Tag Archives: Gossip

Could risk aversion be from friend thresholds?

If you are going for a job that almost nobody is going to get, it’s worth trying to be unusual. Better that one in a hundred employers loves you and the rest hate you than all of them think you’re mediocre.

On the other hand, if you are going for a job that almost everybody who applies is going to get, best to be as close to normal as possible.

In general, if you expect to fall on the bad side of some important threshold, it’s good to increase your variance and maybe make it over. If you expect to fall on the good side, it’s good to decrease your variance and stay there. This is assuming you can change your variance without changing your mean too much.

This suggests people should be risk seeking sometimes, and risk averse other times, depending on where the closest or most important thresholds are for them.

Prospect theory and its collected evidence says that people are generally risk averse for gains, and risk seeking for losses. That is, if you offer them fifty dollars for sure or half a chance of a hundred, they’ll take the sure fifty. If you offer them minus fifty dollars for sure, or half a chance of minus one hundred, they’ll take the gamble. The proposed value function looks something like this:

The zero point is a ‘reference point’, usually thought to be something like expectations or the status quo. This means people feel differently about gaining fifty dollars vs. a fifty percent of one hundred, and being given one hundred then later offered minus fifty or a fifty percent chance of minus one hundred, even though these things are equivalent in payoffs.

Risk aversion in gains and risk seeking in losses is what you would expect if people were usually sitting right near an important threshold, regardless of how much they had gained or lost in the past. What important threshold might people always be sitting on top of, regardless of their movement?

One that occurs to me is their friends’ and acquaintances’ willingness to associate with them. Which I will explain in a minute.

Robin has suggested that people should have high variance when they are getting to know someone, to make it over the friend threshold. Then they should tone it down if they make it over, so they don’t fall back under again.

This was in terms of how much information a person should reveal. But suppose people take into account how successful your life is in deciding whether they want to associate with you. For a given friend’s admiration, you don’t have that much to gain by getting a promotion say, because you are already good enough to be their friend. You have more to lose by being downgraded in your career, because there is some chance they will lose interest in associating with you.

Depending on how good the friend is, the threshold will be some distance below you. But never above you, because I specified friends, not potential friends. This is relevant, because it is predominantly friends, not potential friends, who learn about details of your life. Because of this selection effect, most of the small chances you take run the risk of sending bad news to existing friends more than sending good news to potential friends.

If you think something is going to turn out well, you should be risk averse because there isn’t much to gain sending better news to existing friends, but there is a lot to lose from maybe sending bad news. If you think something is going to go a tiny bit badly, you still want to be risk averse, as long as you are a bit above the thresholds of all your acquaintances. But if you think it’s going to go more badly, a small chance of it not going badly at all might be more valuable than avoiding it going more badly.

This is less clear when things go badly, because the thresholds for each of your friends can be spread out in the space below you, so there might be quite a distance where losing twice as much loses you twice as many friends. But it is less clear that people are generally risk seeking in losses. They do buy insurance for instance. It’s also plausible that most of the thresholds are not far below you, if people try to associate with the best people who will have them.

Another feature of the prospect theory value function is that the loss region is steeper than the gain region. That also fits with the present theory, where mostly you just have things to lose.

In sum, people’s broad patterns of risk aversion according to prospect theory seem explicable in terms of  thresholds of association with a selection effect.

Can you think of a good way to test that?

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Gossip Hypocrisy

Classic gossip, … telling it entails several … basic motives. … It enables the gossiper “to do dirt to the person he is gossiping about.” It entails “sheer jolly prurience.” It presents the gossiper as “up to the moment, in the know.” By no means least, it reminds us that “part of the delight of gossip, after all, is, to use an old-fashioned word, its naughtiness.”…

“Talk is possible about the great issues and events and questions,” but let’s be honest about it, such talk quickly palls: “So much easier, so much more entertaining, to talk about the decaying marriage of an acquaintance, the extravagant pretensions of in-laws, the sexual braggadocio of a bachelor friend. Most gossip, or most of the best gossip, is about dubious if not downright reprehensible behavior. The best of it is about people with whom one has a direct acquaintance. Served with a dash of humor it can be awfully fine stuff. (more)

Step back and notice the basic puzzle: We are a very social species, and yet we think it illicit to talk about each other. Even when such talk helps to enforce our social norms. Yes we enjoy gossip, but we also accept that it is “naughty.” Well, not naughty enough to make illegal – that would be going “too far.”

