Tag Archives: incentives

Avoiding an animal on the road

When a bike or car heads towards a squirrel, the squirrel first dodges to one side and then runs away in the other direction. Birds fly directly away from the oncoming vehicle, so stay in front of the vehicle for a few seconds. These behaviours are presumably evolutionary adaptations to avoid predators. For example, the squirrel’s dodge probably misleads a predator to alter course in the direction of the dodge. The larger predator then has more difficulty than a small agile squirrel in switching direction to the opposite side of the dodge.
In avoiding vehicles, these escape patterns are counterproductive. A predator tries to collide with the prey, but a vehicle tries to avoid collision. A squirrel’s dodge confuses the driver or cyclist, who then tries to pass the animal on the opposite side of the initial feint, which is exactly the direction the animal ends up running in. The best way to avoid collision may be to just keep going in a straight line and let the animal dodge out of the way. A constant direction and speed is easy to predict, which lets the animal avoid being in the same place at the same time as the vehicle. Keeping one’s course and speed also avoids accident-prone sharp turns and sudden stopping.
If a predator was smart and knew about the dodging behaviour, then it would go opposite the initial dodge. But then the squirrel would benefit from not switching direction. In response to the squirrel just running in one direction, the predator should run in the direction of the squirrel’s initial movement, etc. This game only has a mixed strategy equilibrium where the squirrel randomises its direction and whether it dodges or not, and the predator randomises its response to the squirrel’s initial movement direction. Dodging takes more energy than just running to one side, so the dodge must have a benefit that outweighs the energy cost, which means that the predator must be less successful when the squirrel dodges. Some factor must make it difficult for the predator to swerve opposite the squirrel’s initial direction. For example, if most prey keep running in one direction instead of feinting, then the predator may be on average more successful when following the initial movement of the prey. The cognitive cost of distinguishing squirrels from other prey must be too large to develop a different strategy for chasing squirrels.
The same game describes dribbling in soccer to avoid a defender. It would be interesting to look at data on what proportion of the time the attacker feints to one side and then moves to the other, as opposed to just trying to pass around the defender in the initial movement direction. It is more difficult for both players to switch than to keep moving in one direction, but presumably the player with the ball finds it relatively more complicated than the defender. In this case, to keep the other player indifferent, each player only has to switch direction less than half of the time, but the defender relatively less frequently. If the attacker feints and the defender does not switch direction, then the defender looks clumsy and the attacker a good dribbler. Reputation concerns of soccer players (who are after all entertainers) may make them switch direction more often than a pure winning motive would dictate.
Similarly, soccer players may use flashy moves like scissor kicks more often than is optimal for winning, because the flashiness makes the player popular with fans.

Neighbourhood coordinating to keep houses small and prices high

If apartment buildings are built in a neighbourhood of detached houses, then the house prices fall, especially next to the new apartment buildings. There is less privacy in the garden if many windows overlook it, and there is more congestion and crime if more people live nearby. The neighbourhood’s common interest may be to block the development of large buildings in it. However, an individual homeowner finds it profitable to sell to a property developer who will replace the detached house with a large apartment building, because the cost of reduced house prices is borne by the neighbours, not by the seller.
One way that neighbourhoods try to prevent this tragedy of the commons is to require all homeowners to join an association and agree to be bound by the rule that the association can prohibit new buildings or expansions. Such rule-based solutions are usually vulnerable to legal loopholes and changes in government policy that invalidate the restrictions. Game theory offers a solution without requiring any external enforcement: if one homeowner extends her house or replaces it with a bigger building, or sells to someone who will, then the neighbours respond by building apartment buildings around the property of the first breaker of the social norm of non-expansion. Then the view from the first expanded building is only the walls of the others, which makes the expansion unprofitable and deters enlargement in the first place.
The punishment for the first extension has to be certain enough to deter it. In particular, the homeowners next to the violator of the norm must be incentivised to build even at a loss. This incentive can be provided by requiring the neighbours of the homeowners next to the violator to punish those who do not punish the violator. This punishment can again be the development of large buildings next to their property. Those who refuse to punish the non-punishers can be punished the same way, etc, in concentric circles around the original violator.
The incentives provided by dynamic games such as this one may seem strange, but can be easily coordinated by a homeowners’ association without any legal power. The association simply publishes the rule that (a) enlargement of current buildings or the construction of new ones is forbidden and (b) if someone breaks the rule, then any new construction in a specified radius around the first rule-breaker is allowed. If one enlargement or new building is profitable, then typically a few extensions next to it are also profitable. The fewer neighbours of the first rule-breaker that build bigger houses as punishment, the more profitable an extension is for any neighbour. So some neighbours will punish the first violator. This will make the house prices of other neighbours fall, which reduces the cost to them of selling their houses to property developers for apartment building construction, i.e. reduces the cost of punishing the original rule-breaker.

