Saturday, October 5, 2013

TACIT COLLUSION


Many life events have led me to think a lot about collusion lately. Collusion is when two people or organizations come to a secret understanding or conspire. It is often seen as negative. We all collude on a normal basis without realizing. 

TACIT COLLUSION

Tacit Collusion is when two people or organizations come to an understanding without explicitly saying so. The difference between tacit and normal collusion is whether the two people are actually communicating. Think of a sidewalk. Why do people only walk on the right side? No one ever said that all pedestrians must walk on the right side of the sidewalk. We have a mutual understanding with the rest of humanity that if we all walk on the right, we will never have to worry about walking into each other.

The Declaration of Independence states: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."  We all retain a mutual agreement that liberty is a right. This right is "self-evident". No one needs to say that everyone deserves life, liberty and happiness. (However, I notice the irony in the fact that our founding fathers had to explicitly state that everyone is entitled to these rights.)

Let’s get spiritual.

There exist higher and lower laws. Evidence of such laws can be found using the Christ’s teachings and the Law of Moses. Under the Law of Moses were many commandments, even the Ten Commandments. When a lawyer posed the question Master, which is the great commandment in the law?”, Jesus Responded with the following:

“Thou shalt love the Lord thy God with all thy heart, and with all thy soul, and with all thy mind. This is the first and great commandment. And the second is like unto it, Thou shalt love thy neighbour as thyself. On these two commandments hang all the law and the prophets.”

How can two commandments possibly trump all others? If we understand the importance of commandments and their purpose, silent commandments do not need to be declared to be lived. Tacit collusion. In a perfect society, each would abide by unspoken rules knowing that society is better off as everyone lives them. Murder, rape, and theft need not be spoken because it is self-evident that these are evil.

You can tell how untamed a society has become by the number of laws required to discipline it. We are more free with lesser laws while choosing to abide by principles of righteousness.

It takes one stupid action to change the rules for everyone else. For those interested in economics, we call this a grim trigger strategy. Sometimes we laugh at all the wacky laws adopted by certain states (example: It is illegal to sell your children in Florida), but have you ever thought, “Who was the guy who actually did it, forcing the government to create a law?” One idiot ruins it for the rest of us.

I have one last point.

We cannot force everyone else to tacitly collude with us. And communicating such collusion is essentially what law is. So if we can’t force others to obey with us, and you can’t reach tacit collusion by open communication, what can we do?

We live to be the best people we can be. We strive to look for ways that we can help other people and make society better. Many times this will require us to check our selfish interests at the door, but it is worth it. And maybe if we live in a noble manner, others will notice and tacitly collude with us. 

Thursday, March 21, 2013

Signaling

I am a lover of game theory. Game theory studies strategy and interaction between two firms or people. In game theory, signaling is communication before choices are made. Signaling helps to indicate what kind of actions you will take so others can act accordingly.

Signals are preceded with questions, often unspoken: Why should I trust you? What makes you better than everyone else? What's in it for me? The truth is, they have reason not to trust or believe you are better or believe you are acting in their benefit.

The signal is meant to be a indication of your good intentions. Successful signals say "I care about your needs more than mine." For this reason, signaling costs to succeed.

What do we signal to others?

Are we true to that signal?

Stop now and think about your thoughts, words, and actions. What signals are given off through each of those? What non-verbal signals? What do people think you represent? Are these signals you want others receiving?

We must be true to our signals. Honesty is key. Dishonesty hurts those around us and ourselves. False signals show us to be something we are not. One day it will catch up with you.

"When we are honest in every way, we are able to enjoy peace of mind and maintain self-respect. We build strength of character, which allows us to be of service to God and others. We are trustworthy in the eyes of God and those around us." (True to the Faith)




Wednesday, February 27, 2013

Diminishing Marginal Utility



Diminishing Marginal Utility is a law meaning decreasing gains. More easily understood, imagine eating a hot dog. Imagine eating one more. Imagine eating 5 more. The more you eat, the less pleasure you gain from your hot dog eating.

This phenomenon can accurately portray why we are so excited to do something for the first time, but after repeating the same activity multiple times, we are bored.

Economists have long looked for some activity that breaks this pattern of behavior, but there just simply is no exception. And some of you might be thinking, "What about church? Shouldn't we be able to go to church a million times and still be just as willing to go one million and one times?"

The answer is complex. And the truth is, I don't have the answer. Yes, we should be willing to participate in good things an infinite number of times; however, this is seldom the reality. 

I believe the answer is to differentiate. Each day is new and different. What is exciting about today? Focus on that! 

I WANT TO HEAR FROM YOU! What is the secret to conquering diminishing marginal utility?