Topic 17: Tragedy of the Commons Experiment

No one in our table take too many fish, because it is simply too hard to 'get' fish. Each person only gets two to three fish. Everyone did tried to take as many as possible, but it is not easy to do so. Only I sacrifice the number of fish I took for the good of the community, because I done this kind of exercise before. The society neither reward person who sacrifice nor person who gain the most benefit, because everyone want to gain the most profit and they don't care about other people. Our strategy change in game 2. We decide to only take two fish on each round and take all on the last round. It does make a difference to know what the rewards are. It is not possible to maximize fish caught per person as well as the number of fish remaining in the pond at the same time, because to maximize fish per person is to make sure the lake is empty. A local area such as sofa area has situation arises. Everyone want to sit on the sofa after lunch, but there are not enough sits for everyone. The problem can be solved through sharing the sits and take turns. Oil and coil are natural resources that are common resources. Global commons are outer space and ocean. Outer space and ocean are not being used wisely because they are not being used completely and efficiently. Our knowledge to those area is small. Not all the resources within the ocean or outer space are being used wisely. People can research more on how to use resources completely.

Topic 16: Game Theory and Chicken

Game theory assumes that people make rational decisions. I think this assumption is valid because no matter what you will make the decision that benefit you the most, even you know other one is going to choose to silence, you will want to be free and choose to confess other people's crime. If you know the other one is going to confess, you still confess too to 
I think the bad outcome might not be always inevitable because after thinking though people maybe able to cooperate and trust each other on the issue. For example: If everyone choose to chase other girls instead of the blond, everyone gets a girl. Although they didn't maximized their self-interest, but they are getting result they would have get. The better outcome that Nash says in the video is that all guys don't chase that blond instead they chase four other girls, so that they won't get in each other's way and they don't insult the other girls. If they all go for the blond, blond will reject them and rest of the girl will reject them too. Adam Smith's invisible hands won't work if the situation is prisoner's dilemma.

Topic 15: What is a Monopoly

The three main characteristics that make a firm a monopoly are only one seller, producing an unique product, and having barrier to entry. The quantity a firm produced is at where the marginal cost and the marginal revenue intersect. The price of the output will be the demand at that same quantity. The costs of the monopolist are just the costs of the production and the benefit of the monopolist are the profit earned from every output they sell. The costs to the society is the consumer surplus that is lost in the monopoly market. One commentator mentions that one of the problem with monopoly is that it transfer income away from consumer to themselves, but economists are not concerned with this. Economists are concerned about inefficiency. Economists encourage monopoly that developed from efficiency.  I agree with there concerned. An efficient firm is very important. It uses its resources to produce most of it. Monopoly can be good in a sense that if average cost is decreasing output, then large scale manufacture in production. I think it is not worth a try to attain a monopoly, because although monopoly is very inefficient. The surpluses are not maximized and deadweight loss occur.