Economic Analyses in Philosophy and Politics - PPEL 310

Tuesday, 3:30PM – 6:00PM

Education, Room 320
Fall 2018

Professor Mario Villarreal-Diaz

Office: Social Sciences 227
email: mariovillarreal@email.arizona.edu
Office hours: Monday 3:00pm-4:00pm and Thursday 10:30am-11:30am or by appointment.

I. OVERVIEW OF THE COURSE

This course introduces you to the basic tools from economics that are used in the analysis of social and
political phenomena. Basically, we explore how economist think about issues of collective action, justice,
and fairness. In this sense, the course is neither a class in economics nor in the philosophy of economics,
but teaches some basic tools from economics that have been applied to the problems of social and
political theory.

The course is divided into eight parts:

(1) Rationality and Utility. We will study the relations between instrumental rationality, Homo
Economicus and formal utility theory, including different conceptions of the notion of a preference and
utility functions. These ideas are the foundations of the course.

(2) Efficiency. What is economic efficiency and how does it relate to rationality? How is the concept
useful in thinking about individuals acting in groups?

(3) Game Theory. What can we learn from formalizing the analysis of individual strategic interactions?
We consider strategic rationality in games such as the prisoner's dilemma. We will examine games in
both their strategic and extensive forms, as well as the implications regarding issues such as
cooperation, trust and cheating.

(4) Social Choice Theory. How do we make choices in groups? Democracy can be understood as a way a
society makes a collective choice. We examine in this part both the formal aspects of social choice and
their applications to democracy.

(5) New Institutional Economics. How do formal and informal rules affect individual and collective
behavior? We explore how institutions evolve and the effects on agreements and contracts, economic
performance, and externalities.

(6) Behavioral economics. Individuals have cognitive limitations and biases. Neo-classical economics
often overlooks these flaws. Is there a way to help individuals overcome these limitations and avoid
making costly choices?
(7) Bloomington School. How does a group solve a social dilemma? How do people manage to govern
common pool resources? We study how rules may emerge without a central authority in charge, and
how fostering cooperation and coordination in collective action problems may emerge.

(8) Public Choice Theory. We will examine the applications of Homo Economicus to politics and collective
action problems. We explore issues regarding the political market, its actors and exchanges, and the
consequences of applying the basic principles of economics to political interactions.

The outline is ambitious but doable. If for any reason I need to make any adjustments, they will be in the
form of spending less time on a given topic and not by not covering it at all. The course’s content is
challenging. The instructor will make his best to offer guidance and support but, like with many other
things in life, your performance will be a matter of how much effort you are willing to exert during the
course.

Free Inquiry Statement.

You are at a University. It is the place for open conversation and the exploration of intellectual ideas and
disagreements. The classroom is a forum for critical discussion in the pursuit of truth. Some topics and
examples may make you feel uncomfortable. Sometimes you will feel that your beliefs are being
challenged or that at odds with other’s opinions or even the course´s assigned materials. That is ok.
Acknowledging your emotions is fine, as long you allow your reason and intellect to conduct the
intellectual engagement required in our course.

Students have the right to engage in reasoned, polite disagreement with the instructors with no penalty
to their grades whatsoever. Everyone has the right to participate in a learning environment that
emphasizes mutual respect, tolerance, and free inquiry. Everyone, including those students with
opinions in the intellectual minority here on campus, has the right to express his or her philosophical
views without fear of bullying or reprisal. The instructors have the right to challenge any beliefs, world-
views, ideology, or attitudes held by the students, even world-views that the students hold sacred.
Students likewise have this right against the instructors and each other. Only three rules matter in this
process: 1) Be polite and respectful, 2) Engage with the ideas, not the person expressing them, and 3)
Use sound reasoning and analysis in defending your view.

Required Texts:
Gerald Gaus, On Philosophy, Politics and Economics (“PPE”).
Anomaly et.al, Philosophy, Politics, and Economics -An Anthology (“Anthology”)
Additional reading (marked “web”) will be posted on the class D2L website.

