Journal topic #17: Tragedy of the Commons Experiment

The fishing game was indeed very fun~ In our group, we were more like communists, who were trying to build up an equal society by sharing same amount of resources; therefore, each one of us takes only one chocolate from each round in order to maximize amount of fish at the end of each round. At the end, each though we first reached consensus that we were going to share equal amount of chocolate together , people were just trying to get as many chocolate as possible at the last round, because they knew that was only time they could maximize their profit respectively. Sacrificing was necessary in this fishing game, as I mentioned earlier; as a result of we will eventually get abundant chocolate if each one of us only got one on each round. Regardless of fishing skill, we were looking forwards that we might eventually maximize benefits not only for ourselves but also for others, which was similar to the concept we were discussing about on Journal #16. Nowadays, looking at the scenario happened in our group, we can see even though we have understanding on the concept of we should not only make the best for ourselves but also for others in order to maximize our profits, some people still think irrationally in order to earn profit immediately... An example of local common will be student library, where offers comfortable tables and chairs for those students who are preparing for exams; however, the number of chairs and tables are limited; therefore, students need to set their studying time in order to let other students have opportunity to use those materials, too. Examples of renewable natural resource can be sunlight, and air. And example of global common will be outer space, because there's no territory being claimed in this area, and any countries, who are capable, can explore to outer space. In conclusion, like we talked about in Journal#16, in order to maximize the profit, we, as individual, have to make the best for not only ourselves but also other people~

Journal Entry #16: Topic: Game Theory and Chicken

In my opinion, Game Theory, which assumes people make rational decisions, might not always be valid; as a result of if every people in the group makes rational decisions, those decision might interfere with others, and the circumstance will end up with inefficiency. Conversely, people should make decisions that are best for not only themselves but also the group. The bad outcome is not necessarily always inevitable. In order to avoid bad aftermath, people, as a group, should always determine what is the best for them and what is the best for the group. For instance, according to the video "Ignore the Blond," if everyone goes for the Blond, they will block each others' ways, and if they subsequently go for the Blond's friends, her friends will give cold shoulder, because no one likes being secondary option; however, if no one goes for the blond, but goes for what is the best for them, each one of them will get a girl. Even though no one gets the blond, each one of them is going what is the best for group.
Eventually, Nash makes Adam Smith theory better by stating that the circumstance will be better outcome if everyone in the group is doing not only the best for themselves but also the best for the group.

Journal Entry #15: Topic: What is a Monopoly?

Different economists might have various interpretations on "What is a Monopoly?"; however, those differences have three commonalities, which are one single seller in the market, an unique product, and barriers to entry keep other competitors out. Since monopoly firm has no competitors, people might ask, how do they determine product's price? By looking at the graph of monopoly firm, we can see there are marginal cost, marginal revenue and demand curve. This is crucial for monopoly firm; as a result of a monopoly firm has to discover a point, where marginal revenue equals to marginal cost in order to maximize its profit. A monopoly firm has the benefit of controlling the entire market price of certain product, and a firm can also use advertisement to demonstrate the product's uniqueness in order to attract more consumers. Costs of Monopoly happen when a monopolist produces less output and sells it at a higher price than a perfectly competitive firm. According to the video, economists dislike monopoly ; as a result of its inefficiency. Personally, I think CollegeBoard is a good monopoly firm, because the creation of this monopoly balances the fairness of standardized test. Everyone has equal opportunity to demonstrate their academic performances. I think it's worthy to attain Monopoly because we can minimize those influential factors, which could cause by other competitive firms, while maximizing our profits in the market.