Term
| What are the traditional theories of Collective Action? |
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Definition
1. Functional: Groups exist because there is a social need for them
2. Cultural: common interests lead to collective action
3. Psychological: Humans hardwired for group activity |
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Term
| What is the political economy approach to collective action? |
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Definition
| People join groups when their expected utility for joining outweighs the costs of participation |
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Term
| Collective Action is a public good? True or False. |
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Definition
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Term
| What are the characteristics of a public good? |
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Definition
1. Nonexcludability-individuals can't be excluded from consuming it.
2. Nonrivaledness-my consumption doesn't take away from your enjoyment
3. Jointness of supply-Needs at least 2 or more people to supply it. 1 person can't do it. |
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Term
| Gives some examples of a public good |
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Definition
1. Lighthouse. It's non-exludable and nonrivaled. Problem is that 1 person can build it and supply it. Not the best example.
BETTER EXAMPLES:
1. Fireworks show
2. National Defense
3. Clean air |
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Term
| Successful cooperation is determined by: |
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Definition
1) Limited number of producers
ex. bananas and copper
2) Elasticity of product: how price-sensitive consumers are to change in price. ex. banana price v. oil price
3) Availability of close substitutes
4) Innovation (more efficient use of resources) |
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Term
| What is the tragedy of the commons? |
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Definition
| A situation where it is difficult to prohibit use of a valuable resource (non-excludability), but wherein the resource is RIVALED. |
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Term
| Common Pool Resources are: |
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Definition
| Not quite public goods. CPRs are rivlaed.BUT solutions to CPRs are collective action problems. |
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Term
| Can you create a common pool resource problem? |
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Definition
Yes. By subsidizing or providing wider access to an excludable and rivaled (private good), you essentially create a ruse to use it.
Examples: Oklahoma Land rush, raods, National Parks, etc. |
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Term
| What are the solutions to CPR problems? |
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Definition
1) Hierarchy-Laws, rules, regulations (coercion)
2) Markets: creating tradeable property rights
3) Community: Relying on a set of common values or norms to allocate resources |
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Term
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Definition
| Relates to collective action. Primary constraints are the choices of other individuals. Key Concept of game theory: finding the equilibrium point. A point where no single individual has an encentive to deviate from their current choice. |
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Term
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Definition
1. Prisoners Dilemma-competitive
2. Chicken-competitive
3. Assurance game-cooperative game |
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Term
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Definition
Situation where even though mutual cooperation is in the interests of all players, it is in the interest of the individual to not cooperate.
The equilibrium point is mutual defection (non cooperation).
However, from a collective action standpoint, this does not make sense. Look at the preference profile:
P1: Y>W>Z>X
P2: X>W>Z>Y
The individual decision of defection (Z) is worse than the c.a. decision which would be W (neither snitch). |
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Term
| What is Nash Equilibrium? |
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Definition
A point where no player can benefit by changing his/her strategy; if all other players keep their strategy unchanged.
Mutual defection is a nash equilibrium in the P.D. |
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Term
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Definition
1. Prisoners dilemma (person to person)
2. N-Person prisoners dilemma (you v. the world) |
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Term
| How do you get people to participate/overcome prisoners dilemma? |
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Definition
Give them individual benefits (ex Starbucks card, or ppl monitoring u in small groups)
EX: Civil rights movement. BReak people down in smaller groups, like churches. |
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Term
| How is the chicken game different from the P.D? |
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Definition
| The incentives were changed. Therefore, there are two equilibrium points. Non-cooperation in this game means both die. Signaling is important in the chicken game. |
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Term
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Definition
It's a coordination game because you need to coordinate plans, otherwise you are both (or all) messed up.
1. Multiple equilibria
2. coordination needed
3. info is crucial..need to be clear
3. clear signals to show true motives.
EXAMPLE: prof. gill coffee. |
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Term
| Chicken v. P.D. incentive structure |
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Definition
P.D.:
1. Y>W>Z>X
2. X>W>Z>Y (one equilibrium)
Chicken:
1. X>Z>Y>W
2. Y>Z>X>W (two equilibria) |
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Term
| How are assurance games similar/diff to Prisoners Dilemma? |
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Definition
Cooperation is in the interest of the entire gorup (pareto efficient).
However assurance are much easier to solve because there is a mutual cooperation point at pareto efficient. No incentive to defect/ |
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Term
| Example of Assurance game: |
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Definition
1. Daylight savings time
2. Hockey helmets
3. Metric system
4. HD TV
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Term
| Can a prisoners dilemma become an Assurance game? |
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Definition
Yes. It's all about iteration and reputation. If my reputation is being a cheater, no one is going to want to play with me. Therefore, I need to have a good reputation.
Iteration allows for learning and trust-building. It allows people to see mutual advantage in cooperative strategies.
cooperation dependent on if iteration ends at a known point. "backward induction" occurs when you know the end point...destroying cooperation. |
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Term
| How do you solve cooperative dilemmas |
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Definition
The main political and economic challenge in cooperative games is to get people to move from mutal defection to mutual cooperation...and stay there.
CREATE INSTITUTIONS
1) Hierarchy solution
2) Market (individually contract)
3) Community |
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Term
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Definition
Your ability to achieve your goals are affected by other people trying to achiever their goals. This involves strategic constraints. *Conflict and cooperation* |
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Term
| What are the asumptoins of Rational Choice theory? |
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Definition
Assumptions of Rational Choice:
1. Utility Maximization
o People make strategic decisions to get the most utility for the least cost.
o Thin & Thick Rationality
2. Expected Utility
o The world is filled with:
-Risk: Outcomes with known probabilities
-Uncertainty: Outcomes with unknown probabilities |
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Term
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Definition
Prospect Theory: Illustrates cognitive limits of rationality.
· People tend to choose low-valued guaranteed gains over higher-valued expected gains.
· People tend to fear expected losses over certain losses even if the certain loss will be greater
· People tend to exaggerate rare low risk probabilities, and discount common high risk probabilities. EXAMPLE: Flying in a plane vs. driving a car, DEAL OR NO DEAL..
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Term
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Definition
The ability to charge different people different prices based upon the utility that they derive from a product.
-Enhanced by monopoly power and difficulty in reselling product. Need to find a mix.
Example:
a) sales and coupons ‘after Christmas sale.
b) temp-sensitive soda machine
c) airline tickets
d) Indulgences: Roman Catholic church had people to pay to get out of hell. Private confessionals. |
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