Steven Landsburg has a great chapter in The Armchair Economist where he discusses how we can extract information about what REALLY MATTERS to people through creative economic devices.
“In Joseph Conrad’s novel, Typhoon, a number of sailors store gold coins in private boxes kept in the ship’s safe. The ship hits storm weather, the boxes break open, and the coins are hopelessly mixed. Each sailor knows how many coins he started with, but nobody knows what anybody else started with. The captain’s problem is to return the correct number of coins to each sailor.”
So how do you solve this problem? Landsburg proposes a very creative solution:
“Have each sailor write down the number of coins he is entitled to. Collect the papers and distribute the coins. Announce in advance that if the numbers on the papers don’t add up to the correct total, you will throw all of the coins overboard.”
He goes on to show us how he used a similar approach to decide what movie to see when he and his wife couldn’t come to an agreement.
“We each wrote our bid on a piece of paper. The high bidder got to choose the movie but was required to make a charitable contribution equal to the loser’s bid.”
Think about all of the decisions we make in coordination with others. Which movie to see? What bar or restaurant to visit? Which project or approach to pursue at work? Where to go on vacation? Making decisions when it’s just you and one person isn’t that hard — the real challenge is when you need to make decisions with groups of three or more. What often happens in larger groups is that the loudest or most persistent voice carries the day. At least there is a “social balance sheet” in a two person relationship. If one person always gets what he wants, he may soon be divorced or looking for a new best friend.
We can solve this problem with a little economics and a web site.
Idea: Choix.com — Make Better Social Choices
1. Any member of a group can create an invite, just like Evite or even Outlook.
Create an invite, invite friends, and pick the suggested time and location. Make it extremely easy for a creator to pull information in to the invite through an AJAX search through local web services (e.g., load all restaurants, bars, movie theaters, into the system).
2. Offer two decision models — “majority rules” and “highest bidder.”
Anyone on the invite list can propose an alternative location, time, or date (or you could allow the creator to choose which of the three are open to debate). Majority rules is a simple voting system with a voting period after which the choice with the most votes wins.
In highest bidder mode, the highest bidder wins the right to make the decision. But, like Landsburg’s movie decision system, she must also contribute the amount of money from the second highest bidder to either a pool for the group to spend or charity (allow the event owner to decide).
8 Comments
June 2, 2008 at 11:51 pm
New design is better than the old design, but the vertical bar to the left of the post makes it look like you’re quoting email.
I can assure you from direct experience that there’s no money in helping people decide where to go to for casual social events.
And jeez Mike, I love how MBA types think “bidding” is the answer to every problem of human life. It amuses me to think you believe you’re SOLVING the social balance sheet problem by bidding.
June 3, 2008 at 12:41 am
Thanks for the UI feedback. I need to get an RSS button up there soon…
On your comments on this idea:
+ What was your sample size? Empirical evidence with a sample size of one isn’t convincing. WHY can’t anyone make money here?
+ Why not argue WHY bidding would not work here? I didn’t propose it for everything, but I do think that it might work here. Scientific process tells us that the burden is on the cynic to use logic or data to refute the original hypothesis
June 3, 2008 at 7:11 am
Nice idea but a little small scale. A company i invested in earlier in the year has taken this idea even further by opening up the functionality. http://www.wooshare.com. (blatant plug sorry) Effectively any collaborative decision or action can be managed through the site and it allows for the tipping point to be the trigger.
Love the blog
June 3, 2008 at 8:02 pm
Shrug. Anyone who knows the history of Silicon Valley can come up with at least half a dozen examples. Anyone who can’t probably shouldn’t opine.
Since you’re such a deep reader of Robin Dunbar’s work, I assumed you’d agree with me that our forebrains evolved largely to track one and only one factor: social reciprocity. Not EFFICIENCY… reciprocity. Which of those does your system maximize?
Your system is basically designed to let the richest person in any group always get their way AND never have to feel guilty about it. Dunbar would predict that after one or two rounds of play, everyone else would conclude “rich asshole, zero reciprocity” and not want to get together socially — UNLESS they’re the kind of person who is happy to go anywhere as long as someone else is paying the bills, e.g. a gold-digger.
