The Social Psychology of Burning Man

(Cross-posted at Scientific American’s Guest Blog.)

I just finished shaking the last of the desert dust out of the bags I brought to this year’s Burning Man, an annual week-long event in Nevada’s Black Rock Desert that takes its name from the burning of a giant effigy at the end of the week.  According to popular perception, Burning Man is a non-stop rave thrown by a bunch of drugged-out naked hippies. That’s not entirely false, admittedly, but it’s only a small piece of the picture.

Burning Man is also a large-scale social experiment. The 50,000 people who converge on the desert each year create a temporary but legitimate city – roughly the size of Santa Cruz, CA or Flagstaff, AZ — with its own street grid, laws, and social mores. In the process, they attempt to do away with several of the most fundamental institutions underlying modern civilization. Clothing, for example, is optional at Burning Man, and many people opt out of it.

Money, on the other hand, is not optional: it’s explicitly banned. People exchange goods and services constantly, but money never changes hands, except in one specially designated central tent which sells coffee and tea. I’ve heard Burning Man sometimes described as a “barter economy,” but that’s not quite right. It’s more of a “gift economy,” in which people give strangers food, drinks, clothing, massages, bike repairs, rides back to camp, and more, all without any expectation of reciprocation. Many attendees also invest a great deal of their own time and money beforehand to make other people’s experiences at Burning Man more beautiful, interesting, and comfortable, setting up tents or couches for public use or crafting elaborate art installations out in the desert for others to discover.

Read the rest at Scientific American.

An economist’s tips for dining and cooking

Just finished Tyler Cowen’s latest book, Discover Your Inner Economist, which is full of tips for applying the principles of economic reasoning to your everyday life. One of my favorite things about Tyler is that he’s even more obsessed with food than I am — check out this Washington Post article about his twin passions for food + economics. (And if you live in the DC metropolitan area, you should read his detailed and insightful “Ethnic Dining Guide” to the area.)

Tyler also shares my passion for maximizing utility in clever ways. So my favorite part of the book, unsurprisingly, was his section on how to get as much enjoyment as possible from dining out and cooking. Below, I’ve culled a few of Tyler’s best tips:

Tip #1: Pay attention to relative rents. Want to eat out in your city? Your best bet is to look for restaurants in low-rent neighborhoods that are near high-rent neighborhoods. Their costs are lower, but they’re close enough to where foodies live that they’ll be catering to foodie standards. There are better restaurants on 9th avenue (on the West side of Manhattan) or 1st avenue (on the East side of Manhattan) than there are on 5th avenue.

Even turning the corner can make a difference. In Manhattan, the avenues are generally busier than the cross-streets, and have correspondingly higher rents, so if you look for restaurants on cross-streets you’re likely to find a better deal. You’re also likely to find better food. Restaurants in high-traffic areas can thrive just by attracting a lot of first-time customers who happened to be passing by, so they have less of a need to make their food good enough to attract repeat customers.

Tip #2: Avoid “ingredient-intensive” dishes at ethnic restaurants. Eating at an ethnic restaurant in the US? Avoid simple dishes that succeed or fail on the quality of their raw ingredients, like a steak at a Peruvian restaurant. Because raw ingredients are mass-produced in the US, they’re generally inferior to their counterparts in the home country, so those dishes are at a comparative disadvantage when you order them in the US. Look instead for dishes that rely on a skillful preparation with lots of different ingredients and complex sauces and flavorings. (Or as Tyler puts it: look for dishes that are “composition-intensive,” rather than “ingredient-intensive.”)

Tip #3: Don’t trust pretty dishes. This is one that I came up with on my own, and I was both gratified and kind of bummed to read it in Cowen’s book: When you’re dining at a nice restaurant, go for the dish that sounds the least appetizing. Why? Because dishes that sound delicious can retain their place on the menu just by attracting a lot of first-time orderers. Even if most people who order that dish are disappointed with its taste, there’ll always be a steady stream of new people who want to try it because it sounds good. Same for dishes that sound familiar (think “roast chicken”). Because there are a lot of people who aren’t adventurous eaters, those dishes will always have an audience even if they’re not very tasty. If you’re an adventurous eater whose main priority is tastiness, you should look instead for the dishes that have to be tasty in order to stick around.

