CH.8 - THE ROLE OF INSTITUTIONS IN POLITICAL & ECONOMIC MARKET FAILURE

Question 1

institution

Answer 1

p.278

Question 2

path dependence

Answer 2

A characteristic of decision making in which past choices shape the direction of change and condition future choices

Question 3

path contingency

Answer 3

p.286

Question 4

satisficing

Answer 4

The process in which, rather than seeking an optimal outcome, individuals find any outcome above a set threshold to be acceptable; this practice can create an efficiency in the use of resources involved in a decision process

Question 5

structurally induced equilibrium

Answer 5

A stable situation in which institutions have intervened to alter incentives and push individuals to select strategies that lead to a particular outcome among the range of possible outcomes

Question 6

veto points

Answer 6

Constraints, checks, or countervailing pressures that affect policymakers’ ability to unilaterally select a course of action