I think we can all agree that bidding is a wonderful way for strangers to express their preferences in a system with scarce but multiple resources. In other words, it’s great at solving the “you can each have anything, but you can’t all have everything” problem — perfect for filling out a business school class schedule or buying Pez dispensers on Ebay. But when it comes to friendship, the thing that matters isn’t efficient distribution of resources, it’s reciprocity… so good old-fashioned “taking turns” is your best strategy.
June 4, 2008 at 5:37 am
Joyce,
Excellent comment.
In this system the “winner” pays the “losers.” Wouldn’t the system either allow the person who really cares to get his way independently of his wealth (my argument) or redistribute wealth from the rich to the poor (your argument)?
If you are right, I would be happy to participate in this system and would hope to lose most decisions so the big spender could pick up my drinks.
-Mike
June 15, 2008 at 7:01 pm
I’m actually not advocating redistributing wealth from rich to poor. In fact I’m saying that for most people, no amount of such redistribution would satisfy them — because instinctively they know that what you propose is antithetical to friendship.
I think maybe what’s happening here is that you’re mistaking social reciprocity in the evolutionary psych sense for reciprocity in an economic sense. In economics, because there is a universal medium of exchange — money — two people can always (modulo differing marginal value of a dollar) agree on how much it would cost to make them happy in a transaction. As you say, if we were perfectly economically rational actors, your scheme would strike everyone as delightful rather than creepy.
Since you’ve read Dunbar’s _Grooming, Gossip, and the Evolution of Language_ carefully, you’ll know that reciprocity has little or nothing to do with direct economic gain — we’re actually more complicated animals than that. His argument is that we like to spend time with our friends because it stimulates our brains’ pleasure centers (via information exchange, laughter, and shared activity), and that we seek to maximize this pleasure. Furthermore, during these social exchanges we are seeking to maximize information about whether the other person is likely to reciprocate if we do them a favor.
So let’s say you’re Larry Page, and you like to go bowling; and I’m Larry Page’s poor grad student friend and I loathe bowling. In your system, Larry would outbid me 100% of the time and we would spend all our time together bowling. But will I actually be happy? No I will not — because my brain, which is highly evolved to detect reciprocity, is telling me that Larry doesn’t actually care about my opinions or preferences and feelings. This means that Larry is more likely to cheat me in the future, and that therefore investing a lot in a friendship with him is unwise on my part. Furthermore, let’s face it: if I’m unwillingly being dragged out to an activity I loathe, am I maximizing the stimulation of my pleasure centers? Clearly not, unless I’m the sort of person to whom a $5 marginal gain brings true pleasure at the endorphin-releasing level.
I’m sure somewhere there are economists who have done research on how people value social reciprocity in terms of economic reciprocity, so for all I know there really is a price at which economic calculations can override the deeper dictates of our brains. But in everyday life, I think the fact that your idea has never been implemented by any society in the history of mankind suggests that it’s a loser.
June 15, 2008 at 8:43 pm
“If you are right, I would be happy to participate in this system and would hope to lose most decisions so the big spender could pick up my drinks.”
Mike: if that statement is really true you are what most people call a sociopath. No offense - a large proportion of successful executives are sociopaths - but you see friendship in a completely different way than most people.
It’s also possible that you are just enamored with the idea that you’ve solved something and you’re seeking confirmation. It happens. But think about it.
You wouldn’t mind doing what Larry Page wants to do? Every single time you go out? As long as he paid you for your time? There’s a name for this; it’s called escorting. Or, if you’re a female, it’s sometimes called gold-digging.
Or, what if you were the richest friend? You wouldn’t mind having a lot of hangers-on? Who, at least in part, were there for the free drinks? You don’t want them to be sharing in the *fun* of going out together, sharing mutually in the triumphs and defeats of a friendly bowling game?
June 15, 2008 at 8:48 pm
Wow. Touched a nerve with this one.
Isn’t it a bit extreme to call someone a sociopath or prostitute for proposing a way of picking which bar to visit? I wasn’t proposing who to go out with, but rather simply a way to broker a decision about where to go when many people have conflicting opinions. Today the winner is often the strongest personality 9 times out of 10. I was simply exploring other alternatives.
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