Thursday, January 31, 2008

Why voters should be familiar with game theory

[By the way, Michael D. Griffin is NASA's chief administrator. COTS stands for "commercial, off-the-shelf." Think of cheap Costco night-vision goggles vs. developing special military hardware that's twice as good and ten times as expensive.]

Griffin: "To this end, as I have noted many times, we must be willing to defer the use of government systems in favor of commercial services, as and when they reach maturity. When commercial capability comes on line, we will reduce the level of our own LEO operations with Ares/Orion to that which is minimally necessary to preserve capability, and to qualify the system for lunar flight."

Goff: "While I agree that the government not only is the government being "willing to defer in favor of commercial services" is a really good idea, I think that this approach (of hedging their bets by coming up with a competing in-house launcher) is fraught with risk.... The danger of having NASA in-house launch vehicles and space access capabilities that can serve as a backup to COTS also allows them to directly compete with COTS if the budgetary situation goes sour.... The frustrating thing is that by setting things up the way NASA is doing, the NASA people don't even have to be malicious for such a result to happen--it's a natural and likely consequence of the perverse incentives that NASA and Congress are setting up."

Emphasis mine. This is the same point I was trying to make with the last post on CDS. The federal government is rarely able to accomplish anything directly--as Peggy Noonan points out, what it can do is write a check and, I would add, set the conditions under which someone is able to claim that check. The government can't act, but it can set the rules for the framework within which other agents act. It's hard to predict how individuals can act, but if you do a good job of providing the right incentives you can make certain outcomes less likely and others more likely. You can't control the price an object will fetch in an auction, but you can design an auction that makes it rational and logical to offer a fair bid up front (Vickrey auctions). There's no guarantee that people will actually act rationally, but if you set it up so that rational actions lead to outcomes you don't want you're just asking for a world of hurt. System design matters.

In a democracy, of course, the government is the people. (Not in day-to-day administration, of course, but in a "the buck stops here" sense of ultimate responsibility.) Voters should have at least a passing familiarity with the Prisoner's Dilemma, Stag Hunt, and the concept that people generally act in their own best interests. Then when we talk about economic bailouts and immigration they'll at least have the tools to imagine the likely effect of proposed solutions.


"The presentation or 'gift' of the Holy Ghost simply confers upon a man the right to receive at any time, when he is worthy of it and desires it, the power and light of truth of the Holy Ghost, although he may often be left to his own spirit and judgment." --Joseph F. Smith (manual, p. 69)

Be pretty if you are,
Be witty if you can,
But be cheerful if it kills you.

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