One of the most common feeling of anger comes when someone cuts us off on the road. How dare they?! Don’t they know how reckless they’re being? We have a certain image of how everyone should behave on the road (even if we don’t 😅).
This got me thinking about driving conditions in Pakistan, especially in more crowded cities like Lahore.
But what it really makes me think about is the situations where traffic law isn’t obeyed, especially when you see vehicles driving in the wrong direction just to get to their destination faster!
The payoff to the driver performing the illegal activity 👿 is obviously high enough that they are willing to risk getting into an accident. Everyone else on that road now suffers because of this driver.
What if everyone started to drive like this though? We can only imagine if the traffic would ever move! Where the road basically just becomes a paved parking lot. In economic terms this is considered as tragedy of the commons, where everyone wants the benefit of being the one to drive as they wish, but no one actually benefits!
But we know that this doesn’t really happen right? Most people obey the traffic law most of the time and things mostly work just fine. Let’s take a look then at how the law is supposed to work in this game, where it’s beneficial for everyone to cooperate.
Usually, there is a fine associated with breaking the law and we think that it is the major reason people would choose to follow the law.
According to Kaushik Basu, this traditional economic implementation of the law isn’t the reason for why the law would work or wouldn’t work. He talks about how how the law is basically a signal for everyone to come to a consensus about their beliefs of what others are going to do.
What do you think they think about what you think? 🤔
Think of the situation where you, as a new yorker, have to meet your friend in New York City on a given day. But neither of you knows the time or place and you have no means to communicate. You would each try to determine what the other is thinking. This is where Focal Points (Schelling ) come in! Based off of some intuition, most new yorkers would pick Grand Central Station at noon to guess as to where the other person would also guess.
What would you do if you didn’t know the day either? Try New years eve?
The law is just a yellow stone
Two players sit across from another in front of a 4×4 board. Each player has to choose a square. If both choose the same, they get $1000 each. One way to create an equilibrium is to place a visible marker, say a yellow stone, in any one square. Once this is done, there is little need to say anything else. The likelihood is that this will act as focal points do. Both players will choose the square with the yellow stone and earn $1000.
The Republic of Beliefs : A New Approach to ‘Law and Economics’
What we get from this is that a Focal point helps guide people to problems in coordination. This is also what law tends to do!
In a place where we see people behaving orderly, people have certain beliefs about the actions of others. They believe that those people will follow the law and vice versa, and they believe that those who break the law will be punished for it.
In this situation, if the punishment aspect is removed, the people would still follow the order since they are guided to an option that works well for them, and which they can trust others would believe in as well.
Obviously there are some issues here, that the law would work only when people treat the option to follow the law, as beneficial to them.
If someone can benefit by breaking the law because they think everyone else will follow the law, then the authority also has to be involved in this ‘Prisoners Dilemma Game‘. By becoming involved, the authority signals to everyone that they will be giving fines to people who don’t drive in the common direction.
The power to believe! 🙌🏾
Now, the law is just the cherry on top. It’s existence acts as focal point for the drivers and the authorities. The authorities uphold the law because they believe they will be punished by the government if they do not. Driver’s follow the law because they believe the authorities will uphold the law. And the government holds the police accountable because they believe they will be voted out of office if they do not, by those same drivers.
If the law were to go away, and the beliefs themselves stayed, would that mean the law was meaningless?
But then why aren’t people following the law?
Let’s go back to the situation I mentioned about Lahore traffic 😱 Even though there is a common ideal where everyone benefits because they know that there are dangers associated with driving in the opposite direction, people still do it.
I think there might be multiple reasons for this.
- There is not a strong belief in the authority to fine people, so the focal point fails.
- The belief of those drivers breaking the law differs from those following. They might believe that everyone goes in the wrong direction from time to time so they can too.
- This means that they believe they won’t get into accident because oncoming cars know that people will be going the wrong direction
- Going in one direction on a one-way road just isn’t that beneficial for them. Especially smaller vehicles that can just go in between everything! a.k.a there is no equilibrium at the situation where everyone goes in the same direction.
- Violating the traffic rules is just so common that the people do not treat the law as the focal point
Is that how law always works?
Not at all! It is only in certain situations where the dynamics of the “game of life” allow for the law to act as a focal point to a solution that works. It might not be the only solution, but the law puts a spotlight on it, hopefully in the interest of common good.
Now, there can be laws that are terrible, and there are situations where things like bribery and corruption are rampant. It is in those situations where applying game theory to law becomes a bit more complex.
Obviously, law, people, society, and culture have much more complex nuances that cannot be simplified to a simple game. But this approach offers just another vantage point to evaluate why people behave the way they do.