Showdown in Ely

High noon. Timber rattlers herald the jangling stomp of Councilman Setterstrom's boot-stomp just ahead of the last asthmatic rants of the dying sirocco hell-bent for licking the hem of the duly elected official's leather duster.

A groundhog chatters nervously.

Ely's mayor, one Melody Van Camp, glances at a filigreed pocketwatch, knowing that the appointed hour has come and gone. Rail Boss Mark Bassett has fled town, and it was time for a reckoning.

So they broke in.

At the coroner's a reedy Scot tapped the last nail into place for the coffin he'd just finished, took a swig of a dark liquid, wiped the corner of his mouth, narrowed his eyes, and asked the tumbleweeds: "people, if crap like this can happen, why do we even have a government at all?"

All was not quiet in Ely. The break-in had pitted honest folks' morals against each other. Some were saying the rail boss had it a-comin'. Some were saying the council had ought gotten a search warrant. Others were saying it was a breach of the rule of law.

Me? I'm a drifter in these parts, ma'am. I've got no sympathies one way or t'other. To me, it's a stretch to see how one part of the organization with a widely-recognized claim on the legitimate use of force in society can bully another part of the organization with a widely-recognized claim on the legitimate use of force in society and be any more or less obnoxious than they already are.

But then, I'm not the antihero of this little story. I'm sure from the point of view of the Seibei, the Ushitora and Yojimbo both were villains. And vice versa. What if life were more like a spaghetti western than a John Wayne morality play? To the city council, the railroad is naughty. To the railroad, the council is naughty. To the median constituent, you've really got to wonder if these public servants are really serving the public. If any duly constituted government has a hope of forming a euvoluntary institution, it should be local government. This is an illuminating test.

A sickly-looking carrion bird perches atop the saloon.

Deceit and Consensual Coercion: The Taming of the Shrew

I still remember seeing The Taming of the Shrew in person for the first time. For those of you who don't remember, Act 1 Scene 1 sets a play within a play. The shell plot features a jape in which locals attempt to convince a drunken sot that he's nobility after a rough night at the pub. The play-within-a-play that's been converted to many a movie (notably the one with a pre-Dexter Julia Stiles) tends to omit this shell plot.

This is a mistake.

This is a mistake because that very theme of kidnapping, deceit, and conversion is the central joke in the rest of the play. Christopher Sly, the drunk, knows that he's a down-on-his-fortunes tinker, not landed gentry, but allows himself the pleasant delusion that he's nobility (so long as the camera is on, so to speak). Similarly, Kate, the eponymous shrew, allows herself to be whisked away and by Act IV is at turns starved and neglected:

The more my wrong, the more his spite appears:
What, did he marry me to famish me?
Beggars, that come unto my father's door,
Upon entreaty have a present aims;
If not, elsewhere they meet with charity:
But I, who never knew how to entreat,
Nor never needed that I should entreat,
Am starved for meat, giddy for lack of sleep,
With oath kept waking and with brawling fed:
And that which spites me more than all these wants,
He does it under name of perfect love;
As who should say, if I should sleep or eat,
'Twere deadly sickness or else present death.
I prithee go and get me some repast;
I care not what, so it be wholesome food.

By the end of the play, she's positively docile. When Petruchio says that the sun is the moon, she goes all five-lights on him (it's no coincidence that Patrick Stewart is a classically-trained Shakespearean actor), not merely agreeing, but averring:

Then, God be bless'd, it is the blessed sun:
But sun it is not, when you say it is not;
And the moon changes even as your mind.
What you will have it named, even that it is;
And so it shall be so for Katharina.

If the audience forgets that this is all a show put on to trick a drunken tinker, or forgets that Kate chose to accompany Petruchio of her own volition, it looks indistinguishable from violent coercion inflicted by means of starvation and sleep deprivation rather than through sparing not the rod or the cane.