Buildings replaced quickly, so built badly

In a fast-growing city, many buildings will be replaced by larger ones in a decade or two. Property developers probably take this into account, thus do not hesitate to build low-quality non-durable housing. If the city growth stops at some point and buildings are no longer quickly replaced, then the owners of such housing will get an unpleasant surprise.
People buying or building detached houses do not seem to take city growth into account, because at least in Canberra, I see the erection of large expensive mansions in districts where the house will in 20-30 years be surrounded by high apartment buildings. Tall structures around a mansion tend to reduce its value, and certainly make the garden less private. The investment in fancy gardens, backyard swimming pools, etc, seems a bit short-sighted in locations close to the centre of a growing city.
The mansions also fill most of the plot of land on which they stand, so from an energy efficiency point of view, they might as well join walls with neighbours, as I have written before.

Spam call deterrence

Time-wasting marketing calls to my cellphone are a bit of a problem. I have developed the habit of checking any new number against online spam call reporting websites, and if the number turns out to be a spammer, then saving it under “Spam call” in my phone. Then in the future, any call from the same number shows up on the phone as Spam call. There are probably apps for blocking numbers, but as an economist, I would prefer a tax to a ban. I would like to make callers pay me for calling me, to compensate for my time spent answering or blocking, and also to deter spam calls. In principle, charging a fee for receiving a call is possible, because there are already 1-800 numbers and others that are pricier to call than an ordinary phone.
If it was costlier to call me than most numbers, then I would refund the extra calling fee to my friends and other legitimate callers, so they would not be deterred from calling me. This is easy, because I can see the list of calls, their durations and numbers online, so can calculate how much extra each caller paid to call me. Spammers of course would not get a refund.

