GVPT Spring 1994 FORMAL THEORIES OF POLITICS II Tydings 0102 or WH 1127; Weds 2:30-6:15pm

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1 GVPT Spring 1994 FORMAL THEORIES OF POLITICS II Tydings 0102 or WH 1127; Weds 2:30-6:15pm PROFESSOR OPPENHEIMER phones: , (before 10 pm) office hrs: TUES 2:30-4:30 (Tydings 3140C) 832 is a second semester course in "formal" (i.e. mathematically formulated or expressed) theories of political behavior. It is a survey which covers game theory (theories of non-cooperative bargaining; and theories of coalitions), expansions of material on social choice (to issues of liberalism and efficiency), and the sorts of distributive outcomes one can expect from differing arrangements and how these relate to differing notions of justice. Students should have either the first semester course (or equivalent), a course in calculus, or a course in logic. The theories are all based on (i.e. derived from) psychological assumptions consistent with rational behavior as used in micro-economics. They include not only those of ordinal preference theory, but also those of utility theory. In the first semester, these axioms were introduced. In the process of developing the axioms and their implications, you spent some time looking at collective action (i.e. public goods), and collective choice (Arrow problems, and majority rule in spatial contexts), and spatial voting models. To do these things, you looked at some parts of two person game theory such as Prisoner Dilemma Games. TOPICS: This semester, we shall develop our applications of these basic tools into new areas. 1. We start with a brief review of preference and social choice theory, with an extension of a number of topics to refresh our understanding of their formal properties and how they fit into a broader theoretical concern. We emphasize their implications for politics. These include: A. The liberal paradox and its connections to the structure of Pareto optimality and to social choice as defined by Arrow; and to prisoner dilemma games. B. The testing of the simple game theoretic models (regarding prisoner dilemmas and then also the core) via experiments. C. The general non-existence of the core in competitive and other (e.g. social choice) games and its implications. This leads us to consider the possibility of substitutes and extensions of the core to deal with these failures. 2. We then move to some important political questions which were raised by the earlier material, but which have not yet been pursued in the curriculum. These include: A. What determines the outcomes of bargains, and which are the predictable outcomes; and more generally, what can we expect from cooperative behavior? B. Which political coalitions we can expect to form; and what are their properties. We will apply this material to many situations, including voting games. C. Examining bargaining, and the deals made to hold coalitions together will force our attention to turn to notions of fairness in distribution and in bargaining: i.e. how much should each individual get? 3. This forces us to consider whether we can get around the issue of fairness by considering more market like, and less "political" mechanisms. Certainly, we can ask when efficiency can be achieved by some of those mechanisms. Specifically:

2 A. What exactly are the implications of rationality for the results of markets? B. How one might get market like efficiency when people are struggling over public, rather than private, goods? C. Can one develop "market like" properties by setting up special institutions to aggregate preferences? Or can we do it by permitting citizens to freely migrate between political jurisdictions? These topics are partially handled by the theories of demand revelation and of clubs. Surprisingly, perhaps, these also lead us directly to questions of distributive justice. 4. We then pursue the topic of distributive fairness directly: A. What is the nature of distributive justice, if we accept preferences as its basis? B. Should rationality, or rational self-interest be the starting point for such analyses? At least according to some scholars (Sen, Baier etc.) these constitute questionable starting points for ethical analysis. This possible line of criticism goes deep, and C. gives us occasion to reconsider some of the behavioral assumptions at the foundation of the theories. PAPERS: We end the semester by letting each of you present a research design of a test, or an extension, or an application of a proof from some of the material of the 2 semesters to an area of interest to you. For those taking the course for credit, half of your grade will depend upon this (split on the first draft, presentation and last draft of the paper). After the first draft (due 4/13) is handed back with comments, you will present the material, and after discussion, you will be expected to rework the paper, and write it up as a semester paper. In this, length is not a virtue: quality and care of thought are. The final paper is to be handed in, typed, no later than Wednesday, May 11. All the regularly enrolled students will also take a final exam. The time for the exam will be arranged at everyone's convenience. Study guides and questions will be made available in April. Course grading: 20% on class discussion 20% on 5 mandatory exercises (but only 3 are specified now, 1 today, 2 in syl.) 45% on final RD paper, (9% on first draft, 13.5% on presentation, 22.5% on final draft) 15% final exam Only Axelrod and Ordeshook are required texts. The many articles will be available from BelJean in unbound xeroxes. I recommend they be purchased, even though they are likely to cost more than $100. For those interested, the following books are useful reading in this course, and may be useful to purchase as general reference works or classics in the field: (Those with an * are not generally available but are occasionally around, while those with a + are on reserve at the graduate reserve desk.) Axelrod, Robert. (1984). The Evolution of Cooperation. Basic Books. New York. One of our basic texts. Ordeshook, Peter C. (1986). Game Theory and Political Theory. Cambridge University Press. One of our basic texts. +*Barry and Hardin, Rational Man and Irrational Society. Sage. ISBN a collection of essays on collective action, majority rule and social choice. We will read many of them but they are also all available in journals. However, the editors of the volume added solid, short, interpretative essays to help the under understand each of the technical pieces. I recommend all purchase this volume. +*Hirschman, A.O. Exit Voice and Loyalty, Harvard, 1970, ISBN an interesting theoretical and nontechnical analysis of the causes and consequences of

