Entry 17, Tragedy of the Commons Experiment

During the experiment, we had some ideas to start off with which certainly made the experiment more different. We had the idea of conserving the fish, so they can mass produce later on while we only acquire the bare minimum to survive. People did not take too many fish and like I previously stated, Andy quite possibly disrupted the outcome that we originally wanted, but we gained the most in the end. Society does reward those who take the most in the short run, as they can sell the most and become rich and prosperous among the fishing industry. We all did sacrifice for the good of the community as we thought that it would be a good idea to conserve now and gain alot later. Society does reward people like that after as afterwards our fish kept reproducing and all we could do at the end was keep fishing but we couldn't even finish our plate due to the large number of fish that have repopulated. Strategy stayed the same for game two as we were completely prosperous from our first round and we continued to do the same. There were no differences other than the fact that we started to clip more fish as we were scared that we couldn't finish at the last round. There is no way you can maximize both the fishermen's fish and the fish in the pond, if one goes up, the other has to go down. If the fishermen were greedy, the fish in the pond would in response, be less. We are faced with many commons, things like the sofa area will be taken up by many people. Natural resources that are common resources are such things like coal, natural gas, fish stock. Global commons are things like the ocean, the atmosphere and more. Many are not being used to its maximum power as shown in the experiment that the society will actually benefit more if the common resource were not taken up and people were not in pursue of personal interest. 

Entry 16 Game Theory and Chicken

  I believe that people make decisions base on their self interest. This is a hands down no questions asked assumption, just from daily living, you can tell people act on self interest and so sometimes acting in self interest is not always a rational choice. Rational choices are the ones that are compared with cost and benefits and taking the one that has the most benefit with the least cost to be executed, however sometimes people don't always make the most rational choice for the society, but chooses the one that is the most benefit for themselves. I think that the bad outcome is always inevitable, as people will and always WILL act on self interest. Whoever would act on someone else's interest would be a saint. I think it could happen sometimes, if the loyalty shared between two people are so great that they would be willing to give up their own self interest for the other individual. When no one confesses is the best outcome, but that is highly unachieveable considering everyone acts on their own self interest. If no one gets the girls, it is actually best for the society, if everyone just were not trying to get the single blonde one and went with the friend, it will be the best outcome for society, just like the prisoners dilemma where two people giving up not saying anything will be in the society's best interest rather than both confessing which is the bad outcome for the society.  I think personally I would do the same, of course self interest rises above of other people, why in anyone's right mind would you want to do something great for someone else while you lose some things. I believe that the society acts like this as a whole, therefore creating many bad outcomes. 

Entry 15: What is a Monopoly?

The three main characteristics of a monopoly would be that there is only one seller, a unique product and barriers to entry. Given the examples of the diamond industry, from companies such as Debeers, monopolies will set prices differently and have a different output than Perfect Competition. They will chose to set the number of diamonds where marginal cost equals marginal revenue and then charge the monopoly price at that point. Which at that point, will turn out to be the most money the monopoly can charge for that many diamonds. Many people believe that the consumers lose their surplus to the monopolies as it gets transferred in a monopolistic society, and with a higher price than a market with multiple firms, but actually the economists don't like is the lack of efficiency monopoly creates as certain monopolies aren't trying to maximize output, and therefore economists are trying to promote those monopolies in which the single seller will be more efficient than other people, as they are the most skilled, and the one that got there first. Monopolies can be good as if the average cost is decreasing in output, and there are advantages to large scale manufacturing and production, which is a monopoly, a one seller. Benefits of a monopoly includes innovation and research capabilities a monopoly can withstand, as they will have patents to protect their innovation and further more encourage more inventions, but they have the cost of having to be charged highly as there is only one seller in the market. I think it is not worth it to maintain a monopoly given that they have to spend their surplus earned from consumers on things such as more advertisements to pull in more consumers and therefore not receiving alot of surplus and will create an inefficiency in the market.