A couple weeks ago, I read an interesting article about how illegal immigrants can sway Electoral College votes. As it turns out, the Constitution bases electoral votes off of population counts from the census, which in turn must count all people–citizens, legal immigrants, and illegal immigrants–living in the states. Thus, even though only citizens can vote, states with larger numbers of immigrants receive a disproportionate number of electoral votes.
This has obvious electoral consequences. In particular, California gets hammered. California currently has 55 electoral votes but would drop to 50 if the census only counted citizens. On the whole, traditionally red states tend to gain from the alternative method of counting.
Based on this, the article makes the following causal claim:
If President Obama wins reelection by three or four Electoral College votes next month, the reason may be simple: noncitizens, mostly immigrants, who donβt have the right to vote.
But are immigrants really causing Obama to win reelection? Well, yes, but in a very narrow sense of causation. Presidential campaigns, if nothing else, are extremely strategic. The candidates receive a set of rules and base their strategies off the rules. In such a strategic world, you cannot change the rules and hold strategies as being constant, since the strategies are a function of the rules.
To better understand the relationship, consider the following game. All you have to do is pick A or B. If you pick A, I give you $1. If you pick B, I kill you.
Obviously, you are going to pick A. But that does not mean you prefer A. You just prefer the outcome associated with A. If I were to flip the rules on you and say A leads to your death and B pays you $1, you will suddenly really like B and really hate A.
So now imagine we switched the rules of the election to only grant electoral votes based on citizen population counts. Suddenly, some of Obama’s electoral maps are no longer winning strategies. Will Obama naively continue to pursue those strategies? Certainly not–not anymore than you would continue to select A after I switched A from rewarding $1 to killing you. Obama would spend more time and money in new “must-win” states. Romney would likely follow suit. Obama would probably campaign on different issues. Romney would as well. From here, it is not immediately clear who would win the election, since some red states might switch to blue states due to the new policy offerings and vice versa.
In fact, it is not even clear to me whether Romney would have been nominated or if Obama would have been elected in 2008 under the different set of rules. Indeed, the only clear implication of switching the rules is that both candidates would have selected more conservative policy positions. But this is exactly what you should expect when the median (electoral) voter shifts to the right.
Overall, the original article reflects a common problem with our understanding of causation. James Fearon’s article on counterfactuals is a good reference here. When making a counterfactual argument, his guideline is that a premise A only causes B if in the absence of A we have an absence of B. In other words, when making causal arguments, we must give equal weight to the counterfactual story. What does a world without A look like? If we could still reasonably find that B persists in the absence of A, it is hard to claim that A causes B.
This process isn’t too difficult when players are nonstrategic. But throw in strategic players and you really have to do a lot of work. In fact, game theory has a whole process of calculating such changes called comparative statics. Comparative statics are known for producing brutally counterintuitive results. Below is an example with soccer penalty kicks. Strikers actually aim to their weaker side more often than their stronger side. Weird, right?
Absent learning a lot of game theory and learning how to calculate comparative statics, I suppose the moral of the story is to be very careful when making counterfactual claims and to seriously consider how the entire strategic interaction might change if you alter one of the inputs. Apologies for the somewhat unsatisfying conclusion.
Disclaimer: I either read this book because it just won the Lepgold Prize or because Goemans will be grading my comprehensive exam in a week.[1] I will let you decide which is true.
Personally, I study unitary actor explanations for war. The unitary actor assumption treats a state as though it were a single entity; there are no presidents, there are no parliaments, there are no people, and there are no revolutionaries. These are clearly strong assumptions, but they are useful and justifiable.[2]
War is quite puzzling from the unitary actor perspective. After all, war is costly to both sides because it destroys stuff. Why can’t we just implement the would-be results of war without actually fighting? In this manner, both states are better off since they get what they would get from fighting but without having to pay those costs. This is war’s inefficiency puzzle.[3]
Chiozza and Goemans start with this puzzle and then break out of the unitary actor framework by looking at leaders’ incentives, which has become a popular trend among recent scholarship. Presidents and dictators control their countries’ armies at least to some degree, but the “costs” they pay for fighting may not be the same as the costs that their citizens pay. We normally think of this as being beneficial to the leaders–citizens do the actual fighting (and dying) while the leaders sit back at home and wait for the favorable results. In contrast, Chiozza and Goemans care about what happens to the leaders after war ends, especially when things go badly. Do they retire? Do they go to prison? Into exile? Die? Presumably, the expected fate of the leader weighs heavily on his decision to fight, which in turn changes our expectation on when wars ought to break out.
