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ISET Economist Blog

Coordination Games
Saturday, 05 March, 2016

Some years ago my dad, who is an avid blogger, wrote a piece about a plague of disorderly advertising that was choking Kyiv. Notices promoting everything under the sun were plastered on the walls, fences, lamp-posts, in metro cars, on the bus stops, even on the pavement. Our own building’s entrance was a sad sight – always covered with debris of paper and glue.

Our neighbor, an elderly lady, labored heroically to wash off the wall and the door frame every now and then, but it was a Sisyphean task.  The clean wall only served as a magnet for new advertisements, and the cycle continued.

One day my father decided to do something different. With a piece of plywood and a few planks he put together a makeshift notice board and hung it outside the building entrance. A few days later something almost magical happened – the first notices appeared on the board, but the wall and the door were clean…

My dad is a linguist, and his acquaintance with economic theory goes as far as reading Karl Marx’s “Capital” in his early student years. But this time he indeed acted as an economist – he solved a problem in mechanism design, a problem which belongs to the class of coordination games in economics. The notice board provided a focal point that allowed the “players” – the building residents and the advertisers – to coordinate on a mutually beneficial equilibrium. At least for our building, the notice board was an easy and smart alternative to the laborious task of hunting down and punishing the “ghost” advertisers.

This winter when I was visiting my parents I was again reminded of the power of mechanism design to solve public nuisance problems. Dog ownership is very popular these days, and the path around our neighborhood lake serves as the main dog promenade. The problem is that dog owners rarely bothered to pick up waste after their pets, creating a major inconvenience, not to mention a serious public health hazard. This winter, however, the area around the lake looked different. It was much cleaner than I had ever seen it before. There also appeared green posts with metal bins and colorful signs attached to them. The bins were of two kinds  one contained a bag dispenser and another served as a wastebasket. The sign on the post provided instructions on how to use the contraption, also reminding the dog owners to be responsible and community conscious.

I can tell you I was overjoyed more than I could express in words – both as an economist and a citizen. As an economist, I witnessed another elegant solution to the common coordination problem. As a citizen, I was reminded that only a small action is sometimes required to transform the face of our community for the better. As human beings, we may be instinctively drawn to beauty and order, but most of the time we are too lazy to make an effort to pursue them.

Nowadays I am back in Tbilisi, taking daily walks in Vake and Vera. Both are middle-class neighborhoods, boasting high rates of dog ownership, and, predictably, plagued by the same dog waste problem. I am of course irritated by the dog owners who don’t bother to carry plastic bags or clean up after their pets, but I also realize that policing and prosecuting such behavior is probably not the most efficient way to deal with the problem. Perhaps “pet stations” will provide the solution? They might! I am only certain of one thing – it will be useless to wait for the government or the city hall to take the first steps. Ultimately everything depends on the citizens who should take responsibility for their community and their environment. Taking responsibility may be hard, but try it – it is a powerful feeling.

The views and analysis in this article belong solely to the author(s) and do not necessarily reflect the views of the international School of Economics at TSU (ISET) or ISET Policty Institute.
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