But since it is a show for some dude with a wicked hangover, it's moral suasion of a sort. And in the world of the play within a play, Kate agreed ex ante to subject herself to the terms of Petruchio's marriage agreement. Perhaps she knew something about her own character that could use some fixin'.

What price self-delusion, what price rehabilitation? Underneath the ribald comedy of the play, these are the questions ToTS encourages us to ask of ourselves. Reforming character is hard work, and it often requires advance planning and enforcement. In the Thomas/Shughart formulation, taming a shrew requires a non-euvoluntary constitution.

And if that's the case, third parties should be quite circumspect when they endeavor to break the terms of such a contract. Not all coercion is unjust.

Noah Smith is an Austrian Economist

Which of the following statements is true?

1. Absence makes the heart grow fonder.
2. Out of sight, out of mind.

Both of these are common aphorisms, and I'd wager that you, my esteemed reader, have found more than one occasion to deploy each one, and with nothing but the utmost sincerity. Context matters, obviously. Whether you sit in your FSU dorm room pining for your beloved back home in Pensacola, or if you're hitting the Panama City beach looking for some brief company depends heavily on the nature of the underlying relationship. On the game, if you will.

I'd like to close out the S&T series by exploring the one remaining game type: the non-cooperative, asymmetric game. Here's a sample one-shot game matrix: P1 (the Sovereign) chooses between Oppression (O) and Liberty (L). P2 (the constituent) chooses between Comply (C) and Revolt (R). This gives us the first two elements in the game, all that's left is the hard stuff. Stuff like modeling payoffs. Try this one to start with.

	C	R
O	10,5	8,-5
L	10,6	-5,4

Here, there's a unique Nash Equilibrium, for the purposes of illustrating the game. The NE is (Oppress, Comply). But the payoffs are not symmetrical. The sovereign gets more than the constituent. More what? It's standard practice in economics to hand-wave that question away as unanswerable. More perks of power, more wealth, more status, more access to mating opportunities, more whatever it is that slakes the inscrutable desires of elites' hearts. NB: some of the payoff split is rivalrous, some isn't. Positional goods and status rankings are axiomatically aspirational only*.

In lay terms, what we have here is a dictator's dilemma: as Sovereign, I want to preserve (or improve) this NE for the repeated version of the game, which could mean a few things. It could mean promoting productive capacity, it could mean (as in Cheung's example) intertemporally sharing the role of Sovereign, or it could mean throwing enough meat to the clerisy that they refrain from meaningful jawboning in their papers and pamphlets.

So in this post, Noah makes what amounts to a praxeological observation: a system's longevity alone lends us insufficient information to know whether the stresses in the game above are enough for an equilibrium shift. To know whether the Lindy effect has any analytical bite, you need a better model of the underlying game. Generalize that matrix up there, find the comparative statics, and then compare stabilizing forces with destabilizing forces. Do that, and then you can use the institution's longevity as a guide to its expected durability. Is America's GINI coefficient destructive? How about the growing police state? Interminable wars? Ideological rifts? Will these overpower patriotic sentiment?

Too early to tell.


post scriptum
I hope that this series of posts, casual as they are, helps you think about how constitutions are, um, constituted. Thinking about the differences in payoff structures and ex post enforcement have helped me understand under what circumstances the "social contract" might actually be a valid, useful concept. It also helps illuminate the deep, central role of rhetoric in ordering society. The comparative statics in this sucker are handy for grasping the roots of regime change, and of upstream rents, like education or law enforcement. If you're interested in tackling Buchanan's challenge to public choice scholars, you could probably do worse than thinking more carefully about some of these issues and including them in your work.

Cheers!

*You almost have to admire the moral cojones of nationalistic egalitarians. By advocating for both immigration restrictions and in-country wealth distribution, they forward the moral position that Americans' ability to access the luxury goods market is more important than Haitians' ability to access the supermarket. 

