Category: Behavioral Law and Economics

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Xoxohth 1.2: The Whys and Wherefores

[This is Part I, Section 2, of the project I announced here. (Part 1.1 is here.) The goal of today's installment is to present a diversity of views on why people spend time on Xoxohth, drawing largely on the voices of posters themselves.]

inkblot.cgiI’ll start by acknowledging an uncomfortable fact. This project suggests, and perhaps even reinforces, that critique of academic life often bandied about by the popular press: I’m asking a minor question, focusing on the uninteresting choices of marginal members of society, and using a methodology of debatable validity.

I felt bad about this for a while. And then I realized that the next best use of my time is grading: a similar process, but with higher perceived stakes.

Forward. The issue for today is why people continue to spend substantial amounts of time on XO. The question arises from the obvious point that students and lawyers have many ways to spend their time. Most of those ways are unlikely to lead to professional embarrassment if publicized, and may even enable individuals to build reputations for probity and acuity. It is odd, then, that hundreds or thousands of students and lawyers devote significant chunks of their free time to talking anonymously on XO. What gives?

It seems to me that there are a few motivations in play: entertainment, a search for information, the need for community, and the pleasures of transgression. Before we begin, let’s get some reader input. What motivation do you think drives XO’s traffic?

Why Do People Spend Time on XO?
The Community
The Transgression!
Information (Giving and Getting)
Entertainment
Other
  
Free polls from Pollhost.com

Now that we’re done with the scientific polling, let’s look at the qualitative data.

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Trans-Fat Ban: Is there a Softer Paternalism Available?

It looks like the New York Board of Health has voted to ban trans-fats. For all our readers wary of such legal interventions, I offer the view of G.K. Chesterton on cognate controversies:

[Y]ou do not keep a little boy from throwing stones by preventing him from ever seeing stones. You do not do it by locking up all the stones in the Geological Museum, and only issuing tickets of admission to adults. You do not do it by trying to pick up all the pebbles on the beach, for fear he should practise throwing them into the sea. You do not even adopt so obvious and even pressing a social reform as forbidding roads to be made of anything but asphalt, or directing that all gardens shall be made on clay and none on gravel. You neglect all these great opportunities opening before you; you neglect all these inspiring vistas of social science and enlightenment. When you want to prevent a child from throwing stones, you fall back on the stalest and most sentimental and even most superstitious methods. You do it by trying to preserve some reasonable authority and influence over the child.

But if that all sounds a bit too Dobsonian to you, there’s always soft paternalism. According to Jim Holt,

[S]oft paternalism says, You know what’s best for you, and we’ll help you to do it. Here’s an example. In some states with casino gambling, like Missouri and Michigan, compulsive gamblers have the option of putting their names on a blacklist, or “self-exclusion” list, that bars them from casinos. Once on the list, they are banned for life.

Anyone want to propose a precommitment strategy for avoiding the sirens of fast food?

From the New Property to the New Responsibility

apple small.jpgJust as Charles Reich was a premier theorist of rights to government largesse, Peter Schuck and Richard Zeckhauser are leading exponents of the responsibilities it entails. In Targeting Social Programs, S&Z focus on the denial of benefits to “bad bets” and “bad apples:”

Bad bets are individuals who are likely to benefit little from social resources relative to other [beneficiaries]. . . . Bad apples are individuals whose irresponsible, immoral, or illegal behavior in the past—and predictably, in the future as well—marks them as unsuitable to receive the benefits of social programs.

This may sound a bit cold-hearted at first, but S&Z make a good case that, behind a veil of ignorance, we’d quite sensibly allocate resources to, say, the transplant recipient who is most likely to benefit, rather than the one who has been on the wait list the longest. They also show how often “bad apples’” worst effects are on the disadvantaged citizens near them. (For an example, see Kahan and Meares on anti-loitering ordinances.)

The West Virginia Medicaid program provides an interesting case study of “bad apple screening.” Consider the fate of one beneficiary who refuses to sign a “health responsibility contract:”

Mr. Johnson. . . goes to a clinic once a month for diabetes checkups. Taxpayers foot the bill through Medicaid . . . [b]ut when doctors urged him to mind his diet, “I told them I eat what I want to eat and the hell with them. . . . I’ve been smoking for 50 years — why should I stop now? . . . This is supposed to be a free world.”

Traditionally, there was little Medicaid could do to encourage compliance. But now, “[u]nder a reorganized schedule of aid, the state, hoping for savings over time, plans to reward “responsible” patients with significant extra benefits or — as critics describe it — punish those who do not join weight-loss or antismoking programs, or who miss too many appointments, by denying important services.” But as the article notes, “Somewhat incongruously, [Johnson] appears to be off the hook: as a disabled person he will be exempt under the rules.”