Specifically, Chiozza and Goemans identify two new causal mechanisms for variation between war and peace: fighting for survival and peace through instability.[4] Let’s start with fighting for survival. Imagine I am the repressive Dictator of Virgon, and I am expecting to face domestic upheaval in the near future due to a food shortage. If the domestic uprising is successful, I expect to lose my head–I have been a brutal dictator for the last ten years. Thus, I have two choices: sit back and let the revolution happen or start a dispute with neighboring Aerilon. If I start the fight against Aerilon, I can send some of the military leaders most capable of plotting a coup against me to the front lines. If the war goes incredibly wrong and they die, I am little safer because I am short a few more coup plotters. If the war goes well, suddenly I am a military genius and everyone loves me. Or the war causes the citizens to finish their rebellion. In the first two situations, I am much better off because I am alive. In the third situation, I’m dead–but, hey, I was going to die anyway. So what the hell. I might as well fight.
This has the flavor of traditional diversionary war, so it is worth noting their emphasis on the role of truncated punishment in the theory. Imagine instead that I were the President of Canceron. We are a fledgling democracy. My power is somewhat stable but not as firm as the U.S. President’s is. I face plenty of domestic opposition, some from within the government and some from within the military. Suppose I am facing that same food shortage. Again, I can choose to attack Aerilon or not. If I don’t, it is quite likely that one of my political rivals will oust me. But we are a fledgling democracy with some rule of law, so I will go back and live a nice retirement on my ten-acre estate. But fighting is much riskier. Yes, I might be successful and save my presidency. But I could also spark further domestic upheaval from my own military. And if they launch a coup to overthrow me…well, I might just lose my head. So I decide to leave Aerilon be. This is Chiozza and Goemans’ peace through instability mechanism; I avoid wars because I prefer taking a lovely retirement with certainty to a gamble between remaining president and dying.
We can attribute the difference in outcomes due to the truncated punishment. The Dictator of Virgon has nothing to lose. His punishment (dying) can’t get any worse, so he willing to fight the war. The President of Canceron, on the other hand, is not. His possible outcomes is not truncated. Fighting can make things much worse–his outcome can switch from retirement to death. Hence he’s not fighting the war.
That, in a nutshell, is the argument. The authors spend chapters three and four empirically investigating the link between war and war outcomes to leader fate. The empirics are accessible to readers without much statistical background, so that is a huge plus. The fifth chapter then qualitatively looks at leader transition and war in Central America from 1840-1918. They find that their theory explains the outbreak of a good portion–though not all–wars during that period. Credit Chiozza and Goemans for being honest here. A single theory will never explain all wars, since wars happen for a variety of reasons. I too often read material that wants to explain everything, which is laughable. Chiozza and Goemans instead make an honest effort and do not unnecessarily oversell their theory.
Finally, I offer two practical reasons to read the book. First, it is just over 200 pages. The writing is succinct, clear of extraneous information[5], and you can easily read it in half a day.[6] It can also be had on Amazon Kindle for about $15, which is remarkably cheap for an academic book that only came out a year ago. Go check it out.
[1] You may then wonder whether I actually believe this book deserves five stars–after all, if I truly thought this book was terrible, I have incentive to misrepresent. However, rest assured that I think it is good. After all, if it were bad, I could have just written no review. But by writing a review, I face potential audience costs from readers who pick up this book because of me and then think it is terrible. Thus, the audience costs make my signal credible. Game theory at work, qed.