A Game of Institutions Book 4: Let Us Prey

This week, friend of EE Anthony Gill muscles in on the Roberts/Munger hit parade and talks Holy Turkey on Econtalk. It's one of the better episodes of all time, but that might be my biases talking, interested as I am in the public choice analysis of collusion between the estates and of using economics to talk about stuff not ordinarily associated with the miraculous world of simple commerce. And narrowly, Tony's chat with Russ is timely for your humble blogviator (@Spivonomist has as of this moment 74 followers and 1276 tweets for an index quotient of 0.05799373), since I've been sort of struggling with how to motivate the next chapter in the S&T saga.

Recall from last time, one institutional arrangement that's at least theoretically possible is characterized by a cooperative game with asymmetrical payoffs. That's a jargon-laden way of saying that everyone's better off under the arrangement, but some are better off than others. But it's not coercive. Imagine a Manor Farm where Snowball can actually leave without being turned into delicious rashers of crispy bacon. Well, where can we find examples of this out there in the real, wide world?

It strikes me having listened to Tony disserting at length that the rich history of orthodoxy and apostasy in Western religions has an awful lot to offer in this node. Consider that on its own, the Church can't be coercive. It takes collusion with the state to transform The Cross into a truncheon. Can you even imagine the horrors of the Spanish Inquisition happening without at least the tacit approval of the sovereign? It's worth noting that one of the few Continental refuges for the most unexpected of all inquisitions was Lithuania, the last European nation to be converted to Christianity (and even then only tepidly), a place where the Body of Christ walks with wooden legs and sits in pensive repose on waterlogged stumps. Seriously, you guys: Kryžių kalnas is something else, and the crosses there survived numerous attempts by Soviet authorities to remove them. It is one of the most bizarre oddities of Europe, if not the whole wide world. I have to avoid thinking about it too carefully or my head goes all swimmy.

But think about the rise of New World religions. Exit options provided just enough Tiebout competition to allow for some serious apostasy. That big "clunk" you heard in the early 16th century was a double-clutch gear shift as the First Estate flopped from predatory monopolistic coercion to something more closely approximating a modern corporate interest.

But here's the interesting thing about the kayfabe of religion: part of the aesthetic is asceticism. Men of the Cloth (and nuns in particular) were, but for the rarefied Vatican elite, generally of modest means. Of course, rent need not be material to be valuable. Risk pooling and reduction is mighty valuable under Mathusian conditions. As is positional station cachet. Respect of the community is tough to measure in bars of gold. At any rate, the appearance of the poor pastor suggests to me to be a nod to the apostasy threat when congregants observe the clergy accumulating treasure. "Why should I keep sending my silver to Italy when this Calvin guy is bidding lower?" The Mennonite sects here in the States seem to have this bit figured out exceptionally well. But it strikes me that the transition from total Catholic hegemony to perfect Quaker equality is the cooperative-asymmetric game rather than the coercive-symmetrical game. And the existence of the mega-church and the television evangelist suggests to me that it can be a durable game. If congregants believe they're getting something out of the deal (eternal salvation), they should be willing to put up with some wealth inequality. It's not all that different than buying tickets for a basketball game or a personal computer.

Right?

Anyway, let's get back to Lithuania. Just a quick visit, I promise. Even before Soviet times, Catholicism was heavily flavored. These days, there's a short list of state-sanctioned churches, mostly as a reaction to some of the more aggressive proselytizing in the wake of 13 January, 1991. The quick and dirty story is that missionaries descended on the newly liberated republic, tracts in hands and sermons on lips with the goal of obtaining all those sweet, sweet new converts. Missionaries weren't banned in the sense that they couldn't set up shop, but neither were they afforded special tax and property rights status like the established religions. My personal brush with this was a spot of trouble with getting married. I wasn't baptized in an officially-recognized sect, so the officious local priest gave us some (easily overcome, thankfully) grief about it. At any rate, it's too easy to reason from an outcome and say that Lithuania is trying to protect incumbent sects, to provide rents for the Catholic Church. Not in this case. Even at the height of its influence (not necessarily counting the Livonian occupation), the Vatican didn't have the same grip on Vilnius that it did on Paris. Instead, consider the possibility that the median Lithuanian voter is looking to cut hysteresis loss, to quell a nuisance. Ordinary practical secularism has been their daily BATNA since they first set up shop in the Land of Rain (the Lithuanian word for "Lithuania" is Lietuva, and the word for "rain" is lietus. Also, it rains for like half the year, so even if it's not good etymology, it's good enough for me). So if our doughty pikesmen of the Baltic find the asymmetries of religious institutions offensive, it's never bothered them before to shrug it off. Why should now be any different?

