PPE Integration 1 Comprehensive Vocabulary

Comprehensive vocabulary flashcards covering the key terms, theorems, models, and concepts from the PPE Integration 1 lecture notes.

Rational Choice Theory (RCT)

A theoretical framework that explains individual actions in terms of beliefs and desires, assuming agents attempt to maximize preference satisfaction across complete and transitive preference orderings.

Rational Ignorance

The deliberate choice by a rational individual to remain politically uninformed because the individual cost of acquiring information outweighs the near-zero expected benefit of being decisive in an election.

Collective Action Calculus ($R = B \times P - C + D$)

Anthony Downs's decision equation for voting, where $R$ is the net expected reward, $B$ is the individual benefit of a win, $P$ is the probability of casting a decisive vote, $C$ is the individual cost, and $D$ is the expressive benefit of fulfilling a civic duty.

Condorcet Jury Theorem

A mathematical theorem stating that if each voter has an independent probability greater than $0.5$ of being correct, the probability that the majority vote selects the correct outcome approaches $1$ as the size of the electorate grows to infinity.

Transitivity

A consistency axiom of rationality asserting that if an agent strictly prefers alternative $A$ to $B$ and $B$ to $C$, the agent must also prefer $A$ to $C$.

Independence of Irrelevant Alternatives (IIA)

An axiom stating that the preference ranking between two alternatives should not change as a result of the introduction or removal of a third, unrelated alternative.

Expected Utility Theory

A framework developed by John von Neumann and Oskar Morgenstern showing that rational individuals facing risk choose the action that maximizes the probability-weighted sum of utilities associated with possible outcomes.

Framing Effect

A cognitive phenomenon identified by Daniel Kahneman and Amos Tversky where different linguistic presentations of identical choices lead individuals to assign different utilities, violating transitivity and IIA.

Cost-Benefit Analysis (CBA)

A policy evaluation method that systematically weighs the total monetary value of anticipated societal benefits against expected costs based on individuals' willingness to pay.

Utilitarianism

A consequentialist moral philosophy founded by Jeremy Bentham holding that the moral rightness of an act or policy depends solely on whether it produces the greatest happiness for the greatest number.

Decreasing Marginal Utility

The economic principle stating that each additional unit of a good or wealth consumed produces a progressively smaller increment of subjective utility.

Interpersonal Comparison of Utilities

The comparison of preference intensities across different individuals, widely regarded by welfare economists as theoretically impossible to establish cardinally.

Welfarism

The normative view, characterized by Amartya Sen, that the ethical goodness of a state of affairs depends solely on the distribution of individual utilities within that state.

Pareto Improvement

A reallocation of resources that makes at least one person strictly better off in terms of utility without making any other person worse off.

Pareto Efficiency (Pareto Optimality)

A state of allocation from which no further Pareto improvements are possible, such that no individual can be made better off without reducing the utility of another.

First Fundamental Theorem of Welfare Economics

The theorem proving that under perfect competition, complete markets, price-taking behavior, and an absence of externalities, any competitive market equilibrium is Pareto optimal.

Second Fundamental Theorem of Welfare Economics

The theorem establishing that any desired Pareto optimal allocation can be attained by a competitive market equilibrium following an appropriate lump-sum initial redistribution of resources.

Kaldor-Hicks Efficiency

A welfare criterion stating that a policy change is efficient if the gains to winners are sufficiently large that they could hypothetically compensate all losers and still remain better off.

Harm Principle

John Stuart Mill's liberal doctrine asserting that state power can only be rightfully exercised over an individual against their will to prevent harm to others.

Sen's Paretian Liberal Paradox

A mathematical proof by Amartya Sen showing that the Pareto efficiency condition cannot be consistently combined with guaranteeing minimal decisive individual rights over private choices.

Rights as Side-Constraints

Robert Nozick's deontological conception that individual rights impose moral boundaries forbidding interference, regardless of whether violating them would maximize total social welfare.

Negative Freedom

Isaiah Berlin's definition of liberty as the absence of external obstacles, deliberate interference, or coercion by other human beings.

Positive Freedom

Isaiah Berlin's concept of liberty understood as self-mastery, personal autonomy, and the ability of an individual's rational higher self to direct their life.

Republican Freedom

Philip Pettit's definition of liberty as non-domination, requiring structural institutional protections against the capacity of another party to interfere arbitrarily in one's life.