3 political migration. You will be given a choice of readings and this may be one of them. +*Luce and Raiffa, Games and Decisions. Wiley, This is the old standard text for game theory and a must for the first semester course. We will use one chapter. It is expensive ($29.50) (or not even available, as it is out of print) but excellent as a first solid text. +*Margolis, Howard Selfishness, Altruism, and Rationality -- A new look at the relationship between rationality and self-interest. Not bad but pricey. +*Mueller, D. Public Choice II. Cambridge Univ Press, Cambridge, UK not expensive, useful but not essential for purchase. Soon to be released as a better book in an updated edition. +Niskanen, Wm. A. Jr. (1971) Bureaucracy and Representative Government. Aldine: Chicago. +Nozick, Robert (1974) Anarchy, State and Utopia, New York: Basic Books. +*Rapoport, Anatol (1966) Two-Person Game Theory: The Essential Ideas. Ann Arbor: University of Michigan Press. -- a good deal for a clear exposition of 2 person theory. Solid material on bargaining. Not as good as Luce and Raiffa. Currently out of print. +*Rapoport, Anatol. (1970) N-Person Game Theory: Concepts and Applications. Univ of Michigan Press: Ann Arbor, (esp. good on the origins and limitations of the characteristic function and the solution concepts.) +Rawls, John (1971) A Theory Of Justice, Cambridge: Harvard University Press. +Sen, A. K. Collective Choice and Social Welfare. Holden Day -- This will be one of the major texts and thus might be purchased. +*Sen, A. K. On Economic Inequality. One of my favorite little books in political science. This one is a beaut and chocked full of information of value to all of us interested in distributive questions. +*Shubik, M. Game Theory in the Social Sciences. MIT. Press, Cambridge, Mass A bit more advanced as a text. Interesting treatment of the material. Also available at the reserve desk are: +French, Simon. (1986) Decision Theory: An Introduction to the Mathematics of Rationality. Ellis Horwood, Ltd. Chichester, UK. Chap. 9 "Measurement, Modelling and Interpretation." +Miller, G. (1981) Cities By Contract: The Politics of Municipal Incorporation. MIT: Cambridge. +Public Choice, Vol. XXIX, no. 2. Special supplement to Spring 1977, on alternative demand revealing procedures. ASSIGNMENTS (+ are available at the res. desk): #I. REVIEW OF ESSENTIALS: EXTENSIONS OF OLD ARGUMENTS. (3 WEEKS) -- GVPT Spring p. 3 --

4 1/19 - Reviewing the Preference, Pareto Material: Extending Arrow - Liberal Paradox Sen, Collective Choice and Social Welfare, Ch. 6 & 6* Sen, "Liberty, Unanimity and Rights," Economica v. 43 (8/76): Hammond, Thomas H. and Gary J. Miller. "A Social Choice Perspective on Expertise and Authority in Bureaucracy." American Journal of Political Science, vol 29, No. 1, Feb. 1985: pp Miller, N. "Social Preference and Game theory: A comment on the dilemmas of a Paretian Liberal," Public Choice 30, 1977: And comment, Aldrich, John. "Liberal Games: Further Comments on Social Choice and Game Theory." Public Choice 30, 1977: pp French, Simon. (1986) Decision Theory: An Introduction to the Mathematics of Rationality. Ellis Horwood, Ltd. Chichester, UK. Chap. 9 "Measurement, Modelling and Interpretation." Exercise: Pick a political institution of interest to you. Show (briefly, shouldn't take more than 1-3 pages) in what way it exhibits a liberal paradox problem. Bernholz, P. "Liberalism, Logrolling and Cyclical Group Preferences," Kyklos v. 29 (1976): Bonner, John Introduction to the Theory of Social Choice Chap. 11. Miller, N. "Pluralism and Social Choice," American Political Science Review 77 (1983): Sen, A. K. (1970), The Impossibility of a Paretian Liberal." Journal of Political Economy. vol 78 (Jan / Feb), pp Potential Research Frontiers: What are the general costs of the values which underlie Western Democracies? There are very few works which deal with any of these questions. But, quite obviously, this is one of the important questions for a less one-sided argument regarding political arrangements. It is the implicit question in Arrow and Sen. 1/26 & 2/2 (two weeks): 2 Person Games - PDG Extensions and Tests Axelrod, Robert. (1984). The Evolution of Cooperation. Basic Books. New York. Read at least Chaps. 1-3; 5; 8-9, and Appendix B on proofs. Bator, F.(1957) "The Simple Analytics of Welfare Maximization," AMERICAN ECONOMIC REVIEW (March): (reprinted in Breit and Hochman, ) -- GVPT Spring p. 4 --