[2] See the following video:
[3] See the following video:
[4] Technically, they split fighting for survival into two categories, but I will gloss over it for the sake of time.
[5] Fine, there is extraneous information, but it is in the form of humorous anecdotes, so that makes it okay.
[6] Unfortunately for Goemans, my comprehensive exam will not be succinct. At all. And my dissertation? Well, let’s not go there…
Let me start by start by saying that this book is actually four stars or zero stars, depending on the audience. This is true for most books, though, so I err on the positive side.
Let’s start with the reasons you should not read this book. You might read the title and think “Gee, I have always wanted to learn about bargaining theory” and therefore decide to read the book. Bad move. This book is completely inaccessible. In the introduction, the author says that the reader only needs a decent understanding of subgame perfect equilibrium to get a lot out of it. This is a gross underestimate–you need at least a full year of game theory to get anything substantial out of the book and two years if you really want to understand it. Even then you will probably scratch your head from time to time. (In the conclusion, the author also says the book “has centered on some basic, elementary, models.” I found that quite humorous.)
The phrase “death by notation” comes to mind as you read this. The author says he intends the book for graduate level economists, and it shows. Variables are often defined once and then never interpreted a second time during a proof. You will often find yourself going back to try to figure out what all of the notation means. (This is a problem for just about all game theory texts, though, which is why I stick to mostly English in my textbook.)
The book also lacks adequate illustrations and figures. Game trees and strategic form matrices help readers understand the flow of the interaction. Figures here are rare and are often baffling. Without them, you will be left to look back at the notation, which has its own problems. (Like before, lack of sufficient illustration is a problem for just about all game theory texts.)
On a personal level, the author spent way too much time discussing the Nash bargaining solution. Personally, I find the Nash bargaining solution to be uninteresting except at the very basic level. Your mileage may vary. And, if you are like me, then you can just skip those sections like I did. So I can’t really fault it for this.
Despite all that, you should read this if you are interested in bargaining and have a good understanding of game theory. I don’t know of any books that are more thorough than it. I originally picked it up for some background on my risk aversion and sports contracts paper, and it was extremely useful. The author covers just about every type of bargaining game you will find in the literature with many variations of each model. So if you want to learn about bargaining, you should spend a few hours reading through it.
For practical purposes, chapter four (bargaining with risk of breakdown), chapter seven (bargaining over bargaining), and chapter nine (incomplete information) are the most useful. Four and seven probably have the most interesting application possibilities. I might reread the seventh chapter again at some point and think about how to relate it to international relations. We seem to have a lot of bargaining models in IR without much discussion of why bargaining protocols should take one particular form and not another. Perhaps this will lead to some publishable research.
I leave you with the following takeaway point: if you follow my work, you would probably enjoy reading this book, and it may qualify as required reading for you; if you found this page by randomly searching the internet for reviews of the book, you should think twice.
McDonald’s Monopoly is back. As always, if you collect Park Place and Boardwalk, you win a million dollars. I just got a Park Place. That’s worth about $500,000, right?
Actually, as I show in my book on bargaining, it is worth nothing. Not close to nothing, but absolutely, positively nothing.
It helps to know how McDonald’s structures the game. Despite the apparent value of Park Place, McDonald’s floods the market with Park Place pieces, probably to trick naive players into thinking they are close to riches. I do not have an exact number, but I would imagine there are easily tens of thousands of Park Places floating around. However, they only one or two Boardwalks available. (Again, I do not know the exact number, but it is equal to the number of million dollar prizes McDonald’s want to give out.)
Even with that disparity, you might think Park Place maintains some value. Yet, it is easy to show that this intuition is wrong. Imagine you have a Boardwalk piece and you corral two Park Place holders into a room. (This works if you gathered thousands of them as well, but you only need two of them for this to work.) You tell them that you are looking to buy a Park Place piece. Each of them must write their sell price on a piece of paper. You will complete the transaction at the lowest price. For example, if one person wrote $500,000 and the other wrote $400,000, you would buy it from the second at $400,000.