Nudge

A policy intervention within libertarian paternalism that alters the choice architecture to steer individual behavior predictably toward welfare-enhancing outcomes without forbidding any options.

Nash Bargaining Solution

The unique cooperative bargaining solution that maximizes the product of both players' net utility gains above their disagreement breakdown points: $\max (U_1 - D_1)(U_2 - D_2)$.

Original Position

John Rawls's hypothetical thought experiment of fair initial conditions where rational, self-interested contractors select principles of justice for society.

Veil of Ignorance

A conceptual condition in Rawls's original position that deprives contractors of knowledge regarding their personal class, wealth, natural talents, race, and sex to eliminate self-serving bias.

Maximin Rule

A decision-making strategy under uncertainty that selects the alternative whose worst possible payoff is the best among all available options, maximizing the minimum outcome.

Primary Goods

The fundamental currency of justice in Rawls's theory, comprising basic liberties, opportunities, income, wealth, and the social bases of self-respect necessary to pursue any life plan.

Difference Principle

The egalitarian component of John Rawls's second principle of justice, requiring that social and economic inequalities be arranged to the greatest benefit of the least-advantaged members of society.

Basic Structure of Society

The major social, political, and economic institutions (such as constitutions, legal systems, and markets) that distribute primary goods, which Susan Moller Okin criticized for excluding the family.

Market Socialism

John Roemer's economic model where citizens receive birthright vouchers to a per-capita share of national capital assets that can be traded for dividends but cannot be converted to cash or concentrated.

Politics of Recognition

Iris Marion Young's critique of the distributive paradigm of justice, arguing that injustice stems fundamentally from group-based domination, cultural imperialism, and social stigmatization.

Nash Equilibrium (NE)

A strategy profile in a non-cooperative game where no player can obtain a higher individual payoff by unilaterally deviating from their chosen strategy given the strategies of all other players.

Subgame Perfect Equilibrium (SPE)

A refinement of Nash equilibrium that constitutes a Nash equilibrium in every subgame of an extensive-form game, eliminating non-credible threats via backward induction.

Backward Induction (Zermelo's Algorithm)

The mathematical process of solving extensive-form sequential games by analyzing the optimal action at the final decision node and working backward to the initial node.

Prisoner's Dilemma

A symmetric non-cooperative game where individual rationality dictates a strictly dominant strategy of defection, resulting in a Nash equilibrium that is strictly Pareto-inferior to mutual cooperation.

Coordination Game

Any strategic non-cooperative game characterized by possessing two or more pure-strategy Nash equilibria.

Stag Hunt (Assurance Game)

A symmetric coordination game featuring a payoff-dominant equilibrium (mutual cooperation) and a risk-dominant equilibrium (mutual defection).

Focal Point (Schelling Point)

Thomas Schelling's concept of an equilibrium that agents choose without explicit communication due to its psychological prominence, conspicuousness, or contextual salience.

Risk Dominance

An equilibrium selection criterion formulated by John Harsanyi and Reinhard Selten that selects the Nash equilibrium associated with the highest Nash product of unilateral deviation losses.

Belief Trap

Christopher Mackie's concept of a self-sustaining coordination trap where a shared convention or false belief persists because individual deviations impose heavy social costs.

Common-Pool Resource (CPR)

A resource system that is rivalrous in consumption but non-excludable, subject to overexploitation unless regulated by state rules, private property, or community institutions.

Polycentric Governance

Elinor Ostrom's framework describing multiple, overlapping, autonomous decision-making centers operating across local, regional, and national scales to manage public and common-pool resources.

Rent-Seeking

The expenditure of resources by interest groups to manipulate the political and legal environment to secure unearned economic transfers or monopoly rents ($Q^* \times (P^* - P)$).

May's Theorem

A social choice theorem proving that simple majority rule ($50\% + 1$) is the only binary decision rule that simultaneously satisfies universal domain, anonymity, neutrality, and monotonicity.

Black's Median Voter Theorem

Duncan Black's theorem proving that if all voters have single-peaked preferences along a one-dimensional spectrum, the ideal point of the median voter is the Condorcet winner.

Condorcet Winner

A policy alternative or candidate that defeats every other available alternative in separate pairwise majority run-offs.

Log-Rolling

The practice of vote trading among legislators to pass bills providing targeted benefits to their respective constituencies, which Buchanan and Tullock argue can lead to public overspending.

