The Stag Hunt

Last week I was at the local grocery co-op buying some avocadoes and tomatoes. At the checkout line, the cashier, a Jamaican man with dreads, started making some small talk. What do you major in, he asked. Oh, economics? Hey, what do you think of the Fed?

I don't know much about the Fed, really, so I said I didn't wade much in political debates (which I don't) and that I thought they employed decent enough people. I prefer going through life assuming the best in people, assuming that the world isn't rigged against me, I said. The Jamaican man turned serious: But sometimes things are rigged. Sometimes things are rigged, and you have to fix them.

Hm. In my conversation with the Jamaican man, I got the sense that he believed things (the economy, the state of the world, etc.) were messed up only because someone was there to mess it up; that he felt that if only people were cooperative (i.e. "give peace a chance"), the world would be a great place. And this seems a really natural position to take, since, after all, our problems are human-made. But it turns out that our society doesn't work like that. The startling and fascinating conclusion of game theory is that we can end up in sub-optimal outcomes even if everyone would like to cooperate.

How is this possible?

The story behind the game goes back to Rousseau. Imagine, he said, a group of primitive people who had a choice between hunting stag and hunting hare. Hunting stag would, of course, be the best option because it would yield lots of rich meat, but the problem is that it requires everyone to work together to take the stag down. On the other hand, they could hunt hare individually, but the reward wouldn't be as great. In game form the story looks like this:


The numbers in the boxes represent how the players (in this case, an individual vs. the rest of society) value the outcome. Thus everyone hunting stag is the best outcome (3), both hunting hare is second (2), and getting screwed is the worst (1), because you not only waste your time running after the stag, but you don't even get any food.

In other words, these people are as cooperative as you're going to get: They would like to work together and they don't like to take advantage of each other. And yet it's still possible for these primitive people (and us possibly less primitive people) to get stuck in a Hunt Hare/Hunt Hare equilibrium!

The catch here is that it matters not just what players want to do, but what they think others will do. Everyone would like to hunt stag, but only when everyone else hunts stag. So if people think others are inclined to cooperate, they'll cooperate too; but, on the flipside, if everyone is scared of getting screwed over, then they're likely to not cooperate.

Notice that the basic fact that all these people are cooperative hasn't changed. It's just that they don't know that they're all cooperators. And this uncertainty causes all the problems: cooperation is risky, it leaves you vulnerable, and people aren't willing to gamble too much. [Indeed, this game is also called an Assurance Game, because if players were assured that the other was a cooperator, then they would cooperate too.]

This is my long comment to the Jamaican man's remark. Yes, Jamaican man, sometimes things are rigged. But sometimes we can end up in all sorts of social problems even when no one is at fault.

For more information on the Stag Hunt and cooperation and such, see Brian Skyrms' book: The Stag Hunt and the Evolution of Social Structure.

Capitalism, In Essence

1. Consumers use money to get what they want.
2. Sellers are rewarded with money for giving consumers what they want.
3. Money in hand, sellers turn into consumers and get what they want./To get more money, consumers turn into sellers and give people what they want.

4. Repeat—ad nauseum.

Meanwhile, everyone knows of course that people shouldn't always have what they want.

Vino con vino

[Updating content regularly is more difficult than I thought. While I'm working on my next post, here's an old Spanish poem of mine for those who haven't seen it yet.]

Vino con vino

Vino con vino.
Vino vino y se bebió todo.
¡Todos borrachos!
Vino vino y venía tristeza
Sigilosamente a esta fiesta

Mas no importó.
Nada nada sino lo divertido.
¡Vino más vino!
Debajo del techo, jaleo alegre,
Mientras venía la calma Muerte.

Vino con vino.
Vino vino ya se fueron los padres.
¡Casa de mozos!
Vomitó uno y vomitó dos,
Se echaron a reír, locos locos.

Trepaba al techo,
Alto alto subía el joven.
¡Tantos los gritos!
De la tierra volaron distante
Incitaciones –¡Adelante! ¡Adelante!

Vino con vino.
Vino vino derramado al suelo.
¡Choque penoso!
Césped rojo y voces temblando,
Trajo el vino ¿Para que? ¡Para nada!

Yikes!

Here we have commodity fetishism at its worst:

When people care more about things than their relations (and not even distant relations, but really really close relations!), the world is pretty much doomed. Don't tell Marx about this ad or he'll die a second death.

Rumbo a Argentina

OK everyone, I have an announcement: Next semester I’ll be in Buenos Aires, studying at the Universidad Católica de Argentina (UCA).