A Game of Institutions Book 3: The Sanctioners' Dilemma

Recall from last chapter the proposition I encouraged you to consider: though the reasoning may be fallacious or rooted in vice, people may be motivated by payoff asymmetries and previously-accumulated earnings. Let's consult our simplified table of game archetypes to see where we might look next.

	Cooperative	Non-Cooperative
Symmetrical	Coordination (Euvoluntary)	PD (Coercive-Voluntary)
Asymmetrical	BoS (Voluntary)	Hawk-Dove (Coercive)

In S&T, recall that euvoluntary constitutions require no ex post enforcement to maintain cohesion. I used the example of low-exit-cost partnerships to illustrate these. I think that some of the Ostroms' examples would qualify too. But once we start shuffling around the box above, we move away from the euvoluntary conditions toward... something else. I do hope you're willing to forgive me for staying in the "symmetrical" row rather than the "cooperative" column, but since I just got done posting about the Amish, I trust you'll be willing to bear with me.

Exclaves fascinate me. Pseudo-enclaves even more so. In the case of the Amish, we've got an extra layer of governance embedded (loosely) in the ordinary federal structure. But here's the fascinating bit. Unlike a Olsonian stationary bandit, the Amish lil' leviathan generates inalienable quasi-rents. After all, there's really no technology that allows a taxing authority to expropriate the warm sense of belonging to a community or the fellowship of hearth and kin. 

But, ha ha, there's quite obviously a private incentive to shirk. Amish individuals can obtain higher private utility by flaunting the rules of their society. Of course, since the SPNE of this is for everybody to shirk, it is in the constitutional interest to have an enforcement mechanism. And what could be better than yanking the club card? Credibly threaten to revoke the quasi-rents of family and community, and hey-yo, the decision calculus changes. Elementary economics.

Now, I'm not 100% sure that this sits squarely in the corner of the PD box, but at least in terms of expected utility, it's my understanding that Amish communities are marginally more egalitarian than, say, old world Europe. I'm sure that some families are more influential or wealthier than others, but the Amish Church itself lacks the hierarchy that characterizes the Catholic or Orthodox Churches. The local bishop is the community leader, but it's an unpaid, elected post. I'm not enough of an expert to know whether or not hereditary elites are common, but at least nominally, the Amish value the virtues of thrift, temperance, piety, prudence, and industry. Good work makes good people. An expression of Nicomachean ethics. Again, from an outsider's perspective, it seems as if envy within the community isn't as big a component of private motivation as it is among the English.

So yes. Shunning is coercive. But it has to be in a game that generates inalienable quasi-rents. No other punishment option is either appropriate or in the choice set. Besides, if it was rough enough for Socrates to guzzle hemlock, it's severe enough to keep wayward flock members in line.

A parting note: I had originally planned to calculate and share with you the comparative statics for all these games, but soon I discovered that LaTeX editors are both a pain in the rump to use and don't display for butt in my reader, so if you were looking forward to more "math", I'm afraid I'll have to disappoint you. Sorry.

Edit: As AG notes, bishops are (can be?) selected by lot (sources I've found in a quick Google search vary, so maybe it varies by community) and more importantly, the decision to shun cannot be made lightly. There's a risk of schism, and even if there weren't, there are increasing quality-adjusted returns to network size. If the strength of your organization depends on good members, you'd want to be dang sure that truncations are well and truly in the group interest. Over-pruning a tree is as fatal as drought.

