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Lecture 7 - Not because people irrational or clueless •...

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American Politics Spring 2006 Lecture 8 Deals and Dealmaking
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Making the Deal Stick Deals involving small groups. Mutually beneficial exchange Problem: costly, therefore incentive to renege. Common in Congress Explicit bargain: vote trades. Implicit bargain: scheduling, minority rights. Different from cooperation in large groups. Ability to monitor behavior. Marginal impact of cooperation large. Repeated interactions.
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The Prisoners’ Dilemma Suspect 2’s Choice Remain Silent Implicate (Cooperate) (Defect) Suspect 1’s Choice Remain Silent (Cooperate 1: Short Sentence 2: Short Sentence 1: Long Sentence 2: No Jail Time Implicate (Defect) 1: No Jail Time 2: Long Sentence 1: Mod. Sentence 2: Mod. Sentence
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What’s the “Dilemma?” Deals are easy to make, hard to carry out. “There should be a law against such games!” Why is cooperation so hard. Binding promises impossible. No third-party guarantees.
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Unformatted text preview: Not because people irrational or clueless. • But we see cooperation in Congress and elsewhere. Why? Why Cooperation Happens: “The Shadow of the Future” • Repeat play: current interaction one of many. • Trigger strategies: reciprocate cooperation, punish defection. – “To get along, go along.” • Reputations: never deal with someone who has reneged on a deal with someone else. – “You don’t have to make deals, but you have to carry out the deals you make.” Implications • Cooperation born of interest, not goodwill. – Legislators do favors because they expect them in return. – Punishments exist, but rarely used – not needed. • Explains why the minority party gets some of what it wants. • Explains why “outsiders” have tough time in political life. • Suggests need to distinguish conflictual rhetoric from underlying cooperation....
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