We all know that growing up in the 1980’s would have been a whole lot different than growing up in today’s society with the big hair, acid jeans, and well lets face it the AMAZING dancing, but one thing that seems to never change know matter what time period were living in is the way men think they can win over women with their big muscles and “ballsie” acts of behavior. (Sorry guys it’s just the way it is) After talking about Game theory and Strategic behavior in class, I could not help but think about the, oh so wonderful, mid 1980’s movie Footloose. This film perfectly demonstrates the stereotypical act of the “meat head” boyfriend and “outcast” city boy trying to win over the heart of the popular pretty girl by competing in the ridiculously stupid game of “chicken.” But what makes this form of chicken so much better, is that they’re play with some hard core tractors my friends. For all of you who haven’t seen the classic chick flick Footloose here’s a little clip to show you what you’ve been missing out on.
http://www.youtube.com/watch?v=gZoJleb-Gr0
Now that your life as been that much more complete with the music of Bonnie Tyler and visions of Kevin Bacon, lets talk economics. As discussed in class, this game of chicken is a great example of a Nash Equilibrium. Here we have Ren (Kevin Bacon/Outcast) and Chuck (tough guy/boyfriend) who have two options; either stay on the tractor, chance their life, and possibly win the girl/big ego OR swerve off the path, KEEP you’re life and end up in a ditch with the girl no longer in the picture. But as we all know it’s not that simple. The complexity and uncertainty of what the other idiot is going to do, leads us to four different outcomes. Besides the obvious of not playing at all, you would think both “men” would swerve off the path resulting in both living and both appearing to have some sort of sense in them; giving us a (0,0) outcome. The complete opposite outcome would be to both stay on their tractors and both end up either injured or hurting their pride; giving us an outcome of (-100,-100). The two other outcomes of one staying and the other swerving (and vice versa) is our Nash Equilibrium. In this example of Footloose, we have Chuck, who was originally meaning to stay on his tractor and hope for Ren to swerve away, result in an outcome of Ren getting his shoe string stuck, therefore staying on the path forcing Chuck to end up in the ditch. Regardless of who ends up winning, the outcomes leave one happy/positive and the other hurt/negative; (10,-10) or (-10,10), this being our Nash Equilibrium. In this case, Ren wins the girl, gains some respect from the country boys, and doesn’t end up in a ditch; giving him the positive outcome of (10,-10). This being said, for all you guys out there who think this is the way to win a girls heart…it’s not. I’m sorry to say that this isn’t the 80’s anymore. But just for fun here’s one more clip that takes us back to when guys supposedly danced in warehouses late at night :)
http://www.youtube.com/watch?v=yX38dNneIiU
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I agree. I see the moral hazard aspect within everyday society. I am becoming more aware of it in the world financial institutions. I am in another political economics type class and we were discussing the IMF (International Monetary Fund). It seems to me that we, all the taxpayers, give money, as a country, to the IMF to help distressed countries out of financial crises in order for that country to pay their loans to the capital investors who gave it to them. The sad part is that while the capital was cushioned, this is a form of insurance, the capital won and the tax payer did not receive any benefit, other than the capitalist being able to distribute their money via spending. It seems like a racket. Moral Hazard also takes the form of loose lending since the capital knows it is cushioned. Double moral hazard?
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