Yong J. Yoon

Symmetric Tragedies: Commons and Anticommons*

An anticommons problem arises when there exist multiple rights to exclude. In a lengthy law review paper, Michael A. Heller has examined “The Tragedy of the Anticommons,” especially in regard to disappointing experiences with efforts to shift from socialist to market institutions in Russia. In an early footnote, Heller suggests that a formal economic model of the anticommons has not been developed. This paper responds to Hellers challenge. We analyze the anticommons problem in which resources are inefficiently underutilized rather than overutilized, as in the familiar commons setting. The two problems are shown to be symmetrical in several respects. We present an algebraic and geometric illustration and extend the discussion to several applications. Of greater importance, we suggest that the construction is helpful in understanding the sources of major value wastage in modern regulatory bureaucracy.

Generalized Increasing Returns, Euler's Theorem, and Competitive Equilibrium

As worked out a century ago, the neoclassical theory of distribution was analytically as well as ideologically satisfying. The simultaneous determination of input and output prices through the operation of factor and product markets seemed to close the explanatory gap left by the classical economists. Seminal contributions by Wicksteed, Wicksell, J. B. Clark, Walras, Barone, and others generated a logically rigorous explanation of the sharing of value in a competitively organized economy, at least as stylized, and served to put a quietus on Marxian claims to the effect that labor is exploited in the shortfall between product and payment. This major analytical achievement, with its profound implications for the organization of societies, was, however, attained only at considerable cost. Buying into the neoclassical theory of distribution seemed to require the abandonment of the central principle of Adam Smith?s Wealth of Nations (1776) which stressed the importance of the division of labor and its relationship to market size as a primary determinant of economic well-being. The neoclassical emplacement of a static framework for analysis?defined by fixity in the size of the resource base and in technology?left no room for direct linkage between policy action on the size of the economic nexus and the rate of growth. For any given market size, competitive organization of the economy serves to maximize value by assuring that all resources are directed to their most productive uses. But there is nothing in this idealized neoclassical model to suggest why and how market size, in itself, matters.

A Smithean Perspective on Increasing Returns

Despite its recent re-emergence to analytical importance, the phenomenon of increasing returns remains outside the central core of neoclassical economics. The history of this idea (or set of ideas) might have been quite different if Adam Smiths explanation of the origins of trade had not been replaced by that of David Ricardo. To Adam Smith, mutually beneficial exchange emerges because of specialization, which, in its turn, implies the presence of increasing returns to the size of the exchange nexus. Even in a world of equals, trade offers mutuality of gain. There is no need for participants in the economic nexus to differ one from another. In the Ricardian logic, by contrast, trade presumably emerges because productive resources differ in their capacities to create economic value, at least among separate “goods.†Specialization is a “natural†feature of resource endowments—a feature that is exploited by trade. Comparative advantage ensures the mutuality of gain. But, in this explanation, there is no direct linkage between the size of the exchange network and the degree of specialization that is viable. There is no need to introduce increasing returns. Comparative advantage may be present even if there are constant returns to scale, both for the economy and for its separate productive sectors.

Public Choice and the Extent of the Market

In analyzing political processes, public choice scholars invoke a two-level choice, choices within rules and constitutional choices among sets of rules. This paper considers rules that set the limits for market choice through the political-collective action. Three familiar categories of institutional constraints are examined: prohibition, regulation, and taxation-public spending, that are significant in limiting the trading process. The motivation for institutional-constitutional construction may originate from sources other than economic objectives. We note that institutional parameters include political and legal constraints, as supplemented by traditions and conventions which may affect choice behavior. We relate the analysis to Adam Smiths vision of the achievement of natural liberty and economic progress through his theorem that economic productivity depends on market size.