5 Exercises: +Mueller, Public Choice II, (p ), Chapter 7 & 4 (Library reserve, and xerox packet) Swistak, Piotr (1994) Theories and Models: Essays on the Uses of Models in Constructing Theories of Rational and Social Choice: from Arrow's Theorem to the Evolution of Cooperation. book mss. Univ of Md.: College Park. (mimeo) Chap. 5. Schelling, Thomas C. (1978) "Hockey Helmets" in Micromotives and Macrobehavior. New York: W.W. Norton. Smith, Vernon L. "Experimental Economics: Induced Value Theory." American Economics Association. Papers and Proceedings. May 1976, v. 66 No. 2. pp (in the xerox packet or on reserve) Isaac, R. Mark, James M. Walker, Susan H. Thomas, (1984) "Divergent Evidence on Free Riding: An Experimental Examination of Possible Explanations." PUBLIC CHOICE, 43, (in the xerox packet or on reserve) Isaac, R. Mark, Kenneth F. McCue and Charles R. Plott, (1985), "Public Goods Provision in an Experimental Environment," Journal of Public Economics, 26, (in the xerox packet or on reserve) Plott, Charles R. (1990). "Will Economics Become an Experimental Science?" Presidential address for the annual meeting of the Southern Economics Association, New Orleans, November, Reprinted as California Institute of Technology Social Science Working Paper #758. Plott, Charles R. "Externalities and Corrective Policies in Experimental Markets." The Economic Journal, 93 (March, 1983), Kanigel, Robert (1986), Apprentice to Genius: The Making of a Scientific Dynasty. Macmillan: Assignment #1: (next week) Pick a collective action problem of interest to you. Show it to be a problem in the supply of public goods. Discuss how the properties of public goods lead you to develop hypotheses about the problem. Assignment #2: (due in 2 weeks) develop a research design (of an experiment) to test a particular aspect of the PD problem you identified last time. Make sure you can understand the interplay between the production functions, and the utility functions, etc. For All Practical Purposes, The Prisoner Dilemma and Chicken Game video tape, available at the non print media desk of Hornbake Library. Brams, Steven J. & D. Marc Kilgour. (1987) "Threat Escalation and Crisis Stability: A Game-theoretic Analysis." American Political Science Review, v. 81, No. 3 (Sept.): pp Application of Chicken games to strategic problems. Potential Research Frontiers: -- GVPT Spring p. 5 --

6 What is the role of experiments in political science research? Is Smith correct that experiments require incentive compatibility? Is this true for in class simulations as well? What is its role in pedagogy? How does this effect our thinking about curricula, and other matters? #II. COOPERATIVE 2 & N PERSON GAMES (5 WEEKS) 2/2: CHARACTERISTIC FUNCTIONS, COOPERATION & COALITIONS Ordeshook, Chap. 7 (Along the way, be sure to pick up an understanding of such terms as SIMPLE & STRONG games). You can skip or skim lightly section Shubik, Ch. 6 to p Exercises: +Rapoport, Anatol. (1970) N-Person Game Theory: Concepts and Applications Univ of Michigan Press: Ann Arbor, (esp. p ). Ordeshook, Chap. 8 (to p. 353) 2/9: The Core (2 weeks) +Shubik, Chapter 6, (p ; ). (xerox packet) Laing, James D. and Benjamin Slotznick. (1990). "The Pits and the Core: Simple Collective Decision Problems with Concave Preferences." Public Choice. Vol. 66, No. 3: A. Go back to spatial voting. Demonstrate that the core of a 3 person spatial voting game is the triangle of the bliss points. B. Prove that the core doesn't exist for a zero sum or redistributional game. Potential Research Frontiers: To what extent is the classic definition of politics (who gets what when and how) indicating that at root politics is often close to zero sum and thus there is no core? What is the importance of this finding for the limitations of democratic (and other "desirable") forms of government? Ordeshook (p ) 2/16: The Core - II - Experimental Tests Fiorina, M. P. and C. R. Plott (1978) "Committee Decisions under Majority Rule: An Experimental Study." American Political Science Review, 72 (June, 2): (xerox packet) -- GVPT Spring p. 6 --