Assume that sell prices are continuous and weakly positive, and that ties are broken by coin flip. How much should you expect to pay?
The answer is $0.
The proof is extremely simple. It is clear that both bidding $0 is a Nash equilibrium. (Check out my textbook or watch my YouTube videos if you do not know what a Nash equilibrium is.) If either Park Place owner deviates to a positive amount, that deviator would lose, since the other guy is bidding 0. So neither player can profitably deviate. Thus, both bidding 0 is a Nash equilibrium.
What if one bid $x greater than or equal to 0 and the other bid $y > x? Then the person bidding y could profitably deviate to any amount between y and x. He still wins the piece, but he pays less for it. Thus, this is a profitable deviation and bids x and y are not an equilibrium.
The final case is when both players bid the same amount z > 0. In expectation, both earn z/2. Regardless of the tiebreaking mechanism, one player must lose at least half the time. That player can profitably deviate to 3z/8 and win outright. This sell price is larger than the expectation.
This exhausts all possibilities. So both bidding $0 is the unique Nash equilibrium. Despite requiring another piece, your Boardwalk is worth a full million dollars.
What is going wrong for the Park Place holders? Supply simply outstrips demand. Any person with a Park Place but no Boardwalk walks away with nothing, which ultimately drives down the price of Park Place down to nothing as well.
Moral of the story: Don’t get excited if you get a Park Place piece.
Note 1: If money is discrete down to the cent, then the winning bid could be $0 or $0.01. (With the right tie breaker, it could also be $0.02.) Either way, this is not good for owners of Park Place.
Note 2: In practice, we might see Park Place sell for some marginally higher value. That is because it is (slightly) costly for a Boardwalk owner to seek out and solicit bids from more Park Place holders. However, Park Place itself is not creating any value here—it’s purely the transaction cost.
Note 3: An enterprising Park Place owner could purchase all other Park Place pieces and destroy them. This would force the Boardwalk controller to split the million dollars. While that is reasonable to do when there are only two individuals like the example, good luck buying all Park Places in reality. (Transaction costs strike again!)
This semester, I am TAing for Civil War and the International System at the University of Rochester. These are the slides that I am using for our midterm review session. They cover how to read academic articles, how not to write a bad in-class essay (which should be the subject of a full blog post at some point), and some material related to the class directly. The first two items should be useful to people outside of the class. I can’t say the same about the third.
Anyway, click here for the slides. Also, it is a good idea to read over the full blog post I have on how to read an academic article.
Apparently “Iran threatens attack” is the top trending search on Yahoo right now. Here’s a news story of what is going on. Apparently some general in the Iranian air force (Amir Ali Hajizadeh) said that if Israel strikes Iran, Iran will retaliate by attacking American bases in the region.
Umm. Okay.
Iran will do no such thing. The American public does not have the will to engage Iran at the moment. If someone will launch a preventive strike on the Iranian nuclear program, it will be Israel, not the United States. (And, as Israeli officials are finally conceding, this is an unlikely outcome.) But do you know what would give the American public the will to fight? I don’t know, how about an attack on American bases? If Iran initiates on the United States, it undoubtedly ends badly for the Iranians. In turn, anyone who has spent two minutes learning backward induction (see video below) knows how preposterous Iran’s original threat is.
This news story reflects a curious and disturbing trend in American news media. Whenever some crazy person from another country says something inflammatory, it gets reported as though it is serious business, even if it is in no way the actual policy of the regime in charge. Then rhetoric explodes for no particular reason.
The only thing Americans should take away from this news story is that Amir Ali Hajizadeh is a complete idiot.
(Of course, we have some silly people in our country who say silly things, and I am sure that the Iranian media also reports them as though they are serious. This goes both ways.)
A while back, I started uploading fullcourses on Udemy, one of those free-online-education-for-all websites.[1] The results have been…not at all encouraging. I know this is a small sample[2], but I currently have four reviews between the two courses. They average out to exactly two stars. Yikes!
