrival. 

Are Virginians Irrational Voters?

Earlier this week, Virginia was one of the first states to start in-person voting. Despite being about 50 days from the election, voters came out in mass to cast their votes. In Fairfax County, there were hundreds of people in line, who waited up to four hours to vote (!!). Hearing of these events throughout Virginia made me think of the Johnson reading and his argument that rational, self-interested individuals do not vote. 

The income lost by waiting four hours will most likely not be greater than the benefits of casting an individual vote (MC>MB). A minimum wage worker would have cost of $7.25*4=$29, which is significantly larger than the pennies of benefit from a national election. A rational actor would then weigh these cost and benefits and decide not to vote. However, clearly these people believe they received significant benefit, or they would not have wasted their time. The chances of these votes swinging the election are abysmal, especially in a blue dominated county. So why do it? 

One explanation could be the social pressure to vote. Especially in Northern Virginia, being politically active is a determinate of social positioning and respect. Having the ability to tell coworkers, neighbors, etc. that they were so dedicated to democracy that they waited 4 hours to vote may be a source of social capital. I think that Johnson would agree that these voters are more motivated by the private rationality of saying they voted than the actual impact of their vote. That is, the greatest benefit they get isn't from who wins, but rather from saying they did their civic duty to vote in this critical election.

 

 

Mask Wearing and Collective Action

   This past week I had a repairman come out to my home to fix my internet. As I went out to meet him with my mask on, he said "Oh, let me go back to my truck and get my mask." This interaction helped me appreciate the value of the masks mandates that have been passed around the country since mask-wearing for individuals that are not in high-risk populations is a public good. Most young adults are at low risk and do not individually benefit from wearing masks. I know that while I personally wore one before the statewide mandate, I found it annoying and would have preferred if I could have not worn it. This creates an instance of the Prisoner's Dilemma for those at low-risk: the individual doesn't feel like their mask-wearing contributes much to the public's health so they are less inclined to wear one, yet everyone is better off if we all wear masks.

  Governor Northam passed one of the 20+ mask mandates currently in effect across the country at the end of May. This requirement forces collective action from Virginians, effectively moving to a Pareto-efficient allocation of mask-wearing. In practice, this has led to higher levels of mask-wearing among low-risk individuals, leading to those at high-risk being better protected, and overall raising the public's wellness. This has translated to lower COVID-19 rates per capita compared to no-mandate states, demonstrating that the government's use of a mandate to force collective action is indeed a Pareto improvement, saving lives in the process. The mandates have proven to be a good example of when government intervention is necessary to get closer to allocative efficiency.

Prisoner's Dilemma & The Race to a COVID-19 Vaccine

After testing positive for COVID-19 over the weekend and our discussion of the prisoner's dilemma in class today, I started to think about how these two subjects actually connect quite well. COVID-19 has affected almost the whole world and the race is on for which country will be the first to successfully introduce a safe vaccine, but herein lies the "real-life prisoner's dilemma."

To date, the US, Europe and China have led the pack, investing the most into developing a vaccine, but their willingness to share and take collective action is lacking, one may argue. Each country has a dominant strategy: not to cooperate or combine with one another. It is in each country's best interest to develop and manufacture their own vaccine and distribute it to their citizens as quickly as possible, without wasting time, money and effort on getting the vaccine to other nations. Countries do not want to share their contributions with others in fear they may not get any benefit/contributions in return; they want to protect their own people first and maximize their profit and prestige. Unfortunately, this strategy comes at a greater cost to the rest of the world. If countries were to coordinate efforts, a vaccine could safely reach all people around the world at a faster rate, resulting in an allocatively efficient outcome. Once successfully approved, a COVID-19 vaccine should be a public good. By countries not taking collective action on the development, manufacturing, and distribution of the vaccine, the world is settling on an allocatively inefficient outcome of a public good: Q will be less than Qae.