Gender equity either on paper or by forcing people to change research fields

Suppose that a university employs roughly equal numbers of men and women overall, but the proportions of the genders differ across research fields, or across research and administration, and the university wants gender equality within each subfield. Using the narrowest definition of a research field, each field has either one or zero people, so in the smallest fields, gender equality is impossible. From now on, the focus is on fields or administrative units that have at least two people.
Gender equity can be achieved on paper by redrawing the administrative boundaries or redefining research fields. A simple algorithm (not the only possible algorithm) is to form pairs of one male and one female employee and call each such pair an administrative unit. Larger units can be formed by adding many male-female pairs together. If the numbers of men and women are not exactly equal, then some single-gender pairs will be left over, but most administrative units will have perfect gender equality.
The same idea can be used less radically by reassigning people who do interdisciplinary work and could plausibly belong to multiple research fields. Each person who is „between” fields gets assigned to the field that has a smaller fraction of that person’s gender. This increases gender equality in both the field that the person joins and the field that the person left. The field with a bigger surplus of that person’s gender loses one of that gender, and the field with a smaller surplus gains one.
Other than reassigning people or redrawing administrative boundaries, gender equity requires inducing people to change their research fields. To some of my colleagues, directing researchers to change their area is ideologically unacceptable. However, if equity is the goal and people’s field change is necessary to achieve it, then several methods can be used. The inducements can be softer or harder. A hard inducement is a hiring policy (and job ads) that restrict hiring to only one gender. The same can be done with promotion and retention. If this policy was explicitly stated to everyone, then it would become more effective, and also more acceptable to people than when they are surprised with it upon applying for promotion.
Soft inducements consist of hints that one gender is preferred, which are usually stated in political doublespeak like „we are committed to equity” or „we are an equal opportunity employer”. If many more candidates of one gender apply, then giving all candidates an equal opportunity of getting hired does not result in equal proportions of men and women employed. I am in favour of clear guidelines and transparency, for example of explicitly stating in job ads and promotion policies that the underrepresented gender is preferred, and which gender is currently underrepresented. Clearly telling people that switching fields is good for their career is likely to have a bigger effect than the currently used hints.
It may be easier to shift the research areas of people who are earlier in their careers. Encouraging more young people of a given gender to go to an area where their gender is underrepresented is one way of inducing them to change their field (relative to their preference).
Current equity policies are focussing almost exclusively on the inflow of employees. Gender balance can also be improved by managing the outflow, for example by offering early retirement schemes to one gender, or expanding these to a wider age range for one gender. If there are gender differences in the propensity of accepting certain inducements to leave, then the same inducements can be offered to both genders (seemingly gender-neutrally), with the desired result that one gender exits more.

Keeping journals honest about response times

Academic journals in economics commonly take 3-6 months after manuscript submission to send the first response (reject, accept or revise) to the author. The variance of this response time is large both within and across journals. Authors prefer to receive quick responses, even if these are rejections, because then the article can be submitted to the next journal sooner. The quicker an article gets published, the sooner the author can use it to get a raise, a grant or tenure. This creates an incentive for authors to preferentially submit to journals with short response times.
If more articles are submitted to a journal, then the journal has a larger pool of research to select from. If the selection is positively correlated with article quality, then a journal with a larger pool to select from publishes on average higher quality articles. Higher quality raises the prestige of a journal’s editors. So there is an incentive for a journal to claim to have short response times to attract authors. On the other hand, procrastination of the referees and the editors tends to lengthen the actual response times. Many journals publish statistics about their response times on their website, but currently nothing guarantees the journals’ honesty. There are well-known tricks (other than outright lying) to shorten the reported response time, for example considering an article submitted only when it is assigned to an editor, and counting the response time from that point. Assigning to an editor can take over two weeks in my experience.
To keep journals honest, authors who have submitted to a journal should be able to check whether their papers have been correctly included in the statistics. Some authors may be reluctant to have their name and paper title associated with a rejection from a journal. A rejection may be inferred from a paper being included in the submission statistics, but not being published after a few years. A way around this is to report the response time for each manuscript number. Each submission to a journal is already assigned a unique identifier (manuscript number), which does not contain any identifying details of the author. The submitter of a paper is informed of its manuscript number, so can check whether the response time publicly reported for that manuscript number is correct.
Currently, authors can make public claims about the response time they encountered (e.g. on https://www.econjobrumors.com/journals.php), but these claims are hard to check. An author wanting to harm a journal may claim a very long response time. If the authors’ reported response times are mostly truthful, then these provide information about a journal’s actual response time. Symmetrically, if the journals’ reported response times are accurate, then an author’s truthfulness can be statistically tested, with the power of the test depending on the number of articles for which the author reports the response time.

Incentivising refereeing

To shorten the refereeing lag and improve report quality in economics, the natural solution is to incentivise academics to do a better and quicker job. Economists respond to incentives, but currently no salary or promotion consequences arise from good or bad refereeing, as far as I know. In http://sanderheinsalu.com/ajaveeb/?p=503, I wrote about incentives for authors not to submit careless papers (in the hope that a refereeing mistake gets them accepted). One such incentive is requiring refereeing for a journal as a precondition for submitting to that journal. If a submitted paper gets n referee reports on average, then before submitting, an author should referee n papers in a timely manner, which should balance the supply and demand of refereeing. This forced refereeing may lead to quick, but sloppy reports.