Critics claim the program is unduly intrusive: “What if everyone at a major corporation were told they would lose benefits if they didn’t lose weight or drink less?” asked one doctor. Certainly in some manifestations it could be; consider this 1997 proposal by Judge John Marshall Meisburg:

Congress should . . . consider legislation stipulating that no one can be granted disability by SSA if s/he continues to smoke against the advice of his physician, and smoking is a factor material to the disability, because such claimants are bringing illness and disability upon themselves. Such a law would reduce the burden of proof now needed to deny benefits to persons who fail to heed their doctors’ advice, and would dovetail with legislation just passed by Congress to abolish disability benefits for persons addicted to drug and alcohol. In many cases, smoking is akin to “contributory negligence” and the SSA law should recognize it as such. [From Federal Lawyer, 44-APR FEDRLAW 56 on Westlaw.]

I think S&Z frame the debate in a nuanced enough way to avoid this kind of draconian proposal. But I do have a few quibbles with the framing of their work, if not its substance.

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5

Rules? We Don’t Need Your Stinking Rules!

signs.jpgA very odd idea from Europe:

European traffic planners are dreaming of streets free of rules and directives. They want drivers and pedestrians to interact in a free and humane way, as brethren — by means of friendly gestures, nods of the head and eye contact, without the harassment of prohibitions, restrictions and warning signs.

Why? Because the law is so overgrown in the old country that it is (allegedly) ignored:

About 70 percent of traffic signs are ignored by drivers. What’s more, the glut of prohibitions is tantamount to treating the driver like a child and it also foments resentment. He may stop in front of the crosswalk, but that only makes him feel justified in preventing pedestrians from crossing the street on every other occasion. Every traffic light baits him with the promise of making it over the crossing while the light is still yellow . . . The new traffic model’s advocates believe the only way out of this vicious circle is to give drivers more liberty and encourage them to take responsibility for themselves. They demand streets like those during the Middle Ages, when horse-drawn chariots, handcarts and people scurried about in a completely unregulated fashion. The new model’s proponents envision today’s drivers and pedestrians blending into a colorful and peaceful traffic stream.

Ok, I get the concept, and I do think that the proliferation of law results in an enforcement loss on the margins. But there are two conditions to this experiment’s success.

First, it isn’t scalable. In absolute terms, big cities seem to me to be vastly harder to de-sign than small cities: the temptation to defect is higher; the benefits of cooperation diffuse; and the social sanctions easy to avoid. Similarly, homogenous and nondiverse populations like those that still dominate parts of Europe probably need less law than heterogeneous ones – a straightforward Shasta County idea.

Second, you still need private (tort) law. Even when the stop sign gets carted away, a reasonable duty of care remains. Further, that law has to be relatively well-appreciated to be effective. Therefore, the designers of the experiment must be sort of suggesting that we can remove law’s signs because the rules have been completely internalized.

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The Athenian Model

redrope.gifThe USA Today reports that shirking jury duty is an worsening problem. In response, local registrars are becoming punitive:

Tulare jury candidates who fail to show are warned that they could be found in contempt of court. If they do not respond, a second letter is sent, warning that a warrant will be issued for their arrest . . .

In Danville, Ill., a 19-year-old woman was found in contempt of court and sentenced to 14 days in jail for failing to appear for jury duty.

In Topeka, no-shows have been fined up to $100 a day.

In Grand Rapids, Mich., warrants were issued recently for the arrests of 56 people who failed to go to court and explain why they couldn’t serve.

It’s a trend. A foolish one. Why are folks always reaching for sticks, when there are carrots near to hand?

Seriously, jailing citizens for failing to be civic minded is, I think, a bad way of encouraging compliance. Why not try shaming, as the Athenians did with their famous red rope?

But, backwards.

Jurors ought to be given a public reward that will encourage norms of civic engagement. Like, say, a bumper sticker (“I love my state so I served on a jury.”), a t-shirt (“I’m not too sexy for jury service”), a newspaper advertisement (“Pennsylvania salutes its jurors . . . “), or a red ribbon. Such small rewards will have the incidental positive effect of making people happier with the experience itself. Jail time, by contrast, will only reduce civic support for the jury system, and will be unlikely to be enforced at levels sufficient to really deter shirking. And, tangible rewards are better than the empty rhetoric that currently marks the legal system’s approach to the reward-punishment problem:

“Conscientious service brings its own reward in the personal satisfaction that an important task has been well done. The effectiveness of our system of justice is measured by the integrity and dedication of the jurors who serve in our courts.”