7 Aivazian, V.A. and Jeffrey L. Callen, "The Coase Theorem and the Empty Core." Journal of Law and Economics, v. 24: ; Eavey, Cheryl L. and Gary J. Miller. (1984). "Fairness in Majority Rule Games with Core." AMERICAN JOURNAL OF POLITICAL SCIENCE, 28: Plott, Charles R. (1979) "The Application of Laboratory Experimental Methods to Public Choice," in Russell, ed. Collective Decision Making: Baltimore, Johns Hopkins Press (for RFF) (in the xerox packet or on reserve) McKelvey, Richard D. & Peter C. Ordeshook, (1981) "Experiments on the Core." Journal of Conflict Resolution, v. 25 (no. 4, Dec.): ; Hoffman, Elizabeth & Matthew Spitzer. "Experimental Tests of the Coase Theorem with Large Bargaining Groups." Journal of Legal Studies, 15: Potential Research Frontiers: Little other research has really been done on the general limits of the core (when it exists) as a predictor. The PD game is just a hint of what promises to be a pretty serious question regarding the general properties generating instability of the core. Ordeshook, Chap. 9. 2/23 & 3/2: Alternatives to the Core: The Bargaining Set, and Competitive Solution McKelvey, R. D. Peter C. Ordeshook, and Mark D. Winer (1978). "The Competitive Solution for n-person Games without Transferable Utility." American Political Science Review. 72: Oppenheimer, Joe A. (1979) "Outcomes of Logrolling in the Bargaining Set and Democratic Theory: Some Conjectures," PUBLIC CHOICE 34: Niou, Emerson M. S. and Peter C. Ordeshook, "A Theory of the Balance of Power in International Systems." Journal of Conflict Resolution. V. 30, No. 4, December, 1986 (pp ). Eavey, C. & G. Miller, "Bureaucratic Agenda Control: Imposition or Bargaining?" American Political Science Review, 78, September, 1984: Rapoport, Anatol (1970). N-Person Game Theory: Concepts and Applications, Chaps. 6, 7, 9. The original papers defining the Bargaining Set solution concept are not overly difficult and are extraordinarily interesting. See Aumann and Maschler, "The Bargaining Set for Cooperative Games," in Dresher, Shapley, and Tucker, Advances in Game Theory. -- GVPT Spring p. 7 --

8 +Niskanen, Wm. A. Jr. (1971) Bureaucracy and Representative Government. Aldine: Chicago. Potential Research Frontiers: What are the best theoretical descriptions of coalitional questions? - Does it vary as we change context? Look, here, at some of the current work of G. Miller and C. Eavey. How to choose among good theories - the role of experimentation. #III. EFFICIENCY and EQUITY: Interconnections in Politics via Public Goods - two weeks 3/9 & 23: Clubs and other Demand Revealing Processes & Questions of Distributive Justice +Mueller, Public Choice, Chapters 4-9 (Library reserve, and xerox packet) On alternative (Demand Revealing) Mechanisms: Brams, S. and P.C. Fishburn (1978) "Approval Voting," American Political Science Review No. 3, v. 72, Buchanan, "An Economic Theory of Clubs" Economica 32 (2/65): 1-14 Ellickson, Bryan (1973) "A Generalization of the Pure Theory of Public Goods," American Economic Review 63 (June): Hirschman, Exit, Voice and Loyalty, Chaps. 2-7 D. Mueller, "Voting by Veto," Journal of Public Economics, 1978, Public Choice, vol. XXIX-2, Special Supplement to Spring 1977, especially introduction (Tideman), Groves and Ledyard, paper 10; Tideman and Tullock, paper 11, and Tullock #9. N. Tideman and G. Tullock, "A New and Superior Process for Making Social Decisions," Journal of Political Economy 84 Dec. 1976, V. Smith, "Experiments with a Decentralized Mechanism for Public Good Decision," American Economic Review, 70 (4,1980): Sandler and Tschirhart, "The Economic Theory of Clubs," JEL 18 (12, 1980): Tiebout, C.M. "A Pure Theory of Local Expenditures, Journal of Political Economy 64 (10/56): Roberts, Russell D. (1985) Altruism, and the Design of Government Transfer Programs mimeo. Roberts, Russell D. (1987) "Financing Public Goods." Journal of Political Economy 29 (April): -- GVPT Spring p. 8 --

9 Roberts, Russell D. (1986) Should Tax revenue be Minimized when Financing Public Goods? Working Paper in Economics E-86-46, Hoover Institution, Stanford University August. Clarke, Ed. H., "Some Aspects of the Demand Revealing Process," Public Choice, 29, - supplement Spring 1977, Groves and Ledyard, Some Limitations of Demanding Revealing Processes," in Public Choice, vol. XXIX-2, Special Supplement to Spring 1977: Groves, T. and Ledyard, J., "Optimal Allocation of Public Goods: A Solution to the 'Free Rider' Problem," Econometrica, 45 May 1977, Miller, Cities by Contract, Ch. 9 & Appx. Potential Research Frontiers: Does this require that we reexamine the other demand revelation techniques with an eye to their redistributive consequences? Can we develop experimental tests of these institutional designs to see how they might perform? What can we say about the use of quasi markets for the implementation of social decisions about public goods? Does this literature say anything of use about the development of a serious future rationale of socialism? #IV. FAIRNESS and JUSTICE in OUTCOMES - 3 weeks 3/30: Some Underpinnings +Sen, Collective Choice and Social Welfare, ch. 5 +Sen, On Economic Inequality, Chaps. 1, 4 +Rawls, A Theory of Justice, Sections 1-4, 8, 10-26, 29 Harsanyi, John C. (1975) "Can the Maximin Principle Serve as a Basis for Morality? A Critique of John Rawls' Theory." American Political Science Review v. 69 No.2, March: Cowen, Tyler. "Consequentialism Implies a Zero Rate of Intergenerational Discount." Peter Laslett and James S. Fishkin, eds. (1992). Justice Between Age Groups and Generations Groups and Generations. pp New Haven: Yale University Press. 4/6: The Controversies and Alternatives +Nozick, Anarchy, the State and Utopia, pp & Chaps. 7 & 8 Howe, Roger E. and John E. Roemer. "Rawlsian Justice as the Core of A Game." American Economic Review 5, December: GVPT Spring p. 9 --