An additional incentive is needed for quality. Rahman’s 2010 paper on the question „who watches the watchmen” suggests an answer. The editor can insert a deliberate mistake in every paper and see whether a referee finds it. If not, then the refereeing of that person is likely of low quality. The mistake is corrected before publication. Alternatively, the editor can ask each author to insert a mistake and tell the editor about it. The author is not penalised for this mistake and is asked to correct it if the paper is accepted. The referees are again judged on whether they find the mistake.

The above scheme derives refereeing incentives from publication incentives, requiring minimal change to the current system. However, it is somewhat indirect. A more straightforward incentive for refereeing is to reward it directly, either paying for it or basing promotion decisions partly on it. The speed of refereeing is already slightly monetarily incentivised in the American Economic Journal: Microeconomics. If the referee sends the report before a deadline, then she or he is paid 100 dollars. If a good referee report takes about 10 hours, then the amount is certainly not enough to motivate quality provision, but it is a step in one of the right directions. A simple improvement on the binary „before vs after deadline” reward scheme is to reduce the payment gradually as the delay of the referee report increases.

If refereeing is incentivised, then lower-ranked journals need larger incentives to compensate for the fact that refereeing for these has less inherent prestige and the paper one has to read is of lower quality. On the other hand, lower-ranked journals are less able to motivate refereeing with the threat of not accepting submissions from those who have not refereed. There are more lower-ranked journals, and it is less important to get accepted by any particular one of them. Some of the less prestigious journals would find no referees under the system proposed above. This is good, because it removes the „peer reviewed” status of some junk journals and may force them to close. If authors know that quality journals require refereeing before submission, then they draw the obvious conclusion about a journal that does not require it.

On military bravery

All countries and armed groups emphasize the bravery of their soldiers for propaganda purposes. Such claims are made regardless of whether there is any actual valour. Going to a dangerous situation or even certain death is not necessarily courageous, in particular if there is no knowledge of the danger or no choice. Are sheep going into a slaughterhouse brave? They are calmly walking to certain death, after all. But usually this is not ascribed to courage, but to ignorance. Analogously, soldiers used in early tests of the physiological effects of radiation exposure who were marched through an area of a recent nuclear explosion are not considered brave. They did not know the cancer risk.

If there is no choice, which usually means there are only perilous choices, then putting oneself in danger is not usually accounted brave. Jumping out of a burning building offers a higher probability of survival, so people do it despite the substantial risk of falling to death. When a sufferer of a painful terminal disease chooses euthanasia, this early death is commonly not considered brave. Some cultures even believe suicide to be a sign of cowardice. If a military has a well organized system for catching deserters and administering the death penalty to them (and their family in some regimes), then a soldier charging enemy machineguns is merely maximizing his survival probability. The enemy might miss, the firing squad rarely does.

The greater the probability of victory for one’s own side, the less attractive desertion becomes, because being caught is more likely. This explains the propaganda emphasis on own victories and the punishment of “defeatist talk” in wartime. The greater the military advantage of a party in an armed conflict, the less bravery its soldiers need.

Genuine bravery exists, but it is rare. Evolution favours cowardly bullies who attack the weaker (prey) and run from the stronger (predators). People who face no compulsion to fight in a war and know the dangers, yet still join, are brave. Freedom fighters (insurgents from the other side’s viewpoint) against a dictator qualify. With the caveat that only joining the fight initially requires bravery – after that, losing would mean being tortured to death by the dictator, so continuing the war is the safer option. Similarly, volunteering for the military requires some bravery (the more the greater the likelihood of being sent into danger), but once military law applies, desertion is usually more dangerous than the duty.

Military courage is proved for those who start the war as a weaker side against a stronger, if a continuing peace is not a slow death. Peasant revolts were often driven by hunger, meaning the participants may have perceived the probability of death from starvation as higher than the probability of being killed by the aristocrats.