II. CLASSES AND REQUIRED READING

August 21: Intro and course overview – Collective Action & Economics

August 28: Rationality, Utility and Choice

Required Reading: PPE, chap 1 and 2
Anthology, chap 2, pages 44-55

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September 4: Efficiency
Required Reading: PPE, chap 3
Anthology, chap 5, pages 172-177
Suggested Readings: Coleman – “Efficiency, Utility, and Wealth Maximization” (web)

September 11: Game Theory 1

Required Readings: Gibbons - “Introduction to Applicable Game Theory” (web)
Anthology, chap 3 pages 73-88
Suggested Readings: Dixit – “Ten Tales of Strategy” (web)

September 18: Game Theory 2

Required Readings: PPE, chap 4
“Game Theory and Ethics”, Stanford Encyclopedia of Philosophy:
http://seop.illc.uva.nl/entries/game-ethics/

September 25: Social Choice Theory 1

Required Reading: PPE, chap 5
“Social Choice Theory”, Stanford Encyclopedia of Philosophy:
http://plato.stanford.edu/entries/social-choice/
Suggested Readings: “Arrow´s Theorem”, Stanford Encyclopedia of Philosophy:
http://plato.stanford.edu/entries/arrows-theorem/

October 2: Midterm 1 (Exam will cover all the reviewed material up to the Game Theory 2 session)

October 9: Social Choice Theory 2

Required Reading: Sen – “The Possibility of Social Choice”, Nobel Prize Lecture (web)
Suggested Readings: Arrow – “Social Choice and Individual Value” (web)

October 16: New Institutional Economics

Required Reading: Douglass C. North, “Institutions” (web)
https://www.jstor.org/stable/pdf/1942704.pdf?refreqid=excelsior%3A5e4f
aada9d1f1c610189dcdfd6efce09
Coase – “The New Institutional Economics” (web)
Coase - “The Problem of Social Cost” (web)
Suggested Readings: North – Nobel Prize Lecture

October 23: Behavioral Economics

Required Reading: Anthology, chap 12, pages 537-550
Suggested Readings: McCloskey “The Applied Theory of Bossing People Around” (web)

October 30: Bloomington School 1

Required Reading: Hardin – “Governing the Commons” (web)
Ostrom – “Coping with Tragedies of the Commons” (web)
Suggested Readings: Ostrom - Governing the Commons, chap 1 & 2 (web)

November 6: Bloomington School 2

Required Reading: Anthology, chap 6, pages 255-271
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 November 13: Midterm 2

November 20: No class. Happy Thanksgiving break!

November 27: Public Choice 1

Required Reading: PPE, chap 6
Anthology, chap 10 pages 431-435
Suggested Readings: Mueller – “Public Choice, A Survey” (web)

December 4: Public Choice 2 & Course Final Reflections

Required Reading: Anthology, chap 10 pages 449-451
Aidt –“Rent Seeking and Corruption” (web)
Suggested Readings: Brennan and Buchanan – The Reason for Rules, Chapter 1 “The
Constitutional Imperative” (web)

December 10: Final Examination (Same classroom and time)

III. ASSESSMENT

1. Quizzes (30%) There is plenty of required reading in this class. Reading in advance is fundamental both
for your ability to follow the narrative of the course and to ultimately perform at your best. If that is not
enough reason for you to read the assigned materials before we review them in class, there will be six
10-minute surprise quizzes. Surprise quizzes will cover all the required readings up to the day of the quiz.
Each quiz will have four multiple choice questions and one short answer question. For your final grade,
the lowest grade quiz will be dropped, thus each quiz is worth 6% of your final grade. There will be no
make-up quizzes.