3

Soft Paternalism in the Supermarket Aisle

Very interesting. A grocery chain in New England has decided to reverse puff its products:

The chain, Hannaford Brothers, developed a system called Guiding Stars that rated the nutritional value of nearly all the food and drinks at its stores from zero to three stars. Of the 27,000 products that were plugged into Hannaford’s formula, 77 percent received no stars, including many, if not most, of the processed foods that advertise themselves as good for you.

I imagine that the chain thinks that it will sell more by encouraging a certain type of shopper (willing to trade money for virtue). It also is trying to fill an enforcement gap that currently bedevils certain academics:

The F.D.A., for its part, points to its specific requirements for foods that make health claims as well as their labels. It also acknowledges that its policing abilities go only so far.

“The thing is, a lot of claims we see out there are puffery,” said Joseph R. Baca, director of the office of compliance at the F.D.A.’s Center for Food Safety and Applied Nutrition. “But they don’t get to the point where we can call them fake or misleading.”

Although Hannaford’s star ratings are posted on the same shelf tags that display prices, the chain has not changed the way it shelves products or markets them. This may have kept food manufacturers from rebelling, but it has not stopped them from questioning whether Hannaford is qualified to be the arbiter of healthiness.

“You end up with a lot of consumer confusion,” said Mr. Faulkner of Campbell Soup, which makes V8 as well as Healthy Request. “Do you defer to the Hannaford Brothers? The federal government?”

Faulkner has a point, of sorts. Hannaford is trying to patent its (opaque) ranking methodology, which suggests that it believes it can be exploited for commercial gain.

3

Pay the Poor to Be Citizens

money.jpgA colleague suggests that there might be a relationship between a series of seemingly random observations:

  • A sudanese cell-phone billionaire announced a prize for good governance, to be awarded to current African leaders when they step down from office. According to news reports, “each leader awarded the prize will receive $5 million spread over 10 years after leaving office. If still alive when the initial prize is exhausted, prize-winners will receive another $200,000 annually until they die.”
  • The Arizona Voter Reward Act, which would establish a $1,000,000 prize whose proceeds would go to a randomly-selected voter, is on November 7th’s ballot. The state’s Chamber of Commerce is opposed: Harvard’s Info/Law project is more open minded. Most think the law would be plainly illegal preempted by federal law even if passed.
  • Jury pay rates are embarassingly low, if meant to be compensatory. Some jurisdictions are funding pilot projects to study if pay raises will increase compliance with jury service.

Here is the question for debate: is there any meaningful way to distinguish the African prize (which many legal commentators no doubt would celebrate) from the voting and jury service problems? Or, more provocatively, are the powerful the only people who we will allow to make money from being good citizens?

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Net Neutrality: Law, Money, and Culture

dailyshow01.jpg

Bill Moyers enters the fray in the raging legal debate over net neutrality tonight, with a documentary on PBS. The Wu/Yoo debate on the topic gets the central issues on the table: should we permit dominant ISP’s (like Verizon and Comcast) to discriminate among the “bits” on their networks, giving more rapid service to preferred sites? I’ve offered some tentative thoughts on the matter, and these continue in that vein.

The net neutrality battle may offer us a classic efficiency-equity tradeoff. Imagine a world where everything on the internet came to you four times faster, but dominant ISP’s could cut deals with certain sites that made their content come 10 times faster. On many classic economic accounts, that would be Pareto-optimal–everyone’s better off. As some very smart people (like Philip Weiser) have claimed, that differential pricing could finally lead to revenue levels that would remedy the US’s unacceptably slow pace of getting people connected to broadband (and faster) networks.

But on the other hand, what about the competitive disadvantage of those unable to cut the deals? Compare this article reprinted in the Boston Pilot (the Boston Roman Catholic Archdiocese’s official paper) touting net neutrality and this piece from Brookings-AEI disparaging it as a form of “price control.” The economists just tend to miss the cultural importance of media consolidation. That’s what convinced me that the stakes are ultimately a “battle for mindshare” (to use Hannibal Travis’s evocative metaphor), and can’t be cast in simple economic terms.

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Law School Admissions Standards As Law

Harvard’s decision to end its early admission program was the big story early week. As President Bok explained, the university worried about the social consequences of its admissions process:

“Students from more sophisticated backgrounds and affluent high schools often apply early to increase their chances of admission, while minority students and students from rural areas, other countries, and high schools with fewer resources miss out . . . . Others who apply early and gain admission to the college of their choice have less reason to work hard at their studies during their final year of high school.”

Harvard’s decision got me to thinking about the relationship between admissions standards at high-prestige universities and legal rules.

Both legal rules and admissions standards are conduct shaping regulations. When you set admissions standards to select for trait behavior X, the prevalence of X in the applicant universe will increase. Such an increase will not be uniform, for the reasons that Bok gives, and there will be further distortions depending on individual (or mass) psychology. But there are reasons to believe that law school admissions address a particularly sophisticated and resource-rich audience, who are well suited to governance. Thus, law school admissions are ripe for evaluation as a form of law itself.