A Game of Institutions Book 2: Beautiful Railway Bridge of the Silv’ry Tay!

I might be inclined to forgive the student who claims that Public Choice is the study of political rents. Even the very basic collective choice architecture work is undergirded by constituents' desire to organize for gain. The mere act of stumbling out of the Hobbesian jungle, twigs and brambles jutting from matted thickets of body hair counts as a political rent. But not all political rents are created equal. Last time, I asked you to consider the simple case where payoffs were symmetrical and alternatives to agreements were at worst, neutral. This time, I'd like to explore what happens when we play around with the symmetry condition. I'd also like to introduce a bit of heresy. Those of you with formal educations in economics may wish to consult a physician before reading further.

First, a quick review of some elementary ideas. If math gives you the heebie-jeebies, take heart—it's just shorthand for what goes on in folks' minds. Nothing fancy.

First up, something economists call the "discount rate". Have you ever wondered why you pay interest for a loan? Or why you earn money just by socking it away in a retirement account? It's not just because the value of a dollar is dwindling each year, though that's got a little to do with it. It's chiefly because on average, delaying the satisfaction of wants is uncomfortable. All else equal, I'd rather have a new pair of shoes right now than to wait another year. If we abstract from shoes, we can better say that all else equal, I'd rather have a claim on 100 bucks' worth of stuff right now than 100 bucks' worth of stuff a year hence. In keeping with tradition, let's use standard notation. A lower-case rho is our discount rate variable, and it's just a transformation of the interest rate r we see all the time:

So, if the interest rate someone would accept is 5%, her discount rate would be .9524 or thereabouts.

Again consistent with textbook conventions, a lower-case pi will be our payoff variable in each period, and for the accumulated payoff, we'll use an upper-case pi. Therefore, in generic terms, an infinitely repeated game will have payoffs for player i of:

You'll note, of course, that I'm assuming homogeneous discount rates, which as we all know right well from the behavioral literature, is poofy-headed of me. As we continue with this series, I'll relax this assumption to show how elites can turn time preference differences to their advantage. If you need to slap leather for an aphorism in the meantime, reach for the six-shooter labeled "patience is a virtue."

The next bit we need to do before we stop for the day (mostly for the sake of length than anything) is to think about the components of the payoff. In most elementary game theory lectures, this is just some parameter used to think about how we get to some equilibrium strategy or another. But in terms of economic behavior, the elements of the payoff are what we spend a lot of time thinking about here at EE. These are the moral intuitions, biases, jealousies, irrationalities, groping uncertainty, and beautiful human error that characterizes each and every one of us in our brief, blemished corporeal time on this tarnished earth. Ahead of our next installment, think about this little heresy:

The lambda and xi parameters there are personal preferences for fairness in (a) prospect and (b) retrospect, respectively. When economists talk about this sort of stuff, some will acknowledge that (a) is of analytical concern (and often will consider it to be of normative import), but most (all?) will agree that (b) is an unforgivable logical fallacy. We call it the sunk cost fallacy, and if I had a nickel for every student who's fallen for it on a final, you can bet your bottom dollar I'd be posting this from my own private Caribbean island instead of my perch here on Fenrir's shaggy mane.

Why do I commit the sin of including a sunk cost in a payoff function? Because if it trips up college students by the truckload, imagine for a moment that it might be a pretty common fallacy among ordinary constituents. Strong enough even to be part of Zwolinski's argument in favor of BI (since this is still in the middle of being debated, I am electing to refrain from mining out the balance of the links. I do hope you understand) as a matter of practical observation. Remember that part of what we're doing here at EE is investigating the contours of commonplace moral intuitions, and that includes holding our nose and accepting the weird proposition that not everyone thinks like an economist.