2. Test 1 (20%): On October 2, there will be a test in class. The test will have two sections. On September
25, I will post five questions drawn from the readings and lectures. The first section of the test will
present three of these questions. You will choose TWO of them to answer in the exam. These are short
essay questions with a limit of one page per answer. In thinking about the questions, you may use any
books you wish, and may discuss the questions with others. In the second section of the exam, there
will be five additional multiple choice questions.

3. Test 2 (20%): Same instructions as Test 1, except the test will be given on November 13 and the
possible test questions will be posted on November 6.

4. Final exam (30%): There will be a cumulative exam on Monday December 10 from 3:30 pm - 5:30 pm
in our usual room. On November 27 five questions will be posted. TWO of these questions will appear
on the final, and you will have to answer BOTH. Additionally, there will be ten additional multiple choice
questions.

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Policy on Grading. A total score for the semester of 90% or above warrants a grade of A; 80% - 89%
warrants a B; 70% - 79% warrants a C; 60% - 69% warrants a D; and below 60% warrants an E.

Grading note: If a person’s grades steadily improve during the semester AND perfect attendance
is observed, I reserve the right to raise the final grade above the calculated grade. You cannot get
lower than the calculated grade. End of the semester pleas for final grade reconsideration based
on anything other than academic merit and/or perfect attendance will be dismissed.

Tests will be graded on:

• Whether you have answered all parts of the question;
• Whether your answers show mastery of the relevant parts of the class sessions and required
readings;
• Whether your essays are clearly written, concise, and free from contradictions.

A short essay that meets these criteria is an “A” essay. An essay that generally meets them, but fails on
one or more (e.g., does not show significant mastery of the readings, fails to fully answer a part of the
question), will be marked in the “B” range. An answer that meets some of the criteria, showing some
evidence of mastery of some of the readings and lectures, but indicates a superficial understanding of
much of the material, fails to adequately answer more than one part of the question, or is sometimes
difficult to understand will be marked as a “C” essay. Essays that generally fail to meet the criteria, which
show significant and repeated errors in trying to answer the question, which are generally hard to
follow, and which provide scant evidence of understanding the core material covered by the question
will be marked in the “D” range. Essays that generally fail to meet the criteria, and show little or no
sound evidence of mastery of the material will be marked as “E”.

Honors: if you are registered in the Honors section, you also must write an essay. You must see me
about this by SEPTEMBER 4.

Attendance: In my experience, attending the class is closely correlated with performance. Also, you do
not want to miss one of the surprise quizzes. So, I recommend you take attendance to this class as one
of your high priorities. Students who miss class due to illness or emergency are required to bring
documentation from their healthcare provider or other relevant, professional third party. Failure to
submit third-party documentation will result in unexcused absences.

IV. ADDITIONAL POLICIES

• I start class at 3:35 so that everyone can get to the room and be settled by then. It is very
distracting when people arrive late or leave early. Please don’t. If you are not in the room when I
call roll, then you miss the attendance mark for that day. I may call roll again after the break in
the middle of the class. If you leave early, you also lose the attendance for that day.

• To foster a positive learning environment, students and instructors have a shared responsibility.
We want a safe, welcoming and inclusive environment where all of us feel comfortable with each
other and where we can challenge ourselves to succeed. To that end, our focus is on the tasks at
hand and not on extraneous activities (i.e. texting, chatting, reading a newspaper, making phone
calls, web surfing, etc.).

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 • Students are asked to refrain from disruptive conversations with people sitting around them
during lecture. Students observed engaging in disruptive activity will be asked to cease this
behavior. Those who continue to disrupt the class will be asked to leave lecture or discussion
and may be reported to the Dean of Students.

• If you quote from any work, or paraphrase it, you must note explicitly that you have done so—in
the case of direct quotation, the use of quotation marks will suffice. Failure to acknowledge
sources, or to note quotations or paraphrases, constitutes plagiarism— intentionally or
knowingly representing the words or ideas of another as one’s own in any academic exercise,
which is the ultimate academic crime — see the Code of Conduct in the ABOR Policy Manual,
beginning at 5-301.C. Any cheating, fabrication, or plagiarism will result in a failing grade for the
work concerned. I may recommend additional penalties ranging from making the infraction a
permanent part of your academic record to expulsion from the University, in accordance with
the UA Code of Academic Integrity.

