Econ 241

Answers to Homework 21
1. Ch. 16, #S1
A
Philosophy
Geology
Sociology

B
Sociology
Philosophy
Geology

C
Geology
Sociology
Philosophy

Suppose A sets the agenda and wants the Philosophy course to be chose. How should she set the
agenda to achieve this outcome if she knows that everyone will vote truthfully in all rounds?
To answer this question we just examine the possible agendas and see which one gives A her
prefered outcome.
Agenda 1:
Round 1: Philosphy vs. Geology -> Philosophy wins (A and B vote for Philosophy, C for
Geology)
Round 2: Philosophy vs. Sociology -> Sociology wins
Agenda 2:
Round 1: Geology vs. Sociology -> Geology wins
Round 2: Geology vs. Philosophy -> Philosophy wins
Agenda 3:
Round 1: Sociology vs. Philosophy -> Sociology wins
Round 2: Sociology vs. Geology -> Geology wins
A prefers Philosophy, so she would pick agenda 2, in which Geology and Sociology go up in the
first round.
What agenda should she use if she knows that they will all vote strategically?
Lets re-examine the agendas and see what changes in people act strategically:
Everyone will vote honestly in the second round, so we only have to examine the first round.
Agenda 1:
B is not going to change her vote because her preferred subject wins.
C cannot change the outcome of the first round by changing her vote.
A could choose to vote for Geology in the first round. This would make Geology win the first
round, and it would also win the second round against Sociology. A would prefer this outcome.
If everyone votes strategically, the outcome is that Geology wins.
Agenda 2:
A is not going to change her vote because her preferred subject wins.
B cannot change the outcome of the first round by changing her vote.

C could choose to vote for Sociology rather than Geology in the first round. This would mean
that Sociology wins the first round and goes up against Philosophy. Sociology would win, so C
prefers this outcome and would vote strategically.
If everyone votes strategically, the outcome is that Sociology wins.
Agenda 3:
C is not going to change her vote because her preferred subject wins.
A cannot change the outcome of the first round by changing her vote.
B could choose to vote for Philosophy rather than Sociology in the first round. This would make
Philosophy win the first round, and it would also win the second round against Geology.
If everyone votes strategically, the outcome is that Philosophy wins.
If A expected people to behave strategically, she should use Agenda 3 (Sociology vs. Philosophy
in the first round.)
2. Ch. 16, #S2
Suppose that voters 1 through 4 are being asked to consider three different candidates A, B,
and C in a Borda-count election. Their preferences are:
1
A
B
C

2
A
B
C

3
B
C
A

4
C
B
A

Assume that voters will cast their votes truthfully (no strategic voting). Find a Borda-weighting
system a number of points to be allotted to the first, second and third preferences in which
candidate A wins.
Lets say the weighting system is x points for first place, y points for second, and z points for
third.
Then the points for each candidate are:
A: 2x + 2z
B: 3y + x
C: 2z + x + y
A will always beat C because the first-place choice has to get more points than the second-place
choice (x> y).
2x + 2z > 2z + x + y
x>y
A will beat B if
2x + 2z > 3y + x
x + 2z > 3y
Choose any set of points that satisfies this inequality. Heres one:
x=5

y=2
z=1
Under this rating system, A gets a score of 12, B gets 11, and C gets 9.
3. Read "The Economics of Strong Reciprocity" by Fehr and Fischbacher. What is the thesis of
this article?
The authors argue that economics will make incorrect predictions if it assumes that people
always act selfishly. Some behavior can only be explained by assuming that people act as strong
reciprocators.