Lect 8 - Coordination : Combatting Abuse

What do coordination problems stem from?

they stem from strategic complementary : the more someone wants to do something, they more that you want to do it. bay area : being near other techs makes you want to be nearby for more manpower, help etc

Multiple equilibria

Stable outcome that depend on what everyone anticipates what everyone else will do

How are coordination problems different?

iN THE prisoners dilemma, individual self interest can lead to worse outcome for everyone involved. want to defect even if collective action is better overall

What is core idea for coordination problem?

people want to do what others are doing

Collective action equations

B > c (benefit if revolution is achieved, c is cost) ; Pr(success) = n/N (probability that common goal is achieved based on share of people that act) ; c/n+1 (cost of participation)

Strength in numbers

some types of actions get easier as the more people participate (protests) as n gets bigger, c gets divided by a larger number and the cost to act declines

When will people want to act?

If the payoff to acting is greater or equal to the payoff of free-riding

How are these actions now strategic complements?

payoff to acting is greater when n increases, payoff is lower and few act. the PAYOFF is lower if YOU dont act

Spontaneous revolutions

something shifted in what people thought others would do. the FEAR to public descent keeps quiet. keeps them in the BAD equilibrium. fear of standing alone keeps people locked away even if private beliefs are different

Social Conventions

rule or practice that provides a guide for social conduct. unwritten rules the dictate how we behave. may be etiqutte or fashion. you expect others to follow the rule, so you will. MUTUAL EXPECTATIONS

Harmful social conventions

• foot binding

• honor killing

• child marriage

Why do they persist? Because of the high personal cost of breaking the mold

What is the first-mover convention?

you may be outcast if you were to be the first person to stop doing something. it may come at too high of a cost. if everyone fears being the lone nonconformist, an equilibrium in which everyone regrettably conforms is established

How to end a social convention like footbinding?

• reformers focused on education that others don’t do it. show how natural feet are healthy and shows that an alternative exists

• showed how health is impacted

• made natural foot societies where members would not allow their sons to marry women with bound feet and don’t bind their daughters feet

they made a shared expectation among members, reduced the risk for individuals

Everyone benefits if it works, but an individual would get risked if they acted along

Confronting abusers is coordination problem

• individual powerlessness against someone who is so strong

  • there could be retaliation if someone would join them

    • if you expect everyone else to stay silent, your person incentive to stay silent is increased

if you expect people speak out, you will. STRENGTH IN NUMBERS

Collective Effort to Confront Coordination Problem

it is a shift of equilibirum, it is a crack in the dam and it is safer to speak against someone behaving disgusting

Benefits didn’t change ; now the costs changed

when others speak out, a victim does not have to worry about the same fears of retaliation

What kinds of policies will solve coordination problems?

Whistleblower protections will shield individuals who report illegal activities within an organization from retaliation

How do whisterblowers help?

It actively encourages individuals to come forward to lower the personal cost and can keep people safe from harm. For example, SEC can give financial rewards that will lead to enforcement actions

Helps overcome the coordination barrier and mitigates the perceived risks.