Ferguson Collective-Action and Exchange3

7/22/2019 Ferguson Collective-Action and Exchange3

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Collective

Action

and

Exchange:

aGameTheoreticApproachto

inprogressforStanfordUniversityPress

WilliamD.Ferguson

[email protected]

or e or s op n o ca eoryan o cyAnalysis,

IndianaUniversity

September27,2010


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toengageincollectiveactiontoovercome

institutionaltheorists. ElinorOstrom


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CollectiveActionProblemscreatemarketfailure

TheabilitytoresolveCAPsunderliesmarketsuccess;CAPsthusunderlieeconomicdevelopment

FocusingonCAPsasaunifyingtheme,thisbookusesagametheoreticmodelingapproachtounifydiverse

Developmentsfromnewinstitutionaltheory,informationecon,behavioralecon,networktheory

Asymmetricinformation,power,motivation&socialpreference,socialnorms,formalinstitutions,2and3

,


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gametheory)

, , ,

theoryfor

graduate

students

in

economics,

, ,


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Firstquicklistofchapters

T encommentsoneac c apter

Emphasisonearliersections,reciprocity,andsocialnorms


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ContemporaryPoliticalEconomy

1) Introduction:Overview2) DomainsofInnovativeTheory


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PartII:ProblemsofCollectiveAction

an o v a ono gen s(Foundations MicroPicture)

e as c conom cso o ect ve ct on

3) Enforcement,Coordination,andSecondr er o ect ve ct on ro ems

4) SeizingAdvantage:StrategicMovesandower n xc ange

5) BasicMotivation:RationalEgoistsand

ec proca ayers6) FoundationsofMotivation:Rationalityand

oc a re erence


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PartIII:Institutions,Enforcement,and

Exchange

7) InformalInstitutions

8 Secon PartyEn orcement

9) FormalInstitutionsandThirdPartyEnforcement


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PartIV:NetworksandDynamicsof

CollectiveAction

10)NetworksandPoliticalEconomy

11 AgentBase Mo e san Emergenceo

Resolution(ornot)


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PartV:ImplicationsonPolicyand

Growth

12)PolicyandPoliticalEconomy

13 Know e ge,Co ectiveAction,Institutions,

Location,andGrowth14) Conclusion:MovingForward

Nowsomedetailsoneach


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ResolutionofCAPsisnecessaryformarket

ResolutionCAPsunderlieseconomicpotentialoran qua tyo eve opmentan growt

Keyrationaleforpolicy

UnderstandingCAPsisfundamentalforpolicy

anal sis


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Chapter1:DomainsofInnovative

Theory

Corerecenttheoreticaldevelopments;linkstoCAPs

InformationEconomics:asym info;principalagentproblems,contracting,enforcement,transactcosts,

informalandformalinstitutions;relationsbetween2nd

and3rdparties e av ora conom cs:soc a pre erence,su stant ve

andproceduralrationality,relationstosocialnorms

Networktheor :Pro ertiesofnetworks;emer ence

PolicyLiterature:Punctuatedequilibriumtheory

GameTheory:classicalandevolutionary

W t CAPsun y ngconceptua mo e ngapproac


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Chapter2:TheBasicEconomicsof

CollectiveAction

Briefhistor ofthou ht:Hume Smith Coase

Hardin,Olson,Schelling,North,Ostrom Wideapplicability:PG,externalities,CPR,

contracting credibleagreements,trust

TwoPlayerGames:PublicGood,PDascoremodel;assurance,chicken,battle;

Variants:returnstoscale,benefit/costconditions,

soc a op ma,ex erna es Illustratedimensionsof/approachestoCAPs


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, ,

(Numericalpayoffsrangingfrom 1to2)

inseparateWor i e


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BasicPublicgoodsequation:

i =qi ci+ cj


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Chapter3:Enforcement,Coordination,

andSecondOrderCAPs

FirstandsecondorderCAPs

Econoftransactionscosts:

Coordinationandcommitmentforexchange

Defineandenforcingproprights;

North:thekeybarriertodevelopment

Coordinationandassurance(schedules,etc.)