People who have never faced an informed choice between a safe and a dangerous option may be “latently brave”, in the sense that given such a choice, they may exhibit courage. They are not proved brave, however, until they have made the choice. There are likely to be some latently brave people in the world’s militaries and armed groups. Probably a greater percentage than among the general population.

There are some proven brave folks even in the militaries of powerful countries, but the proof requires knowingly choosing a dangerous option when there is no future punishment for cowardice. For example, when nobody would know of the choice.

A topical question is whether suicide terrorists and other fighting religious fanatics are brave. Their behaviour may be driven by the fear of punishment either in the afterlife or by their fellow fanatics. It may also be due to ignorance – believing in an afterlife is like believing that one cannot really die and thus the danger is not real. In both cases, no courage is required for choosing death.

The belief in the impossibility of dying may even be literal – W.E.B. Griffin had a story of a witch doctor convincing the fighters of his tribe that his magic had made them immune to bullets. Great was the fighters’ surprise later… Their charge with spears against guns was not due to bravery, however.

Organ trade restrictions

Trade in human body parts is mostly forbidden, although donations without compensation or for “coverage of reasonable costs” are allowed. One reason is that trade creates the incentive for criminals to harvest organs against people’s will. In the worst case, a young and healthy person is killed to get all their marketable body parts. Another problem is that stupid people may sell their organs voluntarily and later regret it.

The dangers differ depending on how damaging the removal of the organ is. Trade in hearts encourages killing more than trade in donor blood, although even for blood a victim can be drained completely if the price is high enough. For criminals, the complexity of organ removal and how fast it needs to be delivered to the recipient also matter. It would make sense for the restrictions and punishments to correspond to the danger of organ robbery and the associated damage.

The one tissue type currently transferred between people for which organ robbery and overdonation seem nonissues is sperm. Forcing someone to donate against their will is possible, but causes no permanent damage (in my medically ignorant opinion). Too frequent donations lower the quality (number of cells per unit of volume) in a detectable way, which would make most robbed sperm unmarketable. Yet payment for donor sperm is still forbidden in Australia (Human Tissue Act 1982) and many other countries. This may be a knee-jerk extension of the laws against trade in human organs, or there may be some reason I have missed.

Publication delay provides incentives

From submitting a paper to a journal until getting the first referee reports takes about six months in economics. It is very rare to get accepted on the first try. Most papers are rejected, and an immediate acceptance implies having submitted to too weak a journal. Waiting for the referee reports on the revision and second revision takes another six plus a few months. This seems unnecessary (reading a paper does not take six months) and inefficient (creates delay in disseminating research results), but is used for incentives.
Delay discourages frivolous submissions. It forces authors to evaluate their own work with some honesty. If the referee reports were immediate, then everyone would start at the top journal and work their way down through every venue of publication until getting accepted. This would create a large refereeing and editing burden. Delay is a cost for the authors, because simultaneous submissions to multiple journals are not allowed. Trying for high-ranking journals is a risk, because the author may not have anything to show at the next evaluation. This reduces submissions to top journals. It may be optimal to start at the middle of the ranking where the chances of acceptance are higher.
A similar incentive to submit to the correct quality level of journal can be created by imposing a submission fee, forbidding further submissions for a period of time if rejected or requiring the author to write referee reports on others’ papers. A submission fee should be distinguished from publication fees, which are used at fake journals. The submission fee is paid no matter whether the paper is accepted, therefore does not create the incentive for the journal to lower its standards and publish more papers.
The submission fee would impose different costs on authors in different financial circumstances. Some have research funds to pay the fee, some do not. Similarly, delay has a larger effect on people whose evaluation is coming sooner. Being banned from a journal for a given amount of time after a rejection is worse for a researcher working in a single field. Interdisciplinary folk have a wider variety of venues to publish in. Writing referee reports as a price of having one’s work evaluated may lead to sloppy reviewing. Any mechanism to induce self-selection has a cost. Yet self-selection is needed.