Is it me? I don’t think so. I checked my YouTube statistics. This year, my videos have received 1388 likes and just 80 dislikes, or roughly 95% positive. Strangely, the quality my videos on Udemy is much better than the average quality of my videos on YouTube; the Udemy videos have all been shot recently with a professional microphone, while the YouTube videos are a combination of those and some with flat terrible sound quality.
So what gives? I think the answer is in the type of students looking at each of these videos. Most of my YouTube viewers are American, British, Canadian, or Australian. I hypothesize that these students have long university lectures, get bored, and prefer finding their material in short clips. They are the YouTube generation indeed. I have long understood this to be my target audience, and have correspondingly made sure to keep my videos under ten minutes whenever possible.
Udemy, meanwhile, does not keep statistics like YouTube does, but it is safe to say that I am looking at a completely different audience. Udemy emails you whenever someone enrolls in your course, and the names very rarely sound English. And, if one the reviews is indicative of anything, they want longer lectures:
Lectures should be longer, and it’s fundamental the presence of more examples. The topics starts and ends very soon, and it’s really hard to catch something concrete.
I think this highlights a strange dichotomy in online education. From what I hear, free online course offerings (Coursera, MITx, Udemy, etc.) draw a bulk (and perhaps a majority) of their students from places without access to affordable, quality educational institutions. They replace primary teaching. In the United States, Canada, Australia and Western Europe, online education supplements preexisting university education[3] or is used as a form of entertainment, not unlike watching PBS documentaries. Westerners dread clicking on 60 minute videos, either because they just want you to get to the point so they can complete their homework assignment or because faster paced clips are more entertaining. Any extraneous information is just that: extraneous. If you aren’t providing them with the answer to their particular problem, it’s time to move on.
It will be interesting to see how online education evolves over time. Currently, institutions like Stanford, MIT, and Yale essentially replicate the offline experience online. This seems to draw more international viewers. My niche has been providing the short clips, and I have pretty much monopolized that market for game theory and am currently trying to do the same for international relations. I suspect my method is ultimately the better way to make money (by running more ads and selling books to Western people with more money) and to draw people to attend a particular university (again, since Western people have more money).
I will not speculate about normative implications here. The former strategy certainly seems most benevolent, and there is nothing wrong with that. However, everyone else seems to be going that direction, so I will be sticking to the short (but financially prudent) clips.
[1] Udemy allows instructors to charge for courses, which puts an interesting spin on the concept of free-for-all.
[2] I once complained when Game Theory 101: The Complete Textbook got its first review, which was one star. But all reviews since then have been four or five stars, so it is now sitting pretty at 4.3 stars overall. Note that 4.3 rounds up to 4.5, so it actually appears better than it really is.
[3] I am not referring to online institutions like University of Phoenix here, which could be the subject of a different rant altogether.
Formatting images for Kindle is a huge drag. The official KDP FAQs are laughably underdeveloped here, basically telling you that the four most common image types are supported (gee, thanks!) and not much else. Personally, I have completely redone the images in my textbook Game Theory 101: The Complete Textbook at least three times now, most recently because the way Kindle compresses images changed without any notice. I am writing this post to impart my knowledge on you.
Here are the most important time/money saving tips:
This process is going to suck. You will think you are doing everything right, then the Kindle uploader will find a way to completely screw you over. An image will stop appearing. The image will appear blurry. Your document size will suddenly explode. You will become unbelievably frustrated at some point. Accept it now, and understand you will likely have to do some experimentation to fix these problems later.
Kindles (and the .mobi file extension) were created to display text. Images were very clearly an afterthought. However pretty your image looks on your computer screen, it is not going to look nearly as pretty once you have uploaded it. Sorry.
Do not use fine lines in your images. To compress file sizes, KDP evidently eliminates random lines of pixels from your images. If parts of your image contain lines that are only one or two pixels thick, those lines may magically disappear in the final version. In other words, make your images as blunt as possible. You can’t control which lines disappear, but that will not matter much if no single line is crucial to the image as a whole.