Enforce,completeinformation:problemofcosts

SecondorderCAP


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Enforcement&contractingwithasymmetricinformation

Adverseselection,lemons,andcoordinationfailure

Moralhazardandprincipalagentproblems

Problemofcontractingquality; Requiresinternalenforcementmechanism;types

Efficiencywagemodel;excesssupplyoflabor

,

i. Implicationsonnonmarketclearing;power(Ch4)

ii. Zerocontribution2nd and1storder Ch59


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Chapter4SeizingAdvantage:Strategic

MovesandPowerinExchange

Definitionofpower:

groupstotake,alter,oravoidspecificactionsinamannerthatthe

formerbelieves(perhapsmistakenly)isinitsowninterestandthatthe

Powernotpossibleinpurecompetition

Economicsandformalizingpower


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GametheoreticrepresentationofLukes3facesofpower;domainsofinfluence:

Power1:alteringbehavior;Nashcooperative

Power2:alteringrules;strategicmovesinGT

Variation:TriadicPower(Basu)andPower2 Power3:alteringbeliefs;conditionedpowerexample

(Basu) Havelsposttotalitarianstate

PowerandPoliticalEconomy: Powerbinds distributiontogrowth


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Chapter5BasicMotivation:Rational

Egoistsan Reciproca P ayers BeginstoaddressCAPquestionfromch 3

assume ra ona narrow ra ona y

Selfinterestaxiom(Bowles):selfregarding,outcomeorientedpreferences;rationalegoists(Ostrom)

vs.intrinsicreciprocity(Sobel):desiretorewardkindandpunishunkind ...inresponsetofriendlyactions,peoplearefrequentlymuchnicerand

conversely,inresponsetohostileactions,theyaremuchmorenastyandevenbrutal(Fehr&Gchter)

BasicModel:u = +(a

3responses:strategic,materialr&p;socialr&p First2:Publicgoodgame;recip alone,addrategoists,

, ,

Playertype,gamestructure,abilitytosanctionmatter


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Socialrewardspunishments(Socialexchange)

Materialconsequencesornot(puresocialexchange)

Multiplayerassurance;lowertippingpoint

Applications Extensions(scopeofR): Workermorale:Rcanfostertrustforgenuinecooperation

incomplexjobs;otherPAproblems HoldupProblem:Rpotentialresolution;firmsseekholdup

tosignaltrust;explicitincentivescancrowdout

Reci rocalconflict:self fulfillin ex ectationsof

unkindness Ralonenotenough;contextmatters

Institutions context:ch 79


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Chapter6FoundationsofMotivation:

RationalityandSocialPreference

Substantiverationalit :consistent oaloriented

withcognition;classicalGTw/apppayoffs Proceduralrationality:adaptivelearning;

evolutionaryGT

SocialPreferencewithsubstantiverationality Otherregardingandprocedureregardingpref

Intrinsicreciprocity;distributionalpreference

MoresophisticatedmodelsofR&withdistribution


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Hollnder:socialexchange,approvalandPG

SubstantiveRationalityandIncompleteInformation

Proceduralrationality

Indirectevolutionarymodels

e av ora mo e s


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PartIII:Institutions,Enforcementand

Exchange

Northscritiqueofconventionalapproachto

Institutions,rules

of

the

game,

informal

and

orma ,contrastw t organ zat ons

i. Structureincentives,

ii. Reduceuncertaintybyaidingpredictability

.