I'm going mostly for two reasons. The first is Spanish. I've been working on learning the language for a long time (almost 7 years to be exact), and I feel that in order to make it worth all that while, I should try to become as fluent as I can. Here in the United States and at the University I've tried everything I could (reading books, listening to the radio, conversation partner programs, and the like), and it's all worked well so far. But now I'm at that point where I need to finally immerse myself. My hope is that I can solidfy my Spanish as much as possibly while I'm there. At the same time, though, I not only want to learn Spanish, but also use it as well: I've been in "practice mode" for the past seven years, and I'm ready to finally put it to work in real life. In Argentina I'll have to rely on my Spanish to get around and get things done, and that, in my mind, is a wonderful way of culminating all these years of study.

The second reason for studying abroad dovetails somewhat with the first. You see, the reason I'm so eager to learn Spanish in the first place is that I think it opens up worlds. In not knowing Spanish, I felt blocked off from millions of people; their culture, ideas, hopes, and fears seemed off-limits. But now those barriers have fallen, and I can interact meaningfully with a whole new group of people.

As a student of economics, I find this “opening of worlds” terribly exciting. Each country has its own way of organizing itself, is own goals and priorities, and its own way of tackling social problems. Here in the U.S. we naturally focus on our own approach—but of course ours is not the only one. In my economics classes at UCA, I am curious to see whether Argentinean economists understand their field in a different way than Americans (and a cursory perusal of their journal articles suggests they do), or whether they have a different perspective on world affairs. More broadly, I think living in Argentina will help broaden my understanding of my field, especially by providing me with real-life examples of how different social norms, customs, and institutions influence economic activity.

In the long run I hope to become a professor, if not of economics then in some field related to the social sciences. Part of being a professor, it seems, is thinking critically about one’s field, and international exposure is one way I can force myself to consider and reconsider my assumptions. Indeed, that's the only way we grow.

NB: I don't mean for my blog to be autobiographical, but I'm making an exception here because I find explaining myself like this helpful in clarifying my own thoughts. This trip is a big move on my part, and it's important that I think through what I'm getting myself into.

Review: Tagore's Short Stories

I recently finished reading a collection of Tagore's short stories. Knowing my affinity for literature, some family member of mine gifted it to me after returning from a trip to India, almost as a way of introducing me to the literature of the subcontinent. It turns out that was a really appropriate move: If you were to single out the single literary giant of India's modern history, you would pick the Nobel-prize-winning, early 20th century, Bengali writer Rabindranath Tagore.

For those of you unfamiliar with Tagore, a quick biography: Rabindranath, the youngest of 14 children, was born to Debendranath Tagore, a zamindar¹ and prominent figure in Bengali politics and elite society.² Naturally, then, Rabindranath's education consisted of private tutoring, multiple trips to Europe, and close interaction with the leading intellectuals of the day. The stories contained in the anthology I read were all written during the 1890s, when Rabindranath was called away from his home in the Bengali capital of Calcutta to manage the family estate in the countryside. This experience—though somewhat lonely and isolating for him, as he confesses in his letters—proves a fertile source of inspiration for his stories, which often focus on rural life, both for the common folk and for the zamindars.

Although Tagore's stories take place so long ago, they they still feel relevant and familiar to contemporary Indian society. Of course, some social mores have changed drastically since then (making, for example, awkward reading during many of Tagore's stories about child marriage), but others haven't. Take, for example, how all of Tagore's characters seem to regard marriage as the most important event in life and the most important social institution. In fact, Tagore himself seems to believe this as well, for he often places a marriage scene at the most critical point of the story.

Nowhere does he do this more prominently than in his story "Kabuliwallah." In it, he describes the affectionate relationship that forms between a traveling salesman (a kabuliwallah)³ and a little girl named Mini. Rahamat and Mini shared an amusing, inside joke where he would ask her if she was going away to her father-in-law's house, and she would roundly reply, "Are you going to your father-in-law's house?" Rahamat visits her frequently and thus they develop a strong bond, until one day Rahamat is sent to jail for committing assault and the two don't see each other again for many years. The day after he is let out of prison, Rahamat goes to visit Mini. This day, it turns out, happends to be Mini's wedding day, so when he arrives at the house, he finds it all decorated for the occasion. Rahamat asks Mini's father for permission to meet Mini, but he, hesitant and afraid, tries to turn him away, saying that there is some event in the house and everyone is too busy. Crestfallen, Rahamat then walks up to Mini's father and says, "I have brought this box of grapes and nuts and raisins for the little one. Please give them to her." Mini's father is about to pay him for the box, but Rahamat stops his hand and tells him:

"Please, don't give me any money—I shall always be grateful, Babu. Just as you have a daughter, so do I have one, in my own country. It is with her in mind that I came with a few raisins for your daughter: I didn't come to trade with you."