10 Plott, C. "Rawls' Theory of Justice: An Impossibility Result," in Hans W. Gottinger and Werner Leinfellner (eds.), Decision Theory and Social Ethics, Issues in Social Choice. (Reidel Publ. Dordrecht, Holland, 1978): Wittman, Donald. (1979) "Diagrammatic Exposition of Justice," Theory and Decision v. 11 (2): Sen, On Economic Inequality, pp Varian, H.R. "Distributive Justice, Welfare Economics, and the Theory of Fairness." Philosophy and Public Affairs, v. 4 (Sp. 75): Grey, T.C. "Property and Need: The Welfare State and Theories of Distributive Justice." Stanford Law Review, v. 28 (No. 5, 5/76): Philpotts, Geoffrey. (1985) "Potentially Fair and Efficient Allocations." mimeo. Hamada, "A Simple Majority Rule on the Distribution of Journal of Economic Theory, 1973: Rae, Douglas. (1975) "Maximin Justice and an Alternative Principle of General Advantage," American Political Science Review 69: Rawls, Sections 31-39, 55-59, 82 4/13: A Positive Side to the Issue? Research papers 1st draft due Soltan, Karol E. (1982), "Empirical Studies of Distributive Justice," Ethics, v.92 (July): Frohlich, Norman and Joe A. Oppenheimer "Structuring Observation in Moral Realist & Cognitive Theories." Frohlich, Norman and Joe A. Oppenheimer (1990) "Choosing Justice in Experimental Democracies with Production," American Political Science Review, v. 84, #2 (June): pp Presented at Public Choice Society 1988 Annual Meeting. San Fran. Hoffman, E. and M. Spitzer, "Entitlements, Rights, and Fairness: An Experimental Examination of Subjects' Concepts of Distributive justice," Journal of Legal Studies, June 1985, 14: Sen, On Economic Inequality Ch. 2-3 Hochschild, J. (1981), What's Fair? American Beliefs about Distributive Justice. Frohlich, Norman and Joe A. Oppenheimer (1992). CHOOSING JUSTICE: An Experimental Approach to Ethical Theory. Berkeley: California University Press. -- GVPT Spring p

11 Frohlich, Norman and Joe A. Oppenheimer. (1990) "Redistributive Politics: A Theory of Taxation for an Incumbent in a Democracy." Public Choice 64: Strotz, "How Income Ought to be Distributed" Journal of Political Economy v. 66 (6/58) Wagner, R.H. "Impartiality and Equity," Theory and Decision v. 12 (1980): Potential Research Frontiers: What is the proper relationship between empirical and normative work on justice? Is there a specifiable role to be played by experiments in the study of distributive justice? How do our political arrangements relate to questions of distributive justice? #V. FAIRNESS and SELF INTEREST On Self Interest: 4/20: On Self Interest & Rationality Margolis, H. Selfishness, Altruism, and Rationality. Chaps. 1-5 & Appx A, B, C. Frohlich & Oppenheimer, "Beyond Economic Man" Journal of Conflict Resolution, Frohlich, "Self Interest or Altruism, What Difference?" Journal of Conflict Resolution v. 18, no. 1 (1974): Preston, Lee E. (1961) "Utility Interactions in a Two-Person World," Journal of Conflict Resolution. v. 5, #4 pp Sen, A.K. "Rational Fools: A Critique of the Behavioral Foundations of Economic Theory," (1976) Philosophy and Public Affairs v. 6 (no. 4, Summer): Sen, A.K., (1979) "Personal Utilities and Public Judgements," Economic Journal, On Rationality: Quattrone, George A. and Amos Tversky, (1988) "Contrasting Rational and Psychological Analyses of Political Choice." American Political Science Review. (82, NO. 3 SEPT.) Grether, David M. and Charles R. Plott, (1979) "Economic Theory of Choice and the Preference Reversal Phenomenon," American Economic Review, 69 (September): Machina, Mark J. (1989) "Dynamic Consistency and Non-Expected Utility Models of Choice Under Uncertainty." Journal of Economic Literature Vol. XXVII (Dec. 1989): GVPT Spring p