V. OFFICIAL MANDATED STUFF

Absence and Class Participation Policy

The UA’s policy concerning Class Attendance, Participation, and Administrative Drops is available
at: http://catalog.arizona.edu/2015-16/policies/classatten.htm

Any sincerely held religious belief, observance or practice will be accommodated where
reasonable. The UA policy regarding such absences is available at:
http://policy.arizona.edu/human-resources/religious-accommodation-policy.

Absences pre-approved by the UA Dean of Students (or Dean Designee) will be honored. See:
http://uhap.web.arizona.edu/policy/appointed-personnel/7.04.02

Requests for incompletes (I) and withdrawal (W) must be made in accordance with University policies
which are available at http://catalog.arizona.edu/2015-16/policies/grade.htm#I and
http://catalog.arizona.edu/2015-16/policies/grade.htm#W respectively.

Threatening Behavior Policy

The UA Threatening Behavior by Students Policy prohibits threats of physical harm to any
member of the University community, including to one’s self. See:
http://policy.arizona.edu/education-and-student-affairs/threatening-behavior-students.

Accessibility and Accommodations

Our goal in this classroom is that learning experiences be as accessible as possible. If you
anticipate or experience physical or academic barriers based on disability, please let me know
immediately so that we can discuss options. You are also welcome to contact Disability
Resources (520-621-3268) to establish reasonable accommodations. For additional information
on Disability Resources and reasonable accommodations, please visit http://drc.arizona.edu/.

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 If you have reasonable accommodations, please plan to meet with me by appointment or during
office hours to discuss accommodations and how my course requirements and activities may
impact your ability to fully participate.

Please be aware that the accessible table and chairs in this room should remain available for
students who find that standard classroom seating is not usable.

Code of Academic Integrity

Students are encouraged to share intellectual views and discuss freely the principles and
applications of course materials. However, graded work/exercises must be the product of
independent effort unless otherwise instructed. Students are expected to adhere to the UA Code
of Academic Integrity as described in the UA General Catalog. See:
http://deanofstudents.arizona.edu/codeofacademicintegrity
http://deanofstudents.arizona.edu/academic-integrity/students/academic-integrity.

The University Libraries have some excellent tips for avoiding plagiarism available at:
http://www.library.arizona.edu/help/tutorials/plagiarism/index.html.

Selling class notes and/or other course materials to other students or to a third party for resale is
not permitted without the instructor’s express written consent. Violations to this and other
course rules are subject to the Code of Academic Integrity and may result in course
sanctions. Additionally, students who use D2L or UA email to sell or buy these copyrighted
materials are subject to Code of Conduct Violations for misuse of student email addresses. This
conduct may also constitute copyright infringement.

UA Nondiscrimination and Anti-harassment Policy

The University is committed to creating and maintaining an environment free of discrimination,
http://policy.arizona.edu/human-resources/nondiscrimination-and-anti-harassment-policy

Our classroom is a place where everyone is encouraged to express well-formed opinions and
their reasons for those opinions. We also want to create a tolerant and open environment where
such opinions can be expressed without resorting to bullying or discrimination of others.

Additional Resources for Students

UA Academic policies and procedures are available at:
http://catalog.arizona.edu/2015-16/policies/aaindex.html
Student Assistance and Advocacy information is available at:
http://deanofstudents.arizona.edu/student-assistance/students/student-assistance

Confidentiality of Student Records

http://www.registrar.arizona.edu/ferpa/default.htm

Subject to Change Statement

Information contained in the course syllabus, other than the grade and absence policy, may be
subject to change with advance notice, as deemed appropriate by the instructor.