(My original formulation of this principle was with regards to desserts: I don’t trust pretty desserts. Those adorable petit-fours in the display case, all decorated with pastel-colored flowers? They’re likely to be dry and bland. But they stick around because so many people order them for the first time thinking “That looks so good!” Meanwhile, the homely pan of lumpy brown bread pudding or cobbler isn’t going to catch as many people’s eyes, so if it’s still on the menu, it must taste divine.

Tip #4: High inequality is the foodie’s friend. If you’re planning a “food tourism” trip, aim for countries with high inequality. It’s sad, but true: to support an amazing cuisine, it helps to have a wealthy upperclass willing to pay for it, and a poor underclass willing to work for relatively low wages preparing and serving the food. Cowen recommends both Mexico and Haiti as exemplars of haute cuisine in the Western hemisphere. By contrast, France has been gradually slipping from its spot at the top of the fine dining hierarchy, because the high wages and strict labor laws there have pushed up the costs of running a restaurant.

Tip #5: Read cookbooks with a grain of salt.  Every home cook has some rough, implicit exchange rate between the cost she’s willing to pay (in terms of money, time, calories, etc.) for a given level of deliciousness of the dish. But the recipes in your cookbook might not be calibrated to your preferred exchange rate. In fact, there are a number of ways in which the implicit exchange rate assumed by your cookbook is likely to systematically diverge from your own.

For example, older cookbooks were written during an era when the value of the cook’s time was low. Meals were prepared either by professional cooks or by wives, both of whom were pretty much expected to be cooking all day long. So if there was a modification to a recipe that would cost you an additional 2 hours of time and improve the dish only slightly, an old recipe might well recommend that you do it. By contrast, you probably value your time a lot more highly than the cooks of previous generations, so that tradeoff might not be worth it to you.

Relatedly, cookbooks published by famous chefs are likely to recommend high levels of elaborateness that pay off only in small improvements in taste. That’s because the goal of a famous chef in publishing a cookbook isn’t solely to help you make delicious food, it’s to bolster that chef’s reputation as a virtuoso. So he has an incentive to recommend recipes that are more time-consuming, difficult, and involve more ingredients than absolutely necessary for maximizing the deliciousness of the final dish. In other words, don’t be afraid to take shortcuts — just because some step is recommended in a recipe, that doesn’t mean it’s a “good deal,” in terms of the ultimate taste of the meal.

Does it make sense to play the lottery?

A very smart friend of mine told me yesterday that he buys a lottery ticket every week. I’ve encountered other smart people who do the same, and it always confused me. If you’re aware (as these people all are) that the odds are stacked against you, then why do you play?

I raised this question on Facebook recently and got some insightful replies. One economist pointed out that money is different from utility (i.e., happiness, or well-being), and that it’s perfectly legitimate to get disproportionately more utility out of a jackpot win than you lose from buying a ticket.

So for example, let’s say a ticket costs $1 and gives you a 1 in 10 million chance of winning $8 million. Then the expected monetary value of the ticket equals $8 million/ 10 million – $1 = negative $0.20. But what if you get 15 million units of utility (utils) from $8 million, and you only sacrifice one util from losing $1? In that case, the expected utility value of the ticket equals 15 million utils / 10 million – 1 util = 0.5 utils. Which means buying the ticket is a smart move, because it’ll increase your utility.

I’m sympathetic to that argument in theory — it’s true that we shouldn’t assume that there’s a one-to-one relationship between utility and money, and that someone could hypothetically have a utility curve that makes it a good deal for them to play the lottery. But in practice, the relationship between money and utility tends to be disproportionate in the opposite direction from the example above, in that the more dollars you have, the less utility you get out of each additional dollar. So the $8 million you would gain if you won the lottery will probably give you less than 8 million times as much utility as the $1 that you’re considering spending on the ticket. Which would make the ticket a bad purchase even in terms of expected utility, not just in terms of expected money.

