PHIL 270 Lecture Notes - Lecture 10: Win-Win Game, Pareto Efficiency, Materialism
Business Ethics
2.22 Lecture Notes – Brennan
Ch 9: Corruption
· Markets may be makers or mirrors – they might reveal a corruption, or they might make something
corrupt – they both reveal and transform
· Hard to isolate the variables
· Some experiments they review – idea of playing ultimatum games in various kinds of societies
o People in market-based economies tend to be more fair
▪ One that could predict, most strongly, fairness was exposure to markets
· Pg 99: market societies tend to be less corrupt
o Direction of causality cannot be determined – only correlation
o Corruptio doest allo arkets, hih are fouded o trust, otrats, et.
o Ee if e set aside issues of trust Aoals paper, e do hae reaso to eliee that the
more interactions we have, the more reason to trust
· Digression – Axelrod – 1984
o Ran some famous computer tournaments
o Iterated prisoers dilea gae
o People who are in the tournaments have to submit a strategy for maximizing utility
o In a repeated game, it can pay more to move from the NE to the pareto optimum – either
through implicit or explicit signaling
o Three strategies
▪ Conditional cooperation
▪ Unconditional cooperation
▪ Unconditional defection
o What you find in the repeated games, if the # of repetitions are long enough and you play with
the same person, then you get conditional cooperation
o Market analog to this – you tend to get more trust as you more repeated interactions and you
have the possibility of walking away from a deal – essence of a market is the right to say no
o If ou oe proider oopol i the for of a orporatio, goeret, uio, et., ou dot
have the right to say no
o Locked into positive sum games in a market – theoretical argument for why markets decrease
corruption and increase trust
o Corruption – reputation, legal trials – decreases
· UPSHOT: we need to be careful when we accuse markets for corruption
· Market societies tend to be more tolerant
o Mechanism?
o Or do markets usually pair with constitutional democracies
· Bergerons – market typically promote toleration
o Freidman explanation – discrimination against a group of people is not profitable for the most
part
▪ Eplaatio doest reall ork he osuers dead disriiatio –
discrimination is rewarded
o Bergeron gives different evidence
o Mechanism – idea that our daily interactions in a market society will be more impersonal
▪ Forced to interact with people very unlike us – racially, religiously, etc.
▪ We want the best deal along the supply chain – e dot are ho is selling –
incentivizes us to encounter people very unlike us – pressures us in the direction of
more tolerance
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