12 Barbera, Salvador and Prasanta K. Pattanaik, 1984 "Extending an Order on a Set to the Power Set: Some Remarks on Kannai and Peleg's Approach." Journal of Economic Theory. 32, Goldstein, William M. and Hillel J. Einhorn (1987), "Expression Theory and the Preference Reversal Phenomena." Psychological Review, Vol. 94, No.2 pp Kahneman, D. and Tversky, A. (1979), "Prospect Theory: an Analysis of Decision Making Under Risk." Econometrica 47 (March): Kahneman D. and A. Tversky (1982), "The Psychology of Preference," Scientific American, 246 (January): Machina, Mark J. (1987) "Choice Under Uncertainty: Problems Solved and Unsolved," J of Econ. Perspectives, Vol 1, #1 (Summer): Machina, Mark J. (1987) "Choice Under Uncertainty: Problems Solved and Unsolved," Tversky, A. and D. Kahneman (1981) "The Framing of Decisions and the Psychology of Choice," SCIENCE 221 (Jan. 30): Loewenstein, George and Drazen Prelec. "Anomolies in Intertemporal Choice: Evidence and and Interpretation." in Lowenstein, George and Jon Elster, eds. (1992). Choice over Time. pp New York: Russell Sage Foundation. Potential Research Frontiers: What conditions bring out self interest? What conditions bring out other interests? Can we develop a more general model of rational egoism? 4/27 and 5/4: Presentation of Student Research Papers If needed, we will schedule an extra session to complete the presentations. Bibliography - Required Items Aivazian, V.A. and Jeffrey L. Callen, (1981) "The Coase Theorem and the Empty Core." Journal of Law and Economics v.24: Axelrod, Robert. (1984). The Evolution of Cooperation. Basic Books. New York. Barry and Hardin, (1982) Rational Man and Irrational Society. Sage. Swistak, Piotr (1994) Theories and Models: Essays on the Uses of Models in Constructing Theories of Rational and Social Choice: from Arrow's Theorem to the Evolution of Cooperation. book mss. Univ of Md.: College Park. (mimeo) Chap. 5. Buchanan, James. "An Economic Theory of Clubs," Economica 32 (2/65): Cowen, Tyler. "Consequentialism Implies a Zero Rate of Intergenerational Discount." Peter Laslett and James S. Fishkin, eds. (1992). Justice Between Age Groups and Generations Groups and Generations. pp New Haven: Yale University Press. -- GVPT Spring p

13 Eavey, C. & G. Miller, "Bureaucratic Agenda Control: Imposition or Bargaining?" American Political Science Review, 78, September, 1984: Eavey, Cheryl L. and Gary J. Miller. (1984). Fairness in Majority Rule Games with Core. AMERICAN JOURNAL OF POLITICAL SCIENCE, 28: Ellickson, Bryan (1973) "A Generalization of the Pure Theory of Public Goods," American Economic Review 63 (June): Fiorina, M. P. and C. R. Plott (1978), "Committee Decisions under Majority Rule: An Experimental Study." American Political Science Review, 72 (June, 2): French, Simon. Decision Theory: An Introduction to the Mathematics of Rationality. Ellis Horwood, Ltd. Chichester, UK. Chap. 9 "Measurement, Modelling and Interpretation." Frohlich, N. and J. Oppenheimer, w Pat Bond and Irvin Boschman. (1984) "Beyond Economic Man." J of Conflict Resolution v. 28, no. 1, March, 1984: Frohlich, Norman and Joe A. Oppenheimer (1990) "Choosing Justice in Experimental Democracies with Production" American Political Science Review, v. 84, #2 (June): pp Presented at Public Choice Society 1988 Annual Meeting. San Fran. Frohlich, Norman and Joe A. Oppenheimer "Structuring Observation in Moral Realist & Cognitive Theories," (mimeo). To be presented at the Annual Meetings of the American Political Science Association, Washington, D.C.: September, Grether, David M. and Charles R. Plott, (1979) "Economic Theory of Choice and the Preference Reversal Phenomenon," American Economic Review, 69 (September): Hammond, Thomas H. and Gary J. Miller. "A Social Choice Perspective on Expertise and Authority in Bureaucracy." American Journal of Political Science, vol 29, No. 1, Feb. 1985: pp Harsanyi, John C. (1975) "Can the Maximin Principle Serve as a Basis for Morality? A Critique of John Rawls' Theory." American Political Science Review 69: Hirschman, A.O. (1970) Exit Voice and Loyalty, Harvard: Cambridge, Mass. Hoffman, E. and M. Spitzer, "Entitlements, Rights, and Fairness: An Experimental Examination of Subjects' Concepts of Distributive justice," Journal of Legal Studies, June 1985, 14: Hoffman, Elizabeth & Matthew Spitzer. "Experimental Tests of the Coase Theorem with Large Bargaining Groups." JOURNAL OF LEGAL STUDIES, 15: Howe, Roger E. and John E. Roemer. (1981) "Rawlsian Justice as the Core of a Game." American Economic Review 71, #5 December: Isaac, R. Mark, James M. Walker, Susan H. Thomas, (1984) "Divergent Evidence on Free Riding: An Experimental Examination of Possible Explanations." PUBLIC CHOICE, 43, Isaac, R. Mark, Kenneth F. McCue and Charles R. Plott, (1985), "Public Goods Provision in an Experimental Environment," Journal of Public Economics, 26, Bibliography, GVPT 832, Spring 94 Page 13