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CoordinatingconventionsandSocialNorms

Youngsenforcement

mechanisms:i. Sharedexpectationsoncoordination

.

iii. Internalization(beliefinSN)

CConventionsusei;ethicallyneutral,sharedstrategies SN:useiiandiii(&maybei):

behavioralregularityconcerningbehaviortowardsothersthatservesasanethical rescri tionamon some rou

Contextspecific(seatoncrowdedbus) Basu:ESN(ii),PCN(iii),andRLN(iv notconsideralts)


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ProblemsofCoordination&Enforcement Drivinggame;focalpoints;schedulesetc.

4enforcementmechanisms(increasingbreadth)(F72)

Longevity

ModelsofSNenforcement ure n erna za on:wea , n erme a e,s rong

Principledplayersandrationalegoists

Indirectevolutionarymodelmixedtypesstrong

internalizationamongsomereducesfitness Fitnessoutcomesrelatetoroleofreciprocity

Addreci rocalt es workin ro ress ;disci lineres

SNAllowlargergroups


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Chapter8:SecondPartyEnforcement

&EvolutionofSocialNorms

,

incompletecontracting,power,social,

partyenforcement

Adaptivelearningandtheevolutionofsocial

norms mo e s


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Chapter9FormalInstitutionsand

ThirdPartyEnforcement

rd

enforcement

Legitimacyandcrowdingout

Basuon awan econom cs:Lawcanen orceon y

whatinprincipleSN couldindicate;

m son ev a ons romex s ng s DifficultiesofamendingSNandefficienciesoflaw

Implications:whypolicyisdifficult


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PartIVNetworksandDynamicsof

CollectiveAction


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Chapter10NetworksandPolitical

Economy

BasicNetworkTheor :

links,hubs,randomandscalefreemodels Growth,disturbances,diffusion,andstability

FirmsasNetworks

Internalorg,subcontracting&enforcement

Consumerandproducernetworks

MarketsasNetworks

Networks,SpatialLocation,andGrowth Networks,InfluenceandPower


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Chapter11AgentBasedModelsand

thePossibleEmergenceofResolution PrinciplesofAgentBasedModeling

Complexity&theconceptofemergence(Epstein)

EvolutionaryGTandAgentbasedmodeling

Notesonsoftware

Examples Theevolutionofnormsoffairness

Publicgoodsandcollectiveaction

Schellin smodelofresidentialse re ation

Beckersmodelofworkerprejudice Minskysmodeloffinancialcontagion;subprime


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Emergence,collectiveaction,andexchange

enforcement

Distribution,power,andgrowth


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PartVImplicationsonGrowthand

Policy


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Chapter12PolicyandPolitical

Economy

Marketfailure,2nd and3rd Partyenforcement

epo cyprocessasase o s

Advocacycoalitions,punctuatedequilibria,

g , , y u

CAPsandImplementation

Bureaucrats,legitimacy,andsocialnorms

Lawandeconomicsagain


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Polic andnetworks

Coalitions,punctuated

equilibria,

implementation,

diffusion

o cy e o ns u ona eve opmen

Embeddedpolicy:policy,socialnorms,2nd &3rd parties

Polic as remed or im ediment to resolution of CAPs

Design,accident,intended,andunintendedconsequences

Policy,distribution&theproblemofcommitment

Policy,punctuatedequilibria,andpathdependentevolutionofinstitutions

Afew eneral rinci lesfor olic makin


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Chapter13Knowledge,Collective

Action,Institutions,Location&Growth

Implicationsofnonrivalknowledge , , ,

locationofproduction

Povertytraps,growthcircles,anddevelopment GamesandIllustrations

SiliconValle vs.ruralA alachia

MultiplayerAssurance

Agentbasedmodels


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, , ,

Institutionsasthefundamentalsource(AJR)

, ,

Power,distribution,commitment,institutions,

an grow


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Chapter14ConclusionandMoving

Forward

development

thatCAPslieatthefoundationofmarketsuccess,

failureandultimatel the otentialforand ualit ofeconomicdevelopmentandgrowth

Directionsforfuturedevelo ment

Documents

Ferguson Collective-Action and Exchange3