Ch. 1 | Intro (Sobel) Flashcards
autotarky
A policy that seeks complete isolation from the global economy; self-sufficiency
Backward induction
The process of examining a decision in reverse, in order to try to understand the rational calculations that could lead to such a decision
Causality
The direct connection between a cause and an effect; a relationship in which a change in input A brings about a change in outcome B
Centralized means of allocation
Distribution mechanisms that are more hierarchical and authoritative than the voluntary, consensual nature of a market
Closed-economy models
Approaches to the examination of economic conditions in a society by ignoring economic factors and conditions external to the nation and considering the nation as an isolated entity
Completeness
The quality that defines two alternatives as both comparable and capable of being placed in a hierarchy
Condorcet paradox
A situation in which a voting rule aggregates individual preferences that are complete and transitive, but produces a collective outcome that is intransitive
Costs
The goods that we forgo when we choose to consume a particular item
Data
Q
Decentralized
QEconomic systems in which consumption, production, and allocation choices are voluntary, are determined by supply and demand, and are coordinated by a price mechanism
Dependent variable
The phenomenon that social researchers are attempting to explain, a factor that is influenced or caused by an independent variable
Dominant strategy
A strategy that a player would select regardless of the actions of other players
Fallacy of composition
A strategic situation in which the outcome is different than simply the sum of the parts, either greater or less
Game theory
The systematic study of rational choice in strategic settings
Global capitalism
A particular form of social and economic relations connecting national economies, by which exchange across nations occurs primarily in markets, where consumption choices are voluntary, are determined by supply and demand, and are coordinated by a price mechanism
Globalization
The processes by which people in one society become culturally, economically, politically, strategically, and ecologically closer to peoples in geographically distant societies
Hierarchy of preferences
A ranking of preferences along a single dimension based upon self-interest—creating a hierarchy from most to least preferred
Independent variable
Factors that, when changed, cause a shift in another factor
Indifference
The state of impartiality, or lack of preference between alternatives that are equal but still comparable
Institutions
The formal and informal “rules of the game,” laws, and practices that structure the incentives of individuals
Intransitive collective outcome
A social preference ordering that does not produce a strict hierarchy of social preferences
Invisible hand
An idea proposed by Adam Smith, theorizing that an unseen force guides self-interested individual behavior in competitive markets to promote the welfare of society without deliberate intent
Methodological individualism
A claim that individuals—not larger units of aggregation such as nations or societies—make choices
Models
A simplified intellectual construction that postulates a causal relationship across a set of variables, thus providing a tool for examining similarities across social behavior
Nash equilibrium
A stable equilibrium in a social interaction whereby no actor can improve her payoff by unilaterally selecting another strategy
Normative
Q
Normative theory
A statement about how we want the world to work, what “ought to be”; see positive theory
Open-economy models
Political economy models in which connections across national economies become important factors to consider when exploring a nation’s economic and social welfare and the politics that surrounds it
Political economy
Q
Positive theory
A model for how the world actually works, “what is,” rather than how we might want the world to function; see normative theory
Positivists
Q
Power
The tools, the means, to influence outcomes and achieve one’s own ends; the ability to prevail and overcome obstacles
Preferences
Statements about individual wants, possibly including material wants as well as social and spiritual wants
Realism
The reliance of governments on their own means, rather than on international treaties and law; a self-help strategy for constructing public policies to address a world of what is, not a world of what ought to be
Realpolitik
Q
Scarcity
The concept that all items we consume—those produced by man and those produced by nature—exist in some finite amount, regardless of the demand for those items; this is a key assumption, as it generates the conditions for competition, cooperation, and conflict over the distribution of resources and opportunities
Self-interest
The notion that people make choices based upon their hierarchy of preferences and their budgetary constraints
Social trap
A situation in which what appears to be an individual’s maximizing, self-interested choice for obtaining a preferred outcome results in a subpar outcome both for the individual and for the larger group or society; this unexpected outcome occurs because of the structure of interactions of the choices made by multiple individuals
Sovereignty
The principle that the government of the state is the supreme legitimate authority within its territorial borders; in terms of international relations, it means that, theoretically, no state can exercise legitimate authority within another state’s boundaries
Spatial model
A useful visual tool for examining the distribution of preferences
Spurious
Q
Stable equilibrium
Q
Testable hypothesis
Assumptions about behavior that can be evaluated with information from the empirical world
Transitivity
The quality that defines three or more alternatives as comparable and capable of being placed in a hierarchy of preference
Validity
The accuracy of a model or claim