By extension, if your image contains words, be careful which font you use. I originally used Cambria in many of my game theory payoff tables, but Cambria has a lot of numbers and letters with very thin lines. (The middle part of an e has this feature, for example. Without that middle line, you are looking at a c.) I switched over to Franklin Gothic Demi. It is blocky and ugly in PDFs. But Kindle is not PDF world. Blocky texts look great in Kindle world. You can also consider bolding other fonts to manually create blockier text.
Do not create images larger than what you are using for your final product. In the normal publishing world, you should blow up all of your images, save them as large files, and shrink the dimensions once you have put them in the file. This ensures that the dpi (dots per inch) of the images remains large, which is important for printing purposes. But Kindle world is not the normal world. Following normal advice leads to two problems. (1) Kindle will randomly decide to remove lines of pixels, creating the problem described above. (2) Kindle will retain the larger file size, thus increasing the size of the document without changing the quality of the image on the screen. This means you will be unnecessarily paying greater delivery costs.
You should also compress your images. To do this, I use IrfanView, which is the greatest image cropping software ever created. Simply paste the image into IrfanView and press “s” to save. When you choose to save as a JPEG, it will give you a range of quality options from 0 to 100. I suggest selecting 50 here, which is in line with KDP file size control guidelines. If you choose a smaller amount, the colors of the image will start to bleed into one another. Anything more hardly changes the observable quality of the image in the Kindle but sucks up file space. (And we want to shrink this to save on delivery costs.)
Finally, some basic infromation: If you are writing your book on Word, you need to use the INSERT -> PICTURE command. If you copy/paste an image directly into the document, the image has a nasty tendency of disappearing when you upload the book. If you have a lot of images in your book, I suggest adding this to Word’s quick access toolbar.
Following these guidelines has decreased Game Theory 101‘s delivery costs by $0.03. While that might not seem like much, if you sell eight copies a day, that’s almost $90 over the course of the year. It has also increased the attractiveness of the book, which one would imagine correspondingly increases sales.
Let me know in the comments if you have any other tips, and I will be glad to add them here.
I just got back home from Wegmans. Going over the receipt, I noticed that the cashier neglected to scan my coffee beans, so my espresso is free for the week. (See footnote.) Small victory.
Now, I felt a little bad when I noticed the error. I blame my mom for this. But then I started thinking–should I really have any moral obligation to correct the error?
The answer may appear trivial. My mom would say yes without any second thought. However, consider this:
Register errors happen.
Retailers knows this.
Therefore, they increase the prices of these goods by some small amount to recover their losses. Call this the liar’s tax. (I name it this not because the liars pay it but rather the presence of the liars forces retailers to include it in the price of goods.
If I correct the error, then I am essentially being double taxed, once because I have to pay for the good whereas a liar would not and twice because I have to pay more for the good than I would have to if liars did not exist.
So, I ask again: do I have a moral obligation to correct the checkout error? If I do, I am penalized twice for being an honest man. If I don’t, should I feel guilty?
Here’s how society should resolve the problem. Let’s begin a social norm not to correct checkout errors. Never ever ever ever ever. This will increase the liar’s tax to compensate for all of the errors. However, now liars and honest people are paying the exact same for the good in expectation. Retailers will complain that they are losing money by having no one correct the errors. But that is bullcrap–they are collecting that lost money through the liar’s tax they collect on all correctly processed sales.
Footnote: At Wegmans, you must weigh and label your own coffee beans. In the two plus years of living in Rochester, the label maker has worked effectively exactly twice. Usually, the label sticker fails to automatically come off the back paper, so you have to peel it for yourself. Today, the label printed at an angle where the barcode was supposed to go. So the cashier probably scanned it, but the register didn’t take it, and the cashier failed to notice that. But you’d think a business operation as large as Wegmans could develop a solution to a problem that has been going on since at least summer 2010.
William Spaniel 