Okay, so let's leave this to stew for a little while. Remember that one of the things I'm trying to model in this series is apostasy, so consider what things might look like when xi > 0. And consider this post a bridge as we move from symmetrical games of cooperation to asymmetrical games of cooperation. As we tiptoe from Locke to Rousseau.

Apostaspiphates, Heresiarchs and Institutional Change: A Euvoluntary Conjecture

---

Me: I found the word "heresiarch" totally by accident. Happy accident. Like a rainbow in the dark.

Ride the tiger.

 Adam: And now it is my new life's ambition to become one.

 Me: I can't seem to find a similar word that defines the originator of an apostalic movement.

 Adam: Let's make one up. Is apostiarch too obvious?

 Me: Hm. Apostasy is necessarily personal. Heresy is doctrinal. I'm not sure there even can rightly be such a word. We need a Sarah Skwire to sort this out.

~five minutes pass~

Me: Apostaspiphate: from the Greek, meaning "the spark that lit the revolt." Someone who incites widespread apostasy.

---

A "heresiarch" (used here yesterday without explanation) is a leader of a heretical sect. Usually, it's someone who pens the doctrine and gathers the followers, though strictly speaking, I suppose those roles need not be occupied by the same person. And the word itself is neither good, bad, nor indifferent. Jesus of Nazareth was a heresiarch, so was Vladimir Lenin, so was John Maynard Keynes. The defining characteristic was an active challenge to the orthodoxy, followed up with at least some attempt at proselytism. Perhaps it's the lame attempts at the latter, coupled with tiresome saturation that prompted David Brooks to pen his marvelously lulzy jeremiad against thought leaders in the Thymes.

Contrast heresy with apostasy. Heresy is an active sundering; it implies the presence of a cleaver-wielding ideological chef. Apostasy is quiet, personal. Apostasy is the foam on the cappuccino brewed single-serving in the Keurig of despair. Apostatic cascades need fuel for the spark to light a conflagration. And I suspect this is much to the chagrin of wannabe Che Guevaras and Thich Quang Ducs out there. If it hasn't been raining, that mean ol' levee just ain't gonna break.

This is relevant to EE because my bro Adam (G., in the opening dialog yonder) and I have been scritching each others' noggins over the seeds of regime change for a while now. He's got a pretty good theory about how ideas (moral intuitions included) coalesce into institutions, and I'm leveraging the S&T paper to work on the game theory behind constitutional formation and duration. But the teeny-tiny element that could use a spit-polish is the transitional point. Why apostasy? Adam's been modeling it as a random event, but I've found this remarkably unsatisfying. I think my insipid little neologism can maybe shine a little penlight into a previously dark nook. All else equal, it's a minor point, but it fits with this series, so I think it's appropriate to include a few words on it.

The flusterating bit is that it's pretty tough to know ex ante if an apostaspiphate will pivot the ex post constitutional arrangements towards a more euvoluntary suite of institutions. Modeling that will take some more noodling.

Apologies if this post is as insufferable to you as it seems to me. Think of it as an extended footnote if that helps.

A Game of Institutions Book 1: Euvoluntary Coordination

I beg your indulgence for a brief series of posts. In them, I shall expand on the Shughart/Thomas piece, discussed here. Casual readers can think of this as a brief introduction to elementary game theory. For my more knowledgeable readers, think of this as some preliminary spitballing prior to an actual project.

Before I get to the specifics, I'll need to walk you through the basics of practical game theory. I apologize if this is old hat—please feel free to skip ahead if you like.

First off, the Twitter version of game theory. It's a way to analyze strategic behavior. That's it. Nothing fancy. There are three basic elements to any game: players, payouts, and choices. Most instructors will start out with 2-player games to illustrate the mechanics of finding an equilibrium solution, since it helps students moisten their feet without the risk of drowning. We can do the same here, but discussing constitutions necessarily implies more than just 2 players. Getting there will be easier if we start with the simplest case first: euvoluntary constitutions and the Coordination Game.

