People often claim I am selfish because I have strong preferences for individual spending. I don't like tit-for-tat spending on rounds of drinks at a bar, or appetizers before a meal. I don't like the incentives it gives me, and I don't like the incentives it gives other people. I understand and am in favor of paying for national defense, police, and even healthcare for other people, I'm all for taxes for public goods. But how this extends to the repeated game of buying drinks at a bar or saying I got this one, you get the next one I don't know. If I go out with a bunch of friends I end up spending a lot more money than I would if we all just paid for our own stuff. This is not because I am paying more of a share than others, it's just that my consumption is increased to a point where marginal cost is higher than marginal benefit.
People claim they buy rounds, or bring something to share because they are altruistic, which I say is not correct. It's arguable whether even giving money anonymously to a charity is altruistic, but I think that depends on semantics. But buying drinks or something to share is all about increasing one's own reputation. I'm not claiming this is what goes through everyone's head when they decide to do it, but it is the base reason why it is a part of social norms and possibly part of human nature. If you are really altruistic, just give me a cash transfer and I'll use it on what I get the most utility from which given your altruism will also give you the most utility. If, instead, you are interested in your own reputation, make a public display of generosity.
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Can you go into more detail about why the incentives are off?
ReplyDeleteWhen people are buying rounds, I often end up spending less than I would otherwise, since I'm cheap. (E.g., Friday night I partook in a round but never returned the favor.)
A related argument can be made for cute girls benefiting from rounds, especially when it's a larger round for four or more people.
You suggest that altruism carries no utility. I disagree. Altruism has at least two positive affects - reputation boost AND it just feels good.
When I'm going out with partners or something then yes I spend less, but when going out with my friends on the same level as me, we generally all spend our fair shares, but I definitely spend more than I would otherwise.
ReplyDeleteAnd I am not saying "altruism" has no utility. I'm saying it's not really altruism if it is done to boost reputation and make yourself feel good.
Then what do you consider altruism? Doing something to benefit someone else and not feeing anything good for it in anyway? This reminds me of the episode of Friends where Phoebe and Joey argue about this and Phoebe lets a bee sting her as act of altruism (so the bee can look tough in front of the other bees). But Joey asks if she felt good about herself for it and she does and Joey says it doesn't count. Also, the bee probably died.
ReplyDelete