I thought about this after talking with a friend last night who told me about business schools’ strong emphasis on community service as a part of the application of a well-rounded applicant. This probably creates a class of business school students who are more likely to be civic-minded after graduation. But it also (and more simply) results in a great deal of public service by pre-MBA types in the world. The question is: why don’t law schools use the application process to improve the world too?

You might object: “this is paternalistic social engineering.” Yes, yes it is. But law schools, like HLS, already require onerous mandatory pro bono commitments during school. The problem with such programs is that the incentives are all wrong – toward clock management instead of results. But if you made pro bono service an important part of the admissions decision, and suggested that particularly effective public service would be highly weighted, then you’d set folks incentives well to achieve good. Elite schools might collude to create a list of potential law-related public work that candidates would be “well-advised” to perform in order to increase their chances of admission: volunteering for a public interest firm or tax law clinic; working for the PD or DA as a part-time investigator; assisting social security ALJs as a paralegal, etc.

To be clear, I don’t mean to say that admissions committees aren’t already considering public service. Surely, they are. But they aren’t communicating the idea that public service counts in a meaningful way. Check out HLS’ admissions FAQ, and note the silence on this point. The silence is shared by other top schools. The point is that law faculties (at least those I’ve seen) have traditionally seen the admissions committee as wearing a judicial, rather than legislative, hat. As a result, faculty might tend to think of admissions as a necessary chore accomplished by the folks who run the operations side of the school, instead of an extension of the pedagogical mission. [Update: Even the affirmative action debate, which is a policy choice effectuated through admissions, isn't intended to shape the conduct of pre-law students.] Perhaps its time to rethink that model.

4

Eating Away the iPOD Brand

ipod.jpgThe Guardian (UK) offers this gloomy report on the iPOD’s future:

Industry-watchers warn that the iPod could soon be regarded by teenage cynics as their ‘parents’ player’ because a mass-market product rarely equates with edgy fashionability . . . The Zandl Group, a New York-based trends forecaster which regularly interviews a panel of 3,000 consumers aged 25-35, recently picked up its first significant criticisms. ‘The iPod is far and away the most popular tech gadget with our panellists – however, for the first time we are hearing negative feedback about the iPod from some panellists,’ said the organisation’s spokeswoman, Carla Avruch. ‘Panellists cite that the batteries are not replaceable, so when they die the entire player must be replaced,’ she said. ‘We have heard from some conspiracy theorists that the batteries are made to die soon after the warranty ends.

‘Other complaints are that iTunes [Apple's online music store] is overpriced and the format is not easily transferred on to other players. In our ethnography interviews, some long-time iPod-users told us that they have stopped updating their iPods because it’s too much work, while other consumers who had bought iPods more recently had not even taken theirs out of the package to set it up.’

She added that the iPod is in danger of becoming a victim of its own success: ‘Some backlash is against the ubiquity of the iPod – everyone has those white headphones on the train.’. . . Wall Street is reportedly starting to worry that the bubble will burst.

Tomi Ahonen, a technology brand expert and author, said: ‘For the first time the iPod has had two consecutive falls after 17 quarters of growth. If I were the manager, I would be wanting my people to explain what is going on. The iPod is wilting away before our eyes.’ . . .

Ahonen, author of Communities Dominate Brands, predicted that in the long term the iPod will have only a narrow audience. ‘It will continue to dominate a niche at the top end: if you’re a musician or a DJ you’ll use it because it’s the best, like a photographer with his Nikon camera. But the average mobile phone user gets a new handset every 18 months, and a quarter of mobile phones sold this year will have an MP3 player. In the same way as camera phones have pushed cameras to one side, this is an automatic replacement.’

Interesting. I’ve previously written (see below) on the topic of the interaction between individual experiences with the device’s poor lifespan, optimism, and iPOD’s market share. I’ve suggested that Apple has erected brand- and network-based barriers to erosion of its sales. A notable piece of evidence in my favor: notwithstanding the “backlash” against the iPOD and the reported “wilting” of Apple’s brand, its share price has been on a strong run since mid-July.

Other Posts on the Topic of iPODs:

1. Christine Hurt, Apple, iPods, Network Effects & Interoperability

2. Frank Pasquale, Single-Payer Music Care?

3. Hoffman, Is Apple Exploiting Consumer Irrationality?

4. Hoffman, (Will) iPod (and Ford) Kill the Radio Star?

5. Josh Wright (at ToTM), Paternalism and the iPod, Part II: The Behavioral Economics of Apple?