PP110 Study Guide - Atlantic Cod, Sport Utility Vehicle
Document Summary
The problem: self-interested agents engaged in cooperative activities will tend to act in ways that promote sub-optimal outcomes. The solution: empower a government (leviathan) to force people to act in ways that produce optimal outcomes. 3 examples: an arms race at an international level. Solution: world government with real coercive power: the suv problem behemoth. Cause: fear of other suv"s; fear of being in a crash with a bigger vehicle. Solution: significant government surtax on such vehicles: tragedy of the commons (10 people share common land, each person has five cows) Cause: fear (if you don"t add a cow, your neighbours will), desire (money from cow) Effect: degradation of the land (lots of cows will destroy the pasture) Solution: a larger authority to oversee land management. Atlantic cod fishery is an example of this. The atmosphere is a commons because it is property of humanity. We can only admit so much into the atmosphere.
