According to Fox 5 News, on February 26, 2016, the San Diego Chargers announced
ID: 2806799 • Letter: A
Question
According to Fox 5 News, on February 26, 2016, the San Diego Chargers announced that they would be pursuing a downtown stadium project near the convention center and that they were seeking more than $1 billion in public funding because the “multi-use facility would generate economic activity on hundreds of days per year, including by attracting major sporting and convention events that San Diego cannot now host.”
a) The Chargers are essentially arguing that the public should contribute to the project because once the stadium is built all residents benefit from its presence and none can be prevented from benefitting. Using the tools discussed in class, make the formal economic argument for why the collective should pay for the stadium. Demonstrate and explain your answer.
b) In general, what should be the goal of collective action? Explain.
c) Why is it difficult to achieve this goal? Explain.
d) What mechanism do we normally use to make collective decisions? How does this mechanism address the problem identified in (c)? Explain.
Explanation / Answer
(a).
As per information of the question it is clear that stadium project need high volume of funds and it is also given that multi-use facility generate economic activities.
So it is clear collective funding will generate various benefits like; there will be a wide controlling ownership on this stadium roject as a result economic benefits will be shared by many numbers of peoples. So we can say collective funding is a good option.
Suppose if all funding is made by Chargers the ultimate right on the overall benefits will be enjoyed by the Chargers but as we know this is not a motive of an economy because we always need a development in such a manner which leads to decentralized worth amongst all citizens. Hence collective funding is a good option.
Stadium project also will generate various economic actvities so after collective funding all concerned parties can be a active member for these economic activites as well,
(b).
Main goal of collective action is to widening the controlling & ownership of any project. Apart from this we also know that collective actions also results in acurate decision making due to involvement of various parties. Decisions made on the basis of judgement of one or few individual does not always result to positive outcomes hence we need collective actions.
We laso know that if there is a wide range in the actions (collective action) then chances of errors also minimized.
(c).
Achieving goals is not so simple always because it requires perfect & accurate planning and perfect execution of that palnning too.
In case of collective efforts we see various types of conflicts due to differences in the interests of the stakeholders hence management of these conflictions is main issue in case of collective efforts.
As we have discussed various benefits of the collective funding & collective efforts but there are some challenges too. So as a result we can say that if we have managed the negative aspects then we will get positive results otherwise it will be very difficult to achieve goals.
(d).
In case of collective decisions there should be a clear definition of the authority & powers of the various stakeholders because all satkeholders are authorized to take part in the decision making process.
There should be perfect machanism to address the issues of non-satisfied members. Apart from this our machanism should focuss on achieving collective goals not on achieving individual goals. In other words we can say that there must be subordination of individual interests to common interests. All stakeholders must be make aware about the significance of overall & collective goals.
So such machanism will help in solving problems of mutual conflicts and also will leads to result oriented decision making.