Laver Chapter 3 - Summary Private Desires, Political Action PDF

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Lecture 1a required reading. Collective action and the state....

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Laver chapter 3- collective action

Satisfying private desires is almost certain to require collective action of some sort When an individual can be excluded from enjoying the benefits of a good that is collectively produced then he/she has an incentive to contribute to its production When no exclusion is possible- free riding- too many people free ride, insufficient resources- making all who value the good, including free riders, worse off- COLLECTIVE ACTION PROBLEM If everyone has to work together to produce the good, if the good is valued more than the cost of production then it would not be rational to opt out Examples – group of addicted smokers, find themselves locked in a room where there is a suspected gas leak- no being blown up is good thing but requires cooperation of each member , each would love to smoke but know no one can as they must prevent being blown up- providing they are not feeling suicidal every group member finds cooperation easy There are examples of goods that require some but not total cooperation- which people can enjoy even if they have not contributed- these goods that are susceptible to collective action problem Example- many forms of pollution. A bonfire in a a garden does not contribute to much pollution but an entire city of people doing it creates a dangerous smog. Once the smog has become a realtiy no one person can make much of a difference to it- eradication requires collective action- one person will not want to give it up since there contribution makes little difference to reduction so free riding is rational. If everyone still wants to enjoy a warm fire then they will collectively be worse off affected by smog than they would have been if everyone decided not to do it Olson suggests number of solutions to collective action problem: 

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find a way of excluding free riders e.g. public roads only for those who have a smart card. However this is not applicable to some goods e.g. clean air .May be very expensive to provide goods in a way that allows free riders to be excluded e.g. architecture- so for many economic and technological reasons some goods cant be privatised provide exclusive private benefits as incentives for contributing members e.g. trade unions must provide incentives to join, for example providing insurance for members. If no incentives they can enjoy unions collective wage bargaining activities without contributing to these

monarchy: work of Thomas hobbes has been used recently as a potential solution to collective action problemsaid they must make covenants (promises) with each other- but promises are just words give the power to enforce all agreements to one person- a monarch- in effect a dictator monarchs power enables to make the covenants that are necessary precondition for any solution such agreements can oblige people not to free ride, under pain of sanctions, that exceed the benefits of free riding- possible because enforced by a third party

the problem that this interpretation cannot address is why rational people would give the power necessary to enforce all agreements to one single person- monarchs can use this power for persona profit however, even a ruthless absolute monarch will not over exploit subjects so badly that their falling productivity reduces their potential for efficient exploitation- for this reason some collective action problems may be resolves whereas none could be in the state of nature (before the monarch, everyone free to do what they want)

anarchy as a solution to chaos: obvious alternative to granting a monopoly of power to one person is to grant none- the anarchist solution to the collective action problem grant a system of agreements that enforce themselves- or are incentive compatible mutually beneficial agreements stand little success if any one side of the party suspects that the other will not fulfil their side of the deal incentives for all parties to honour commitments even the most powerful state cannot address every collective action problem that occurs e.g. agreements to clean communal area, you are not going to phone the policy everytime someone does not do their cleaning duty- even by societies dominated by a monarch such day to day social interaction is beyond purview of the state the prisoner’s dilemma: shows why two rational individuals may not cooperate Apr i soner ’ sdi l emmai sani nt er act i vesi t uat i oni nwhi chi ti sbet t erf oral lt ocooper at er at her t hanf ornoonet odoso,yeti ti sbestf oreachnott ocooper at e,r egar dl essofwhatt he ot her sdo t wopr i soner shav ecommi t t edaser i ouscr i mebutal l oft heevi denceneces sar yt oconvi ct t hem i snotadmi ssi bl ei ncour t .Bot hpr i soner sar ehel dsepar at el yandar eunabl et o communi cat e Conf essandi fyourpar t nerdoesnot ,youwi l l beconvi ct edofal es sercr i meandser veone y eari nj ai lwhi l et heunr epent antpr i sonerwi l l beconv i ct edofamor eser i ousc r i meand ser v et eny ear s .I fy oudonotc onf essandyourpar t nerdoes ,t heni ti sy ouwhowi l lbe convi ct edoft hemor eser i ouscr i meandy ourpar t neroft hel es sercr i me.Shoul dnei t herof y ouconf esst hepenal t ywi l lbet woy ear sf oreachofy ou,butshoul dbot hofy ouconf esst he penal t ywi l lbefi v ey ear s Each player will prefer the least amount of years possible Although agreeing not to confess is rational, compliance is not If prisoners cooperate they do better, if they don’t they do worse- situation humans found themselves in in Hobbe’s state of nature

The tragedy of the commons: Involves many people, not just two as in the prisoners dilemma group of farmers each has access to a piece of common pasture- each is able to put sheep on it and let them eat the grass- making private profit from them given shared environment of the commons grass is able to grow at a particular rate on it- if it is eaten faster than this rate grass will disappear common areacan become infertile- no grass can grow-sheep cannot feed on it so farmers make themselves worse off rather than if they collectively limited their herd sheep become more hungry- become less fat- less profitable private incentive to graze more land- everyone becomes worse off cooperative course of action is to not put an extra sheep on the land – but defecting is a common strategy for each farmer- if none of the others put an extra sheep the defecting farmer does betterbut if all others do too then the farmer will still be better off doing so assuming that it is not this one extra sheep that ruins the land an outside enforcer can help solve this – limiting the amount of sheep each can put on the land

long term interaction, anarchy and conditional cooperation: when the same people interact over a period of time the possibility of cooperation is much greater than if it was a one-off interaction I make what I do today depend upon what you did yesterday- conditional strategies- can solve collective action problem Tit for tat- first player cooperates, second player does wat first player did- so both always cooperate in following games-solves collective action But will only work if number of games are infinite – players will know last game will offer no incetives to cooperate