Setting that theoretical argument aside, the most common actual response I get from smart people who play the lottery is that they’re buying a fantasy aid. Purchasing the ticket allows them to daydream about what it would be like to win $8 million, and the experience of daydreaming itself gives them enough utility to make up for the expected monetary loss. “Why can’t you just daydream without paying the $1?” I always ask. “Because it’s not as satisfying if I know that I have no chance of winning,” they reply.  Essentially, they don’t care how small their chance of winning is, they just need to know that they have some non-zero chance at the jackpot in order to be able to daydream about it.

I used to accept that argument. But in talking with my friend yesterday, it occurred to me that it’s not true that your chances of winning a fortune are zero without a lottery ticket. For example, you could suddenly discover that you have a long-lost wealthy aunt who died and bequeathed her mansion to you. Or you could find a diamond ring in the gutter. Or, for that matter, you could find a winning lottery ticket in the gutter. The probability of any of these events happening isn’t very high, of course, but it is non-zero.

So you simply can’t say that the lottery ticket is worth the money because it increases your chances of becoming rich from zero to non-zero. All it’s really doing is increasing your chances of becoming rich from extremely tiny to very tiny. And if all you need to enable your Scrooge McDuck daydreams is the knowledge that they have a non-zero chance of coming true, then you can keep those daydreams and your ticket money too.

Does “socially responsible” investing do any good?

In this video, I’m discussing “socially responsible” investing with the mathematician from http://askamathematician.com. If you limit your investments to companies that uphold ethical principles you care about — for example, environmental protection, human rights, diversity, etc. — how much of an impact does your investment decision have?

Funding for which arts?

Jesse’s recent post, about how words like “art” don’t have universally agreed-upon, precisely-defined meanings, reminded me of a book I just read by one of my favorite bloggers, economist Tyler Cowen at Marginal Revolution. He’s gotten a lot of media and internet attention in the past couple of months for his e-book The Great Stagnation, but the one I’m referring to is an older volume called Good and Plenty: The Creative Successes of American Arts Funding.

Good and Plenty makes the case that although the U.S. government ostensibly spends little on arts funding, compared to Europe for example, we also have huge de facto, indirect subsidies of art through copyright law and tax policies that encourage private giving. Those indirect subsidies are actually much more conducive to a thriving arts sector than Europe’s centralized funding, Cowen argues.

One of the many things I like about Cowen is his cheeky but serious way of challenging the ostensible reasons people have for their beliefs, or societies have for their institutions or laws. (This is something his friend and colleague Robin Hanson does even more persistently, by the way, over at another of my favorite blogs, Overcoming Bias.) The form of the argument is basically: You claim that the reason you do Y is because of X. But if you really believed X were the case, you would also do Z, which you don’t.

So in addition to the question of how we fund art, Cowen also asks why we’ve chosen to define “art” (for funding purposes, at least) to include certain things but not others. For example:

  • What about fashion? Clothing design exhibits beauty and creativity just like sculpture, and a beautiful piece of clothing arguably has higher positive externalities than a beautiful sculpture (because the owner wears it in public, other people get to appreciate its beauty, unlike a privately owned sculpture which sits at home).
  • What about sports? Many sports showcase stunning displays of grace and power, just like dance. And sports games, and seasons, have a lot in common with drama: protagonists, antagonists, triumph and defeat. “The drama in sports, of course, is real rather than staged, but presumably this should contribute to its aesthetic merit,” Cowen says.
  • What about toys? “Most young children are deeply concerned with matters aesthetic,” Cowen says. “They are fascinated by colors, shapes, sounds, and textures… The toy presents the child with an aesthetic package, so to speak, which the child either loves or rejects. When children they love a toy, they are truly passionate about enjoying its aesthetic qualities.”

Yet our government doesn’t subsidize fashion, or toys, or sports (at least not for artistic reasons; local governments may fund stadiums and so on , but that’s for other reasons, like economic development). So that would seem to cast doubt on the reason people generally give to justify funding the arts — that they provide people with enjoyable and moving aesthetic experiences — since those reasons should also suffice to justify subsidizing things like sports and fashion and toys, which we don’t.

Of course, the big differences between the traditional arts and Cowen’s examples are that the former have (1) more cachet, historically, and (2) less commercial viability. But we still have to explain why we should spend the money to prop up the traditional arts when there are other sources of aesthetic enjoyment that don’t require any propping.

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