Solving the Problem of Loafing

Thursday, July 8th, 2010

In Legislative Leviathan, Cox and McCubbins share an unusual solution to the prisoner’s dilemma faced by a team of laborers:

In prerevolutionary China large gangs of men would tug fair-sized boats up the Yangtze. The problem was that each man was tempted to slack off a bit. After all, if enough others were pulling, the boat would still progress; if too few others were pulling, it did not matter how hard one pulled anyway.
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Cheung has noted that the problem of loafing was so severe  that workers “actually agreed to the hiring of [someone] to whip them,” thereby ensuring that everyone both pulled and got paid.

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