Imperfect information about the payoffs of others: Only the person that is concerned knows how he/she feels about some particular outcome So nobody can have perfect info about the payoffs of others For example 100 pound is valued very differently between a pauper and a miliionaire This problem is known as ‘interpersonal comparison of utility’ Payoffs for something I love and you hate e.g. the opera. Utiles are the things that stimulate the brain in such ways as to generate those feeling of well being and malaise that motivate peoples behaviour

Since jack loves opera every ticket confiscated makes him more miserable – confiscating ten makes him ten times more miserable. Jill who hates opera has a very different view- when arrested she has ten tickets and was miserable about the prospect of going to ten operas- when ten tickets are confiscated she is ten times more happy They are not involved in a prisoners dilemma- have their own common strategies Moral of this is we can never really know what games we are playing with others, since we never really know their payoffs- we are liable to make bad mistakes if we assume other people value the same things in the same way we do People are much likely to rely upon conditional cooperation , if those that they are cooperating with are ‘like them’ Conditional cooperation’s and anarchist solutions to collective action problems are much more likely when a group of people have this info about each other than when they are total strangers

The discounting of future utility: Assumed people value future utility less than they value present utility, Repeat play game can look very differently on two different people , one who discounts future utility very heavily, (an example may be terminal disease) and another who does not- will affect conditional cooperation- they operate to deter defection now, on the basis of threats of punishment in the future For these threats to work the benefits of present defection must be small in comparison to future punishment Those who discount future utility very heavily may be tempted to defect if the immediate benefits exceed the future costs of punishment The less an individual discounts future utility – the more likely he/she is to fid it rational to stick to a conditionally cooperative strategy- so more likely to solve collective action problem

Imperfect info about previous moved made by other players: If people can defect from cooperation without being detected then conditional strategies will provide no incentive for them If there are more than two players in a game it is difficult to know who has defected May be many collective action problems where it is difficult to identify free riders Farmers can release sewage into the pool of water but if everyone does this it may mean that it is not drinkable. Other option is to treat it but this is expensive. If all farmers release it into the pool then it will become too pollute and they will have to get it in from afar- even more expensive. But it is possible for the farmer to release the sewage into the pool late at night and no one will know who it was. Each farmer has an incentive to release sewage into the pool

Conditional strategies are constrained if they are not able to identify and punish the defector- less likely to succeed in solving collective action problems

Mistakes: Incorrect assumptions about things that they have imperfect info Prisoners dilemma- what if the other player actually enjoys time in prison and is looking for ways to increase time there Some conditional strategies that can help solve collective action problem are more prone to mistakes than others Tit for tat can go badly wrong if people make mistakes- what if you make a mistake in the first game and defect. If both using a tit for tat strategy this will lead them to a road to ruin- can never get mutual cooperation back Can get things back on the rails y cooperating twice in a row

Conditional cooperation in interactions between large numbers of people : Much more common in the real world for large numbers of people to be involved A potential defector will know that cooperation will remain rational for the rest of the players even after someone has defected So defection and free riding become attractive, even in repeat play games If so many others defect then it is no longer rational for other players to continue cooperating An individual group member will cooperate only when such cooperation is pivotal to collective action- an individuals choice of strategy makes a difference in future games between whether or not the cooperation enough of the rest of the group to generate valuable collective action Larger the group less likely individuals are to regard his/her cooperation as pivotal A group may be large enough to tolerate some free riders but when this increases and group of cooperation has shrunk to such a small size that further defection will render future collective action non-viable Collection action problems are difficult to solve in big groups since no individual is pivotal

Threats promises and cooperation: Threats and promises imply courses of action which the person making them would prefer not to carry out If students do not hand in an essay by deadline they will get – this is university rules. Imagine I say to the student if you don’t hand in an essay by deadline I will give you 0 marks- when I say these words I am just stating the rules of the game and not changing the structure- not really a threat. If I say f you don’t hand in the essay by deadline I will break every bone in your body- this is a threat.

This threat may affect the students behaviour but why should they believe me since I have no incentive to actually carry out the threat? I don’t actually want to do it and I would probably loose my job A threat to do something that the threatener wants to do anyway seems redundant- a threat to do something the threatener does not want to do seems incredible The only way to make future threats credible is to carry out the threats we make now even if we do not want to Reputations do make a difference and can help people solve collective action problems by opening up the possibility of making credible threats and promises Reputations will be easier to build and maintain among smaller groups But when people interact with each other over long periods of time reputations are very valuable commodities and it may be that there is almost no real world situation where it can generate high enough incentives to tempt some to put their reputations at risk The role of norms: Widely known conventions e.g. driving on the right side of the road- this will prevent accidents We can think of such conventions as norms Norms help people to identify combinations of strategies that result in mutually beneficial collective action Norms may be far more controversial if some strategies are more beneficial to some people while other strategies are more beneficial to others...