Cournot Equilibrium @ the Pub
Last night at Sophia's, the local bar and Thai restaurant in Davis, everyone was yelling at each other because it was Friday night and I was smack dab in the middle of a bar. So it's expected that I leave with a ring in my ear. But what if everybody could talk at a moderate voice? Wouldn't that be better? You would still be able to hear what someone within high-fiving distance was saying and my throat would be less sore and my ears would have thanked you.
Isn't this the classic externality? It's not unlike pollution and traffic congestion in that we don't internalize the cost of our actions when speaking in the local pub. When I raise my voice so that I can be heard, it makes it slightly harder for the table next to me to continue their conversation at a reasonable volume and so they raise their volume, and in no time I'm screaming and you only see my mouth move. Maybe Italians and Spaniards have had it worse and so have developed elaborate gestures to make up for the loss of vocalization in such situations? My gesture repretoire is inadequate for communication, so please don't be offended if I politely leave you to your drinking.