Entry 17: Tragedy of the Commons Experiment

I think if the method of acquiring the fish wasn't so difficult then we would deplete the lake of the fish supply very early on. Fortunately for us, we weren't so good at picking up M&Ms with chopsticks so we only acquired moderate levels of fish. If we were able to take however many fish we like then I am sure that fish would be extinct in our lake because we tend to do what's for our best interest even though it might hurt other people and lower the social interest. No one sacrificed for the sake of the society because sacrificing would mean that other people get more while you get less because unless everyone sacrifices, the sacrifice would be in vain and therefore only be negative to the good-willed philanthropist. However, after the first hunting season, we were able t discuss and come up with a plan that would benefit everyone and the social interest. We come up with the idea of everyone sacrificing and let the fish multiply and then we can take a lot in the end. We only took one fish per round because we wanted to let the fish multiply as fast as possible. I don't think the examples mentioned, regarding space and seats really fit with the situation. The reason is that fish is different because when we sacrifice, we're actually not only saving up for later but making it more profitable later while that's not the same case with seats and space.However, if its public good that would benefit from sacrifice then it is the same case and I think it's for the best that people put aside their self interest for the social interest because usually what happens in the long wrong is that it comes back and benefits personal interest.

Entry 16: Game Theory and Chicken

The assumption that people always make rational choices are a bad one because the difference between human and animals and robots is that we humans have feelings and emotions that affect our logic and counters or facilitates our rational mind that is for survival and development purposes. For example, the best thing for me to do might be to have sex and leave because I would still be able to have more offspring if i leave the previous ones and hunt for more female. However, my emotions stop me from doing that because I have a feeling of attachment with the female. This is true in business too, we can't just think of people that does the most for their own interest because people have loyalty, friendship, and emotions involved when they make decisions. As illustrated by the nash equilibrium however, the result dwindles somewhere in the middle of rational and irrational. On one hand the prisoners would not give up on their rights to achieve the least sentence possible but on the other hand they wouldn't work together to achieve the best interest for both. However, in a real case and not a theoretical situation, the prisoners might be friends and they might work together to sacrifice a little for the better of them both. Therefore, bad outcome is not always inevitable and it depends on not only the rational mind but also the sentimental and emotional mind.

Entry 15: What is a Monopoly?

What makes a monopoly is essentially the fundamentals of a market. A monopoly is a firm in an industry or market that holds all the supply of the particular product of the market. For example, in the automobile market, a firm that is a monopoly would be the only supplier of cars. This is because in a market where there is a monopoly, there are barriers to entry. Barriers to entry have different types. The legal barrier to entry is where the government sets a rule or legislation that prohibits the entry of firms and grants the sole production right of the particular good or service to the one single firm. This might be because the government deems that it is more efficient and convenient for one firm to be the only supplier. The natural barrier to entry is sometimes illicit because in a monopolistic market where there is a natural barrier to entry, the monopoly might have accumulated so much capital that competition is impossible and they might have achieved this efficiency through illicit bargains or trades. A monopoly sets the price in the market. Because the firm is the sole producer of the product, it can manipulate the quantity produced to a profit maximizing quantity. They reach this by producing at the point where marginal cost equals marginal revenue. At this point, monopoly produces at the profit maximizing quantity. However, it doesn't just stop there, monopolies can still jack up the price because they are the only provider and the more essential the products are, the more inelastic the prices would be and the more they can raise. Monopoly might be good if it is regulated by the government. The reason monopoly tends to be bad is because they produce at the profit maximizing level without competitors so the price is usually higher and the quantity lower. This causes a inefficiency. However, with government regulation, it might be able to utilize the benefit of a monopoly, which is the efficient production to provide a wider and cheaper service. Although monopolies spend surplus on the maintaining of monopolies, they still chip in a huge increase in producer surplus by minimizing consumer surplus as much as possible because they charge at the highest people are willing to pay and therefore, is profitable.