Monthly Archives: July 2011

Taking chances with dinner

Splitting up restaurant bills is annoying.

Good friends often avoid this cost by one of them paying for both one time and the other doing it next time, or better yet, by not keeping track of whose turn it is and it evening out in the long term.

Coins before Euro - European Coins In Circulation

Image via Wikipedia

It’s harder to do this with lesser friends and non-friends who one doesn’t anticipate many meals with because one expects to be exploited by a continual stream of free-riders who never offer to pay, or to have to always pay to show everyone that you are not one of those free-riders, or some other annoying equilibrium.

There is an easy way around this. Flip a coin. Whoever loses pays the whole bill.

Why don’t people do this?

Here are some possible reasons, partly inspired by conversations with friends:

 They don’t think of it

Coins have been around a long time.

It’s hard to have a coin that both people agree is random

One person flips and the other calls it?

They are risk averse

Meals are a relatively small cost that people pay extremely often. They should expect a pretty fair distribution in the long run. If the concern is having to pay for fifty people at once when your income is not huge, either restrict the practice to smaller groups or keep the option of opting out open.

Using a randomising method such as a coin displays distrust, which is rude, but not using one would be costly because you don’t actually trust people

A coin could also display your own intention to be fair. And it doesn’t seem like such a big signal of distrust – I would not be offended if someone offered this deal.

Buying meals for others is a friendly and meaningful gesture – being forced to do it upon losing a bet sullies that ideal somehow

Maybe – I don’t know how this would work

Asking makes you look weird

This is an all purpose reason for not doing anything differently. But sometimes people do change social norms – what was special about those times?

Sharing in the bill feels like contributing to something alongside others, which is a better feeling than paying all of it against your will, or than not contributing at all.

Maybe – I feel pretty indifferent about the whole emotional experience personally.

There are many inconvenient small payments that seem like they could be improved by paying a larger amount occasionally with some small probability. Yet I haven’t seen such a method put to use anywhere.

Cheap signaling

Chocolates

Image by J. Paxon Reyes via Flickr

If all this stuff people do is for signaling, wouldn’t it be great if we could find ways of doing it more cheaply? At first glance, this sentiment seems a naive error; the whole point of paying a lot for a box of chocolates is to say you were willing to pay a lot. ‘Costly signaling’ is inherently costly.

But wait. In a signaling model, Type A people can be distinguished from Type B people because they do something that is too expensive for Type B people. One reason this action can be worthwhile for Type As and not for Type Bs is because type As have more to gain by it. A man who really loves his girlfriend cares more about showing her than man who is less smitten. A box of chocolates costs the same to both men, but hopefully only the first will buy it.

But there is another reason an action may be worthwhile for As and not for Bs: the cost is higher for type Bs. Relating some intimate gossip about a famous person is a good signal that you are in close with them because it is expensive for an ignorant person to fake, but very cheap for you to send.

Directly revealing your type can be thought of as an instance of this. Taking off your shirt to reveal your handsome muscles is extremely cheap if you have handsome muscles under your shirt and extremely expensive if you do not.

This kind of signaling can be very cheap. It only needs to be expensive for the kinds of people who don’t do it. And since they don’t do it, that cost is not realised. Whereas in the first kind of case I described (exemplified by chocolates), signaling must be relatively expensive. People of different types each have to pay more than the type below them cares enough to pay. i.e. what the person below thew would gain by being mistaken for the type above.

Cases of the second type, like gossip, are not always cheap. Sometimes it is cheaper for the type who sends the signal to send it, but they still have to pay quite a lot before they shake off the other type. If education is for signaling, it seems it is at least partly like this. University is much easier for smart, conscientious people, but if it were only a week long a lot of others would still put in the extra effort.

There can also be outside costs. For instance talking often works the second way. It is extremely cheap to honestly signal that you are an accountant by saying ‘I’m an accountant’, because the social repercussions of being found out to be lying are costly enough to put most people off lying about things where they would be discovered. While this is cheap both for the signalers and the non-signalers, setting up and maintaining the social surveillance that ensures a cost to liars may be expensive.

So if we wanted to waste less on signaling, one way to make signals cheaper would be to find actions with differences in costs to replace actions with differences in benefits. I’m not sure how to do that – just a thought.

How much do you really love the internet?

Would you give up the internet for a million dollars?

Many people say they would not. If you are one of them, and in a committed relationship, which of the following is true:

a) You would also not give up your partner for a million dollars

b) The internet is more valuable to you than your partner

The first one looks safer. But people change partners a lot, which suggests for many there is much less than a million dollars expected difference between one’s partner and the next best alternative, since the next best alternative frequently scales that gap and becomes the best. If every time a person changed partners the relative value of the new and old partners had changed by around two million dollars in the new partner’s favor, people should pretty soon stop expecting their current partner to be worth so much in the long run.

It’s easy to offer the internet endless love while nobody ever offers you much reward for giving it up. Relationships are an interesting ‘sacred value’ to compare because we really are frequently in a position to give one up permanently for some other benefit.

Podcast with Robin Hanson

Robin and I have started an occasional podcast series. Below are the first two episodes. The sound quality is not fantastic I’m afraid, especially at (short) places in the second one.

Signaling

Idealism