Pork-Barrelling

Inefficient public spending legislation designed by politicians to direct concentrated project funds to their local geographic constituency at the expense of general taxpayers.

Condorcet Paradox (Cycle)

The failure of pairwise majority voting to yield a determinate winner due to cyclical collective preferences ($A > B > C > A$), even when individual voters have transitive preferences.

McKelvey-Schofield Chaos Theorem

A theorem proving that in a multidimensional policy space with non-single-peaked preferences, continuous majority rule cycles allow an unconstrained agenda-setter to reach any point in the space.

Gibbard-Satterthwaite Theorem

A social choice theorem stating that any non-dictatorial voting rule with three or more distinct alternatives that satisfies universal domain is manipulable by strategic voting.

Arrow's Impossibility Theorem

Kenneth Arrow's theorem proving that no ranked aggregation rule for three or more alternatives can simultaneously satisfy universal domain, Pareto efficiency, IIA, and non-dictatorship.

Alternative Vote (AV)

A preferential, single-member voting system where voters rank candidates and the lowest-scoring candidates are sequentially eliminated with their votes redistributed until one candidate secures a $50\% + 1$ majority.

Borda Count

A positional voting method where candidates are awarded points corresponding to their ranked order ($0$ points for lowest, up to $n - 1$ for highest), which is susceptible to strategic manipulation and violations of IIA.

Duverger's Law

Maurice Duverger's principle stating that single-member district plurality voting systems favor a two-party system, whereas proportional representation systems favor multi-party competition.

Ostrogorski's Paradox

A political choice paradox demonstrating that direct issue-by-issue majority voting can yield a completely contradictory governing outcome compared to voting for aggregated political party platforms.

Polyarchy

Robert Dahl's institutional concept of modern representative democracy characterized by open electoral contestation, widespread political participation, and dispersed power among shifting, non-monopolistic interest groups.

Veto Players

George Tsebelis's concept of institutional or partisan actors whose explicit agreement is constitutionally or politically necessary to depart from the status quo.

Structure-Induced Equilibrium (SIE)

Kenneth Shepsle and Barry Weingast's theory showing that institutional mechanisms like jurisdictional committees and amendment restrictions stabilize multidimensional social choice and prevent chaos.

Minimal Winning Coalition (MWC)

William Riker's office-seeking model predicting that parties form coalitions where every member is pivotal and the departure of any single party drops the coalition below a legislative majority.

Shapley-Shubik Index

A mathematical power index calculating a political party's voting power as the fraction of all possible voting permutations in which that party casts the decisive, pivotal vote to reach a quota.

Portfolio Allocation Model

A theory of parliamentary coalition formation positing that political factions trade voting support for control over specific ministerial portfolios to obtain issue-specific policy discretion.

Budget-Maximising Bureaucrat

William Niskanen's model positing that bureau heads exploit their monopoly position and asymmetric cost information to maximize departmental budgets, expanding output up to twice the efficient level.

Bureau-Shaping Model

Patrick Dunleavy's theory arguing that high-ranking civil servants seek to shape their administrative tasks toward elite policy design and personal autonomy rather than simply expanding departmental budgets.

Decentralisation Theorem

Wallace Oates's theorem asserting that in the absence of cost economies and inter-jurisdictional externalities, providing public goods at decentralized Pareto-efficient levels yields equal or greater welfare than uniform national provision.

Tiebout Model

Charles Tiebout's theory of fiscal federalism proposing that competition among local jurisdictions allows citizens to 'vote with their feet' and match their specific tax-and-public-goods preferences.

Vertical Fiscal Imbalance (VFI)

A structural fiscal condition in federal systems where central governments collect far more revenue than they spend directly, while subnational states spend far more than their own tax revenue sources.

Flypaper Effect

The empirical economic finding that unconditional intergovernmental grants stimulate far higher spending by subnational jurisdictions than an equivalent increase in local citizens' personal incomes.

Fiscal Illusion

The voter misperception that intergovernmental grants represent 'free' external resources, leading local electorates to demand excessive public expenditure without factoring in central tax burdens.

Moral Hazard

A principal-agent problem characterized by hidden action, where an agent alters their behavior toward excessive risk or slack because the principal bears the associated costs.

Adverse Selection

A pre-contractual principal-agent failure characterized by hidden information, where unobservable traits lead to the systematic selection of undesirable agent types.