14 Kanigel, Robert (1986), Apprentice to Genius: The Making of a Scientific Dynasty. Macmillan: Laing, James D. and Benjamin Slotznick. (1990). "The Pits and the Core: Simple Collective Decision Problems with Concave Preferences." Public Choice. Vol. 66, No. 3: Luce, Duncan and Howard Raiffa, (1957) Games and Decisions. NY: Wiley. (reprinted: NY: Dover, 1985) Machina, Mark J. (1989) "Dynamic Consistency and Non-Expected Utility Models of Choice Under Uncertainty." Journal of Economic Literature Vol. XXVII (Dec. 1989): Margolis, Howard. (1982) Selfishness, Altruism, and Rationality. Cambridge: Cambridge. McKelvey, R. D. Peter C. Ordeshook, and Mark D. Winer (1978). "The Competitive Solution for n-person Games without Transferable Utility." American Political Science Review. 72: McKelvey, Richard D. & Peter C. Ordeshook, (1981) "Experiments on the Core." Journal of Conflict Resolution. v. 25 (no. 4, Dec.): Miller, G. "Is the Invisible Hand Biased?" (Ch. 8 in Cities By Contract: pp ). Miller, N. R. "Social Preference and Game theory: A comment on the Dilemmas of a Paretian Liberal," Public Choice 30, 1977: Mueller, Dennis C. (1989). Public Choice II. Cambridge Univ Press, Cambridge, UK. Niou, Emerson M. S. and Peter C. Ordeshook, "A Theory of the Balance of Power in International Systems." Journal of Conflict Resolution. V. 30, No. 4, December, 1986 (pp ). Nozick, Robert (1974) Anarchy, State and Utopia, New York: Basic Books. Oppenheimer, Joe A. (1979) "Outcomes of Logrolling in the Bargaining Set and Democratic Theory: Some Conjectures," PUBLIC CHOICE 34: Ordeshook, Peter C. (1986) Game Theory and Political Theory. Cambridge University Press. Plott, Charles R. "Externalities and Corrective Policies in Experimental Markets." The Economic Journal, 93 (March, 1983), Plott, Charles R. "Rawls's Theory of Justice: An Impossibility Result." in Hans W Gottinger and Werner Leinfellner (eds.), Decision Theory and Social Ethics, Issues in Social Choice. (Reidel Publ.: Dordrecht, Holland, 1978): Plott, Charles R. (1990). "Will Economics Become an Experimental Science?" Presidential address for the annual meeting of the Southern Economics Association, New Orleans, November, Reprinted as California Institute of Technology Social Science Working Paper #758. Plott, Charles R. (1979) "The Application of Laboratory Experimental Methods to Public Choice," in Russell, ed. Collective Decision Making: Baltimore, Johns Hopkins Press (for RFF) Bibliography, GVPT 832, Spring 94 Page 14

15 Quattrone, George A. and Amos Tversky, (1988) "Contrasting Rational and Psychological Analyses of Political Choice." AMERICAN POLITICAL SCIENCE REVIEW. (82, NO. 3 SEPT.) Rawls, John (1971) A Theory Of Justice, Cambridge: Harvard University Press. Sen, A. K. (1970), The Impossibility of a Paretian Liberal." Journal of Political Economy. vol 78 (Jan / Feb), pp Sen, A. K. (1973) On Economic Inequality. Norton: N.Y. Sen, A.K. (1970) Collective Choice and Social Welfare. North Holland: New York. Sen, Amartya (1976) "Liberty, Unanimity and Rights," Economica v. 43: (August): Shubik, M. (1982) Game Theory in the Social Sciences. MIT.Press, Cambridge: Mass. Smith, Vernon L. "Experimental Economics: Induced Value Theory." American Economics Association. Papers and Proceedings. May 1976, v. 66 No. 2. pp Soltan, Karol E. (1982), "Empirical Studies of Distributive Justice," Ethics v.92 (July): Swistak, Piotr (1994) Theories and Models: Essays on the Uses of Models in Constructing Theories of Rational and Social Choice: from Arrow's Theorem to the Evolution of Cooperation. book mss. Univ of Md.: College Park. (mimeo) Chap. 5. Tiebout, "A Pure Theory of Local Expenditures, Journal of Political Economy 64 (10/56): Varian, H.R. "Distributive Justice, Welfare Economics, and the Theory of Fairness." Philosophy and Public Affairs v. 4 (Sp. 75): Wittman, Donald. (1979) "Diagrammatic Exposition of Justice," Theory and Decision. v. 11 (2): (1980): also: 1983 "A Mathematical Survey of Justice: Applications of Utility Theory to Justice." As Unit #390 in Undergraduate Mathematics and its Applications Project: EDC/UMAP: Newton Mass. Bibliography - Recommended Items Aumann, R. J. and Maschler (1964). "The Bargaining Set for Cooperative Games." in M. Dresher, L.S. Shapley, and R. Tucker, ADVANCES IN GAME THEORY. Princeton, N.J.: Princeton Univ. Press, pp Bator, F.(1957) "The Simple Analytics of Welfare Maximization," AMERICAN ECONOMIC REVIEW (March): (reprinted in Breit and Hochman, ) Bernholz, P. "Liberalism, Logrolling and Cyclical Group Preferences," Kyklos v. 29 (1976): Bonner, John (1986) Introduction to the Theory of Social Choice. John Hopkins University Press: Baltimore. Brams, S. and P.C. Fishburn (1978) "Approval Voting," American Political Science Review No. 3, v. 72, Bibliography, GVPT 832, Spring 94 Page 15

