In the 1970s, some economists argued that federal environmental regulations were necessary so that interstate competition would not lead to this situation. For 10 points each:
[10h] Louis Brandeis (“BRAN-dice”) popularized what phrase for a situation in which competition drives jurisdictions to relax regulations or standards?
ANSWER: race to the bottom
[10e] The race to the bottom has been modeled as a form of this game. In this game’s only strong Nash equilibrium, both criminals betray their partner.
ANSWER: prisoner’s dilemma [or PD]
[10m] According to Oates and Schwab’s model, no race to the bottom exists because the national equilibrium value for this quantity is fixed. This quantity is related to growth in the central inequality of Piketty’s (“pee-keh-TEE’s”) Capital in the Twenty-First Century.
ANSWER: rate of return on capital [or ROC; prompt on r or “r is greater than g”; prompt on rate of return by asking “return on what?”]
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