Externalizing between conformers

or Why I could conceivably support banning smoking, part 1

Suppose that people are rational and their goals are consistent, and they are free to choose whatever activities they like, as long as they don’t harm others. Suppose we don’t care about equality or whether lifestyles are nihisistic, or anything else Wikipedia claims might be wrong with libertarianism. Should we expect people to approximately end up with the best sets of behaviour? If they smoke, should we infer that they like smoking more than they dislike having lung cancer far in the future? If they watch intellectual documentaries rather than porn should we assume that they have wisely established that they like looking smart more than raunchy fantasy? Many think so, and support libertarianism for this reason.

This makes sense if humans are independently choosing activities. But the all time favorite activity of nearly everyone is doing what other people are doing. This makes such an argument more complicated.

Imagine everyone is doing A. Everyone likes doing B more than doing A, but not as much as they like conformity. There would be a huge gain to a coordinated shift to B, but nobody moves there alone. In some such situations those involved arrange coordination, but often it is impossible. If there are many equilibria like this, and no means to move to better ones, intervention by someone with the power to force a coordinated move could be a great thing.

A good example of this I saw was during first year at college. Everyone used to go to Southpac to drink. I was baffled, as it was probably not just the worst night club around, but actually the least pleasant place I had ever been, possibly but not definitely excluding ankle deep in poo and mud with rotten meat juice running up my arms and dogs clawing at me. When I asked, everyone said they hated it, but it was overall the best place to go, because that’s where everyone else went. It seemed that there were too many people for any student to easily coordinate everyone going somewhere else, so the original equilibrium remained until Southpac was closed down for using (cheap, poisonous) methylated spirits in the drinks. The student council got sponsorship somewhere else, and everyone else went there instead.

Roger
Southpac Elsewhere
Everyone else Southpac 2 1
Elsewhere 0 3

Payoffs for Roger in choosing  a nightclub

In the above table, assume ‘everyone else’ is made up of people in the same situation as Roger. Roger doesn’t want to dance alone, so he gets 2 happiness from going to the same club as everyone else. He also doesn’t like being attached to the floor by stickiness and vomit, but it’s less of an issue, so he gets 1 happiness from going anywhere but Southpac. Everyone going to Southpac and everyone going elsewhere are both Nash equilibria, but the going elsewhere equilibria is half as good again.

Why wouldn’t people be able to coordinate to change? One reason is group size or ungainliness. The other is that liking the current activity sends a signal. Suggesting everyone choose a different activity to signal group loyalty for instance marks you as disloyal as fast as refusing to participate alone does.

This doesn’t necessarily mean government intervention is necessary. That might still be worse than freedom, because if the government were to legislate culture it would be hard to verify that they were doing it in only the justified instances. It does seem to mean that free choice will not lead to the best outcomes however, undermining some justification for libertarianism.

Whether we should be concerned about externalities that others choose to bear is a matter of contention. If you should be encouraged against an activity because others want to do the same as you and they don’t like that activity, you should probably also be encouraged not to demonstrate homosexuality where it is unpopular or be ugly for instance. These also harm others, because they choose to disapprove. I think most would disagree that externalities caused by others choosing to care what you are doing should be regulated. I suspect such a sentiment is just a heuristic for allowing those who have the greatest interests in something having control over it, so people should usually be allowed to do unpopular things visibly, but in this case forced change may be a good thing.

7 responses to “Externalizing between conformers

  1. The example works because a nightclub is somewhere that people go to be with other people. It falls apart completely if you replace “nightclub” with “bowling alley”. The real problem, here, is your unevidenced (and probably untrue) statement that, “the all time favorite activity of nearly everyone is doing what other people are doing.”

    • To the contrary, if bowling were not a relatively popular pastime, I think you would be much less likely to do it. In other times and places bowling is uncommon but known of, do you suppose that if you were born there you would do it anyway? Doing what others do does not mean doing it with them.

  2. We’ve followed Roger (a guy who wants to dance) for a while as he tried to make a decision.
    Let’s follow Dave (a career politician) for a while, as *he* tries to make a decision. He needs to find stuff to champion that’ll get him re-elected. He has search costs to pay in determining public opinion. He’s subject to the same sorts of human failings as Roger. He’s a member of a political party that’s subject to the same sort of group dynamics as Roger’s dancing buddies.
    When we wave the magic “Government” wand… what sort of legislation should we expect to end up with? (I humbly propose a short course of study starting at http://en.wikipedia.org/wiki/Public_choice_theory.)

  3. What you say is probably true; but I don’t think it explains why restaurants don’t voluntarily ban smoking.

    There are problems drawing direct analogies from your example, one being that people prefer to go to restaurants that are less, rather than more, crowded. But skip all that; you’re never going to explain why libertarian approaches to smoking and restaurants don’t work with economics. I no longer believe that it is an economic problem.

    The theory is that some restaurants could voluntarily ban smoking, and become more popular with people who dislike smoke. Fact is, I have never in my life seen or heard of a single restaurant anywhere that ever tried it. Not even a “no smoking Tuesdays”. Nowhere, not once, never.

    You can’t say there’s a failure of the market when the competitors have never tried to compete. What we see is not a market failure in terms of economics, but in terms of imagination or courage.

    • In the UK, the entire Weatherspoons chain was going to go smoke-free just before smoking in pubs was legislated against. There’re also a fair number of in dependent establishments that did so, and most places have smoking and non-smoking areas, with relative sizes in proportion to the inclinations of their clientele. Cite: John Meadowcroft.

  4. Pingback: Divide individuals for utilitarian libertarianism « Meteuphoric

  5. Pingback: Smoking bans and game theory «  Modeled Behavior

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