Cooperation problems writ large. How do a million people work together?
See also democracy etc.
Rabbit and stag game
A game theoretical model of coordination which throws some light on the problems of social coordination. This is pertinent in problems of, e.g. having democracy or of getting peer networks off Facebook. As seen in Duncan Sabien’s Group Rationality musing, and Zvi Mowshowitz on the Facebook exodus problem. Casting it in in these terms is provoking.
Coordination on conflict
Collective action dilemmas for elites
An special case of collective action problem that I pose, which is of interest to me. See e.g. > (Singh 2014).
In the state’s husbandry of the pigs of the economy, one might argue that the prime task is to ensure that said pigs “do not eat where they shit”. Those pigs squeal if you try to tell them what to do, though. It’s their shitpuddle, they worked hard to shit it.
Here I will discuss dilemmas of collective action for corporations; If every business wants highly paid customers and low-paid staff, whose job is it to provide customers? (The obvious solution of corporate tax providing a basic income to an jobless consumer class will be disregarded as politically untenable for now.) If every business wants state-provided infrastructure but must complain about their own personal share of the costs, which businesses are left holding the can? If every business knows that all their peers are lobbying to sell off the state assets for scrap, mightn’t they as well take a piece of the pie rather than be the only ones who were left out of the action?
Can you resolve this through a cartel? Our business won’t whine for special subsidy if yours doesn’t, we all win? I think in this case it might reduce to prisoner’s dilemma.
I should stress that it is incorrect to believe that vested interests do not act to protect their interests. But the specific interests of ‘capital’ at the current juncture of history are very unclear. Consider the lobbying of banks in the United States for further deregulation. Superficially, this presents itself as financial capital lobbying for its interests. But as an investor, I am totally unconvinced that this is in the interests of the shareholders of banks — regulations are barriers to entry (as Jamie Dimon has noted publicly). Deregulation usually results in credit booms, which are bad for the return on capital of the non-financial sector. As Mark and I argue in the book, the era of deregulation destroyed the bargaining power trade unions, but also set capital on a path of war with itself. Amazon, for example, is often presented as some evil capitalist semi-monopoly destroying our precious high streets (and who profited from these?). In practice, it operates as a marauding low-cost threat to all other capitalists with fat margins previously living in peace. Amazon’s valuation is treated as a scandal because it renders Jeff Bezos’s paper profits obscene. But what of the damage to other capitalists caused by a virtually zero cost of capital financing a maniacal blue sky investment philosophy? Warren Buffett correctly observed that the predictable winner from the internet was the consumer — that didn’t stop capital from throwing endless quantities of capital at it.
Social capital. Development version, Bo Rothstein, How the Trust Trap Perpetuates Inequality
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