Tuesday, October 8, 2013

Got Tickets? Sorta

The big game starts at 1 pm. You know the local sports pubs will be packed. The common solution is to get there very early, grab a table or two, put coats on adjacent seats, and uncomfortably try to wait out the countdown to kickoff. Are my friends coming? Is the server judging me?

This tactic is costly to your time and the pub's opportunity to seat a lunch customer. Surely there is a better way. What if the pub sold tickets (or it could call them reservations)?

You and a friend each buy a ticket for, say, $6 apiece and get a guaranteed seat starting at 12:50 pm. Is $6 worth the peace of mind of having a low-stress seat and the wasted time of hoarding space an hour or more in advance? Probably so. If not, are there enough other people who do think this is a good price? Probably so. If not, maybe the price should be $4. It will work itself out over time, since the pub has a strong incentive to keep the tables full.

This is a win-win, if framed correctly. Maybe the pub could introduce the concept by initially keeping some tables first-come, first-served.

Shhh! Don't Tell 'Em You Want Compromise

With the uproar over the partial government shutdown and the debt ceiling stalemate, there seems to exist a sentiment that federal politicians are somehow not following the wishes of the electorate. Of course the electorate in not a monolith, but the feeling from news programs is that the deviation is not just unrepresentative but completely detached from any of their wishes. Interviews show the public wanting negotiation and compromise to get back to a more stable environment.

Maybe the general public's frustration was all too predictable. Further, maybe the general public unwittingly contributed to the rancor. How?

Politicians know that the American people are likely to demand compromise in the face of prolonged arguments:  You want eight popsicles; we want twelve popsicles; make it ten and get back to business.

So if you are expected to compromise at the end, then the rational decision is to adopt the most radical position initially. Where do you think the eight and twelve came from?

At the extreme, imagine a company that has a history of difficult salary negotiations. In response, the company implements a policy whereby the applicant and the manager split the difference to determine the salary. How much are you going to ask for? How much will your boss ask for? Now we're talking extreme amounts of popsicles.

In a counterfactual universe, the public values not compromising and sticking with one's initial demand. This seems counterintuitive to a public that wants less fighting. But to what outcome would this lead? If you have to stick with your first demand or very close to it AND you know the other guy does as well, then your initial demand will have to be very close to what you believe the fair outcome would be. If your demand is too far from your opponent's then you risk violating what the public values. Since you both understand this, your fight will be over 9.1 and 9.4 popsicles. Boring...just like you like your politicians.

You Cut My Hair Too Short; Perfect!

How do you judge the quality of your haircut? How should you?

It's common to judge the quality of your haircut based on how it looks right after it's been cut, even though you know that it will be weeks before you return for another cut. Given that, it might make more sense to judge your haircut over the entire interval before the next visit.

Imagine one men's haircut that looks perfect today. After four weeks the hair has grown a half-inch, which is noticeably shaggy for the typical male professional hair length. On average, this guy's hair is a quarter-inch too long over a four week period.

For comparison, imagine if he had gotten the same style haircut but a quarter-inch too short on purpose. Although his hair is a little short on Day 1, by week four his hair has been only an eighth-inch away from ideal on average. Also, he still enjoyed one day of perfect length during the four week interval just like the earlier scenario had.

Does this extend to longer hairstyles? It does if the period between cuts is longer, which is often the case. If you wait four months between cuts, then that's two inches of growth. One inch off on average in the first scenario versus one quarter-inch off in the second. An important assumption here is that your hairstyle looks equally good/bad whether it's a little too long or a little too short. If not, you can adjust the intentional extra chop to stay at optimal.