With that, Mini's father instantly connects with this fellow father's longing, and ignoring all objections, all worry that this murderer would tarnish this most auspicious day, all concern for propriety and social class (since he was, after all, a Babu), he brings Mini, decked in her full bridal sari, out to see him. At first Rahamat is shocked to see Mini all grown up, but then he smiles and asks, "Little one, are you going to your father-in-law's house?"

Though the narrative is simple, and the events are simple, the emotions in this story are suprisingly powerful. The poignancy of Rahamat's final question and the suprising boldness of Mini's father make your heart both ache and rejoice at the same time. Often, you don't know what to feel, or you feel a strange mix of both at the same time. Many of Tagore's stories are like this. They put you through complex emotional situations, where you find yourself stuck between multiple characters and perspectives.

The "Kabuliwallah" story also highlights another salient feature of Tagore's stories: they always have something to teach us. In "Kabuliwallah," Tagore brings out a moment when we're at our best, holding both Rahamat and Mini's father as an example of both generosity and simple love. Alternatively, Tagore also shows us when we're at our worst—lusting for wealth, valuing social custom over people, forgetting our duties. In both these cases, we find teachable moments, and not because Tagore moralizes, but because he shows us what we are capable of—both for good and for ill. After that, we're free to make conclusions as we will.

I have come to view Tagore's stories as a sort of guide to life. They do not pretend to offer any advice, of course, and supply no moral strictures; but I feel I always come away more humble, more appreciative of the complexities of life. That, for me, is guidance enough.

Notes
1. A zamindar is essentially an aristocratic landlord, an Indian squire of sorts.
2. His name, Tagore, is itself is an Anglicization of the Bengali/Hindi word Thakur [ठाकुर], meaning "lord."

3. Traveling traders in those days were known as kabuliwallahs (the ones from Kabul) because they often came from Afghanistan.

Economics in Film

For some reason it's film season for economics.

For example: The Informant!, which came out about a week ago, stars Matt Damon in a true story about how the vice-president of agri-business giant worked undercover with the FBI to reveal that his company was engaged in an unprecedented global price fixing scheme. Now price fixing may not sound like much—and I thought as much myself until I heard this week's podcast of This American Life.

This week on the This American Life radio program, Ira Glass (the host) replayed a clip from c. 2000, which, it turns out, was essentially responsible for getting this story onto the big screen. Apparently a screenwriter was listening to the program, thought the story would make a good movie, and, well, here we are.

So, what did this screenwriter see in story about price fixing?

Ira Glass explained it something like this: We rarely, if ever, get a chance to find incontrovertible proof of a conspiracy. We may be able to tell that something's amiss, we may have hunches, but in the end we can only speculate, grope in the dark, and collect circumstantial evidence. There's never proof, never closure. Except now. This story represents that one rare opportunity we have to truly truly know what's going...which in this case turns out to mean that evil men are hatching to take over the world.

Ira Glass makes it clear that world domination is by no means a stretch from price fixing. He played some of the FBI's clips of these business executives carving up the markets of the world amongst themselves at some Marriott hotel. [Carving up—as in carving ham, or roast: they argue over the best parts, but in the end they make sure that everyone has a decent meal.] They laugh, chat, and work out complex sums; crumpled wrappers litter the room and stale coffee sits; and, really, in all respects the meeting seems perfectly normal. The only catch is that they're in the process of puppeteering the world food market—food that almost every person on this planet depends on—and, in doing so, ruining small businesses and exploiting the rest of us (and especially the poor). Which is why price fixing is so egregiously criminal and all, but you wouldn't know it from their casual demeanor and guiltless expressions.

I think what makes this storyline so gripping is its dark undercurrent. Nothing is more scary than the idea of men manipulating our lives with such ease. Gods we can live with, but self-appointed gods are too much.* These agri-business crooks get caught, sure enough, justice is served (at least nominally), but the story still doesn't leave you with a happy ending, because all the time you can't help but think: How many more of these guys are there?



Uncannily enough, that's where Michael Moore seems to pick up in his latest film, Capitalism: A Love Story. I don't know much about the movie, but from the previews it seems he's trying to show how big corporations (like the ones from The Informant!) are engaging in unfair practices to con over the rest of us.

Michael Moore is rather radical, of course, and I realize he trucks primarily in publicity stunts, but looking at his track record I'm still really curious about what he has to say. After all, he got the two big-picture ideas of his last two films mostly right: the Iraq War was, after all, misguided and misplanned; and health care is, after all, a national problem. Let's see if Mr. Moore can go 3 for 0 (speaking big-picture, of course).


*This line comes from one of Tagore's short stories, "Housewife":

But clearly no god can be more malevolent than a man-god. The immortal gods cause nowhere near so much trouble. If we pick a flower and offer it to them, they are pleased; but they don't harass us if we don't offer it. Human gods demand far more; if we fall the slightest bit short, they swoop, red-eyed with fury, not at all godlike to look at.