16 Brams, Steven J. & D. Marc Kilgour. (1987) "Threat Escalation and Crisis Stability: A Gametheoretic Analysis." American Political Science Review, v. 81, No. 3 (Sept.): pp Clarke, Ed. H., "Some Aspects of the Demand Revealing Process," Public Choice, 29, - supplement Spring 1977, Frohlich, N. "Self Interest or Altruism, What Difference?" Journal of Conflict Resolution v. 18, no. 1 (1974): Frohlich, Norman and Joe A. Oppenheimer (1992). CHOOSING JUSTICE: An Experimental Approach to Ethical Theory. Berkeley: California University Press. Frohlich, Norman and Joe A. Oppenheimer. (1990) "Redistributive Politics: A Theory of Taxation for an Incumbent in a Democracy." Public Choice 64: Goldstein, William M. and Hillel J. Einhorn (1987), "Expression Theory and the Preference Reversal Phenomena." Psychological Review, Vol. 94, No.2 pp Grey, T.C. "Property and Need: The Welfare State and Theories of Distributive Justice." Stanford Law Review, v. 28 (No. 5, 5/76): Groves and Ledyard, Some Limitations of Demanding Revealing Processes," in Public Choice, vol. XXIX-2, Special Supplement to Spring 1977: Groves, T. and J. Ledyard, "Optimal Allocation of Public Goods: A Solution to the Free Rider Problem," Econometrica, (May) 1977, v. 45: Hamada, "A Simple Majority Rule on the Distribution of Income," Journal of Economic Theory, 1973: Hochschild, Jennifer L. (1981). WHAT'S FAIR: AMERICAN BELIEFS ABOUT DISTRIBUTIVE JUSTICE. Cambridge, Mass: Harvard University Press. Kahneman D. and A. Tversky (1982), "The Psychology of Preference," Scientific American, 246 (January): Kahneman, Daniel and Amos Tversky (1979), "Prospect Theory: an Analysis of Decision Making Under Risk." Econometrica 47 (March): Loewenstein, George and Drazen Prelec. "Anomolies in Intertemporal Choice: Evidence and and Interpretation." in Lowenstein, George and Jon Elster, eds. (1992). Choice over Time. pp New York: Russell Sage Foundation. Machina, Mark J. (1987) "Choice Under Uncertainty: Problems Solved and Unsolved," J of Econ. Perspectives, Vol 1, #1 (Summer): Miller, G. (1981) Cities By Contract: The Politics of Municipal Incorporation. MIT: Cambridge. Miller, N. R. "Pluralism and Social Choice," American Political Science Review 77 (1983): Mueller, D. "Voting by Veto," Journal of Public Economics, 1978, Mueller, Dennis C. (1989). Public Choice II. Cambridge Univ Press, Cambridge, UK. (p ) Bibliography, GVPT 832, Spring 94 Page 16

17 Niskanen, Wm. A. Jr. (1971) Bureaucracy and Representative Government. Aldine: Chicago. Preston, Lee E. (1961) "Utility Interactions in a Two-Person World," Journal of Conflict Resolution. v. 5, #4 pp Public Choice, Vol. XXIX, no. 2. Special supplement to Spring 1977, on alternative demand revealing procedures. Rae, Douglas. (1975) "Maximin Justice and an Alternative Principle of General Advantage," American Political Science Review 69: Rapoport, Anatol. (1966) Two-Person Game Theory: The Essential Ideas University of Michigan Press: Ann Arbor. Rapoport, Anatol. (1970) N-Person Game Theory: Concepts and Applications Univ of Michigan Press: Ann Arbor. Out of print Roberts, Russell D. (1987) "Financing Public Goods." Journal of Political Economy 29 (April): Sandler, Todd; and J. T. Tschirhart, The Economic Theory of Clubs: An Evaluation Survey, Journal of Economic Literature, 18, pp Schelling, Thomas C. (1978) "Hockey Helmets" in Micromotives and Macrobehavior. New York: W.W. Norton. Sen, A.K. (1977) "Rational Fools: A Critique of the Behavioral Foundations of Economic Theory," Philosophy and Public Affairs v. 6 (no. 4, Summer): Sen, A.K., (1979) "Personal Utilities and Public Judgements: or What's Wrong with Welfare Economics?" Economic Journal, 89. Smith, Vernon, "Experiments with a Decentralized Mechanism for Public Good Decision," American Economic Review, 70 (4, 1980): Strotz, "How Income Ought to be Distributed" Journal of Political Economy. v. 66 (6/58): Jonathan Bendor and Piotr Swistak, (mimeo). The Controversy over the Evolutionary Stability of Cooperation. Tideman, N and G Tullock, "A New and Superior Process for Making Social Decisions," Journal of Political Economy, 84 Dec. 1976: Tversky, A. and D. Kahneman (1981) "The Framing of Decisions and the Psychology of Choice," SCIENCE 221 (Jan. 30): Wagner, R.H. "Impartiality and Equity," Theory and Decision v. 12 (1980): Bibliography, GVPT 832, Spring 94 Page 17