A (sequential) two-player CG goes a little a-something a-like this. P1 chooses to play left (L) or right (R). P2 then also chooses to play L or R. If both players play L, each earns 10. If both players play R, each earns 5. If either one plays L and the other plays R, each earn 0. Here's the payoff matrix, with P1 and P2 payoffs separated by a comma:

	L	R
L	10,10	0,0
R	0,0	5,5

The actual amounts in the cells are for illustration only. What's important here is the symmetry: P1 and P2 are equally better off by picking the same choice than by accepting their BATNA. And worthy of note for euvoluntary exchange purposes, their BATNAs are identical (nb: I know that the proper parlance would be "Best Alternative To a Coordinated Outcome, but let's just stick with our tried-and-true acronym). With symmetrical payoffs, none of the players' sense of fairness or justice is offended. We work together to produce something, then split the proceeds even-Steven.

What's the point then of a constitution? In a sequential game, I pick L, then you pick L, we're good to go. Equilibrium outcome, hooray (and yes, [R,R] is also an equilibrium outcome)! Well, if we're playing a repeated simultaneous game, it'd be nice to know beforehand what the expectations are for play. Think of it as a preliminary cheap-talk round. I say "left" you say "cool" and off we go. Recall from S&T that a euvoluntary constitution is one that does not require ex post enforcement to remain valid. This qualifies. There's no upside, no incentive to play anything but the agreed-upon action.

To make this game more interesting, you can include more players, discount rates, production functions, and whatever other bells and whistles you might like. But the core observation that no coercion is needed to reinforce the terms of the constitution remains so long as we've got symmetrical payoffs and a barren BATNA.

So what are some real-world analogs to this coordination game? Well, partnerships come to mind. Think about the default legal rules for a partnership: there's joint and several legal liability, but more to the point, any of the partners can dissolve the partnership at any time for any (or no) reason whatsoever. This is an attractive feature for firms wishing to signal euvoluntarity.

Consider this, then. Marriage, under no-fault divorce, is closer to the default rules for partnership than it was under a statutory harm regime. That is to say that the rules for divorce we have now are more euvoluntary than they were prior to 1969. If you believe Wolfers and Stevenson (and you should, their econometrics are impeccable), domestic violence rates and suicide dropped precipitously because of no-fault divorce, with no long-term impact on overall divorce rates (yes, there was a spike at the time of the regime change, but you can think of that as pent-up demand). But what if the more-euvoluntary institutional rules were in fact unfit for marriage? Marriage rates in the US began to tank in the 1970s, and the median age of first-time married couples has risen (CDC and Census). If you believe Charles Murray, these trends rend asunder the tissue paper of society. Let's ditch the normative assumptions and take at face value both the Wolfers/Stevenson claims and the Murray conclusion. Is it possible then to have an increasingly euvoluntary institution that produces decreasingly euvoluntary outcomes? Another way to think about this is whether or not we can have instances of private goods that add up in a separating equilibrium to a public bad.

If that smells a little bit like a false dichotomy, it's because it probably is. There are other ways to discourage single parenthood (on the margin, naturally) while preserving liberal freedom of association. Reconsidering the move away from virtue ethics towards Kantian moral imperatives or naked utilitarianism might be a good place to start. Aspirational sentiments in fiction might be another. Solving great social problems is off-topic here, I merely wish you to consider if Simpson's Paradox need apply to institutional choice, and if it does, what are the implications for default rules?

Okay, so I didn't get all that heavy into the game theory in this post. For forthcoming posts in this series (under the 'S&T' tag), I'll make things a little bit more rigorous. I'd like to get to where we're estimating comparative statics for an n-player game, including terms for fairness preferences. I hope to convince you that this approach can help explain why we see the sorts of big institutions we have, and if I do my job right, that both Locke and Rousseau can be correct about the origins of the state.

Sounds fun, doesn't it?