PPEL

310
Economic Analyses in Philosophy and Politics
Tuesday, 3:30PM – 6:00PM
Harvill Building, Room 428
Fall 2017


Professor Mario Villarreal-Diaz
Office: Social Sciences 227
email: mariovillarreal@email.arizona.edu
Office hours: Monday 11:00am-1:00pm 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. It is neither a course 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 seven parts:

(1) Rationality and Utility. We shall consider 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. 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) 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 not always require a top-down approach.

(7) 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. I don’t intend to make this a hard course but
the course will be challenging regardless what I do. 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.

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 website:
Website: http://mariovd.sagentlabs.org
Purchase code: MTX-0010101

II. CLASSES AND REQUIRED READING
August 22: Intro – Collective Action & Economics

August 29: Rationality, Utility and Choice
Required Reading: PPE, chap 1 and 2
Anthology, chap 2, pages 44-55
Suggested Readings: Schmidtz– “Why Be Rational” (web)
Smith – “Constructivist and Ecological Rationality in Economics” (web)

September 5: Efficiency
Required Reading: PPE, chap 3
Anthology, chap 5 pages 172-177
Suggested Readings: Coleman – “Efficiency, Utility, and Wealth Maximization” (web)
Stringham – “Kaldor-Hicks Efficiency and The Problem Of Central Planning”(web)

September 12: Game Theory 1
Required Readings: Gibbons - “Introduction to Applicable Game Theory” (web)
Suggested Readings: Dixit – “Ten Tales of Strategy” (web)

September 19: Game Theory 2
Required Readings: PPE, chap 4
Anthology, chap 3 pages 73-88

September 26: Game Theory 3
Required Readings: “Game Theory and Ethics”, Stanford Encyclopedia of Philosophy:
http://seop.illc.uva.nl/entries/game-ethics/

October 3: 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 10: Midterm 1 (Exam will cover all the reviewed material up to the Game Theory 3 session)



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October 17: 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)
Foster – “Freedom, Opportunity, and Well-Being” (web)

October 24: New Institutional Economics
Required Reading: North – “Institutions, Institutional Change and Economic Performance”, Chapters
1,2 & 3. (web)
Coase – “The New Institutional Economics” (web)
Coase - “The Problem of Social Cost” (web)
Suggested Readings: North – Nobel Prize Lecture
Anthology, chap 13 pages 638-641

October 31: 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 7: Bloomington School 2
Required Reading: Ostrom – “Beyond Markets and States”, Nobel Prize Lecture (web)
Suggested Readings: Aligica – “Polycentricity: From Polanyi to Ostrom, and Beyond” (web)

November 14: Midterm 2

November 21: Thanksgiving break

November 28: Public Choice 1
Required Reading: PPE, chap 6
Anthology, chap 10 pages 431-435
Suggested Readings: Mueller – “Public Choice, A Survey” (web)

December 5: 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 11: 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.

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2. Test 1 (20%): On October 10, there will be a test in class. The test will have two sections. On October 3, 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 14 and the possible test
questions will be posted on November 7.

4. Final exam (30%): There will be a cumulative exam on Monday December 11 from 3:30 pm - 5:30 pm in our
usual room. On November 28 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.

5. Extra points assignment – Weekly discussion questions (5%): A week before each session I will post a question
on the course webpage and I will create five groups of students. During that week, and no after Monday’s
midnight before we meet in the classroom, each group will then engage in a conversation about the question,
based on the assigned readings and own opinions. I expect everybody to participate in a respectful and civil way.
This includes respecting other’s opinions and contributions as well as voicing your own in a mature way. To get full
credit for this extra activity ALL members must engage in the conversation. I don’t expect a lengthy set of posts,
but enough to signal the group had a meaningful engagement exploring the issue described in the question.

Grading: All marks will be on the scale: A, B, C, C, D, & E. Your final grade for the course will average your marks
based on the weightings given above.

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 on assessments (1)-(4). End of the semester pleas for final grade reconsideration based on other that
academic merit 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 5.

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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.).

• 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.

• You are at a University. It is the place for open conversation and the exploration of intellectual ideas.
Sometimes, some of the course 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. A landmark of maturity is the ability to consider two opposite ideas in your
mind without fainting. Acknowledging your emotions is fine, if you allow your reason and intellect to
conduct the intellectual engagement required in our course.

• 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

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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/.

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

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 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.