Essays on Political Economy

This dissertation consists of three essays on political economy. The first essay studies the effect of competition on media bias in the context of U.S. newspapers in the period 1870-1910. We measure bias as the intensity with which different newspapers cover scandals. We collected data on 121 scandals and 157 newspapers. We also collected data on the partisanship, frequency of publication, and circulation of the newspapers in our sample, as well as of the newspapers circulating in the same cities as those in our sample. Results indicate that partisan newspapers cover scandals involving the opposition party’s politicians more intensely and cover scandals involving their own party’s politicians more lightly. We find evidence that competition decreases the degree of media bias. The point estimates suggest that compared to a newspaper in a monopoly position, a newspaper facing two competitors will on average exhibits less than 50% as much overall bias in coverage intensity. The second essay shows how voters make choices even in single-party authoritarian elections where the number of candidates equals the number of parliamentary seats. Cuban citizens signal approval of, candidates within the framework of the regime. Voters support candidates who have grassroots links and experience of local multi-candidate electoral contestation. Voters choose based not on clientelist incentives but on the limited political information available to them, namely, posted biographies and direct knowledge of local candidates, friends and neighbors, who run in their communities. Voters have chosen, however, without rejecting the Cuban Communist Party.

Universalism through Common Access: An Alternative Model of Distributive Majoritarian Politics

The rational-choice logic of majority rule embodies discriminatory distribution of burdens and benefits as between members of majority and minority coalitions. Empirical observation, however, suggests universality or near-universality, even in programs that are potentially discriminatory. Attempts have been made to explain the anomaly, but the basic issues have not been resolved. Weingast and others have argued that working legislatures will implicitly adopt quasi-unanimity rules or conventions. We present an alternative model of distributive majoritarian politics. The distinctive feature is “common access.” If democratic politics is modeled, not in terms of a monolithic decision structure, but instead as a setting where differing and separate decision authorities are granted access to the general taxable capacity, collective action can be analyzed in the logic of common resource usage. Our model allows for universality, even with pork-barrel spending, without resort to institutionalized rules or informal conventions.

Subjective Evaluation of Alternatives in Individual Voting Choice

Beyond Conventional Economics presents new original work from leading scholars on the interface between the individual and political and social institutions. The book offers a critique of the inadequacies of the conventional economic approach to politics and a state-of-the-art view of new paradigms challenging the dominant economic notion of the individual. A number of chapters also explore the limits of individually rational behaviour in political decision making – some by challenging the orthodox content of the idea of rationality, others by providing fresh views on the operation of political processes.

A Correction in Elementary Public Choice Geometry

This paper corrects a long-standing errorin elementary geometrical constructionsthat involve collective choices inmultidimensional settings. The seeminglyinnocuous assumption of separability amongarguments in individual utility functionsdoes not imply symmetric indifferencecontours in shared goods space. Sharedgoods necessarily become gross substituteswhen resource or budgetary constraints areintroduced. The corrected constructionsuggests that issue-by-issue voting is lessefficacious than is indicated in theconventional analysis.

STABILITY OF AN INFINITE SYSTEM OF DIFFERENTIAL EQUATIONS FOR THE KINETICS OF POLYMER DEGRADATION

Publisher Summary This chapter explores the stability of an infinite system of differential equations for the kinetics of polymer degradation. It discusses a few qualitative properties of the solutions of dynamical systems, described by infinite systems of differential equations. The chapter presents explicit results for a special class of such systems introduced and studied by Bellman and Oguztorelli. These systems describe the process of dissociation of the polymer molecules into smaller units. This process, like polymerization, are customarily described by finite systems of ordinary differential equations. The chapter describes the limit-case of an infinite system of such equations. The chapter presents the differential equations that describe the Oguztorellis system.

VARIATIONS ON TULLOCK'S ROAD MODEL

Four decades past, Gordon Tullock published a short paper, “Problems of Majority Voting” (1959), that proved to be seminal in the subsequent development of public choice theory. The central argument of the paper was incorporated as an element in The Calculus of Consent (Buchanan and Tullock, 1962), and, separately, the discussion of logrolling stimulated a large body of literature.1