Evaluate Pareto efficiency, check the Nash equilibrium, and explore when civil society is preferred to the state of nature.
An outcome where no one can be made better off without making someone else worse off.
A move to a new outcome that makes at least one player better off and no one worse off.
An outcome is Pareto dominated if a Pareto improvement from it exists — someone could gain and no one would lose.
Is the Nash equilibrium always Pareto efficient? Not necessarily. The Prisoner's Dilemma is the classic counter-example.
| Individual B | |||
|---|---|---|---|
| Refrain | Steal | ||
| Individual A | Refrain | ||
| Steal | |||
Source
Clark, W. R., Golder, M., & Golder, S. N. (2013). Principles of Comparative Politics (2nd ed.). CQ Press.
Chapter 4: The Origins of the Modern State (Civil Society and the Social Contract; The Predatory View of the State), pp. 109–117.
The sovereign imposes a punishment (p) on anyone who steals, making cooperation rational. But the predatory view warns: this sovereign also charges a tax (t) and holds a monopoly on violence. Civil society is only preferred when punishment is high enough to enforce cooperation and the tax is low enough that citizens are still better off than in the state of nature.
| B | |||
|---|---|---|---|
| Refrain | Steal | ||
| A | Refrain | ||
| Steal | |||
| B | |||
|---|---|---|---|
| Refrain | Steal | ||
| A | Refrain | ||
| Steal | |||
Source
Clark, W. R., Golder, M., & Golder, S. N. (2013). Principles of Comparative Politics (2nd ed.). CQ Press.
Chapter 4: The Origins of the Modern State (Civil Society and the Social Contract; The Predatory View of the State), pp. 109–117.