Property and Power
,Property and Power : Mutual Gain and Conflict
Introduction
* Institutions matter for social outcomes (Unit 4)
-
of
Crules the
game
* Institutions can affect the income people receive for their work (Unit 2)
↳ What other factors determine final outcomes ?
L What other criteria can we use to evaluate outcomes ?
↳ How final outcomes ?
can we
improve
In this Unit we'll ...
1) Consider how institutions and power determine outcomes/allocations
using Pareto-efficiency
2) Evaluate these outcomes condition and
fairness criteria
3) Show how policies can
improve outcomes
Institutions and Power
"rules of the game" (written/unwritten)
* Institutions
-
- govern interactions btw individuals
w
-
> provide constraints & incentives
↳
do do it and
especify
who can what , when they can
gameminology how actions of players affect their payoffs
what and
who
gets why
, * Power * the ability to do and
get things we want
wa
in opposition to the intention of others
* Power in voluntary economic interactions takes 2 forms ;
Structural
Bargaining
Power
Power
consider conflicts
When we over how A person exercising bargaining
·
of value divided
something is to be , power may
...
person's is 1) of
a structural power the set the terms an
exchange
take-it-or-leave it
value of their next best alternative .
Leg :
2) impose/threaten to impose
NB : A person's structural power is heavy costs
limited by the structual power
of another
Evaluating institutions and outcomes
To evaluate the outcome of an economic interaction ,
2 ways
- >
Pareto criterion ! Fairness Criterion
Pareto efficiency evaluate based one's concept of
on
justice
-
· -
·
Fairness can be applied to
OR fairness could be applied to the
outcome/allocation rules of the
game
,Property and Power : Mutual Gain and Conflict
Introduction
* Institutions matter for social outcomes (Unit 4)
-
of
Crules the
game
* Institutions can affect the income people receive for their work (Unit 2)
↳ What other factors determine final outcomes ?
L What other criteria can we use to evaluate outcomes ?
↳ How final outcomes ?
can we
improve
In this Unit we'll ...
1) Consider how institutions and power determine outcomes/allocations
using Pareto-efficiency
2) Evaluate these outcomes condition and
fairness criteria
3) Show how policies can
improve outcomes
Institutions and Power
"rules of the game" (written/unwritten)
* Institutions
-
- govern interactions btw individuals
w
-
> provide constraints & incentives
↳
do do it and
especify
who can what , when they can
gameminology how actions of players affect their payoffs
what and
who
gets why
, * Power * the ability to do and
get things we want
wa
in opposition to the intention of others
* Power in voluntary economic interactions takes 2 forms ;
Structural
Bargaining
Power
Power
consider conflicts
When we over how A person exercising bargaining
·
of value divided
something is to be , power may
...
person's is 1) of
a structural power the set the terms an
exchange
take-it-or-leave it
value of their next best alternative .
Leg :
2) impose/threaten to impose
NB : A person's structural power is heavy costs
limited by the structual power
of another
Evaluating institutions and outcomes
To evaluate the outcome of an economic interaction ,
2 ways
- >
Pareto criterion ! Fairness Criterion
Pareto efficiency evaluate based one's concept of
on
justice
-
· -
·
Fairness can be applied to
OR fairness could be applied to the
outcome/allocation rules of the
game