Homo hypocritus pretends to support norms of good behavior, but happily coordinates with allies to evade such norms, just out of view of group enforcement. One standard norm is that our group sticks together, and doesn’t break into fighting subgroups. If you see someone violate a norm, you are supposed to accuse them in front of everyone. How are people supposed to defend themselves from accusations they can’t hear? Some of us shouldn’t conspire to take down others of us. But of course we do. Happily. And we don’t want law to stop us.

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Blackmail Enforces Law

A year ago, I pushed private bounty-based law enforcement:

For each type of crime, we’d set a bounty amount to be paid to anyone who successfully convinced a court that a particular in-custody person had committed that sort of crime. We’d have to decide what investigative powers to grant bounty hunters, what regulations to impose on them, and what plea-bargains to allow. We’d also have to set rules on when to detain suspects, and how to prevent double jeopardy. (Options below.) We might want especially solid anti-trust regulations.

Since I’ve talked about blackmail lately, I should mention that legalizing blackmail would create an especially cheap and flexible system of private law enforcement. If an associate of a criminal discovered evidence of their crime, this associate could via blackmail extract close to the cash equivalent of the punishment to the criminal. While this might modestly lower the level of punishment of a caught criminal, it should greatly increase the probability of punishment, leading to more expected punishment of crime. And relative to public police, blackmailers should have much lower costs to investigate crime and implement punishment.

The main academic complaints (e.g., here, here) against blackmail as private enforcement of law are complaints against the very idea of private enforcement of law. It would be just terrible, they say, if criminals got punished without everyone being officially informed. Law enforcers in general face temptations to obtain evidence illegally, and to treat the rich and poor differently, and they face possible violent retaliation from criminals – and we all just know, they say, that public police better deal with these problems. Some also fear that adding private enforcement onto an optimal public enforcement would create too much deterrence, not realizing that one could compensate by reducing public penalties and enforcement.

One unmentioned possible cost of blackmail is a weakening of the bonds that tie people together. You’ll be less open to people who could blackmail you. This is a cost of all law enforcement – you will, for example, be less open with someone who could testify against you in court. For this reason (supposedly), the law today privileges certain relationships, such as spouses, doctors, clergy, reporters, and researchers, against having to testify in court. Reasoning similarly, one could prohibit blackmail within specific relationships.

But as such privileges make it harder to protect the rest of us from their law breaking, it seems to me that they should have to pay us to gain this privilege, unless it is clear that their relation produces more than enough compensating benefits to us. One way to pay would be by sharing some responsibility for their crimes.

The distortion that I’d worry about most is that blackmail as private law enforcement creates an added incentive to associate with potential criminals and ne’er-do-wells, in order to later blackmail them. The cost of this distortion probably doesn’t outweigh the benefits of much cheaper enforcement, however.

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Blackmail Is Gossip+

Sticks and stones may break my bones, but words will never hurt me. Old saying, that few believe.

A perverse man stirs up dissension, and a gossip separates close friends. (Proverbs 16:28)

They were filled with all manner of unrighteousness, evil, covetousness, malice. They are full of envy, murder, strife, deceit, maliciousness. They are gossips, slanderers, haters of God, insolent, haughty, boastful, … (Romans 1:29,30)

Law, first and foremost, keeps the peace. Sometimes people have big complaints about others, complaints so big that they are tempted to do something big about them. In such cases it can be very nice to have a law step in and declare who is right. If many accept the law’s resolution, peace may be preserved.

Gossip is dangerous. This has long been known, as the bible quotes above indicate. People can be greatly harmed by others talking about them, so sometimes gossip leads to very big complaints. Through most of the history of formal law, dangerous gossip was dealt with simply: law banned saying bad things about others. Of course this rule wasn’t always or even usually enforced – it was expensive to make a legal complaint. And there were various conditions and exceptions. But the basic idea was simple: keep people from hurting each other.

Our modern Western world thinks differently. We idealize conversation, and letting people say what they think. So we no longer have law punish people for saying bad things about each other, especially true things. We instead tell folks to tough it, that true mean words don’t excuse violent retaliation. Sometimes we see people hurt others greatly, out of malice, and we refuse to stop them. We sacrifice such victims on the altar of our respect for conversation.

Of course there are good things to say about gossip. By freely sharing info, we might aggregate it, and all learn the sum of what we all know. For example, we might learn to identify people who are mean or uncooperative, helping us to avoid them, and giving them stronger incentives to cooperate. While such social pressure to please aren’t always good, they seem good on average.

Blackmail is basically a threat of gossip; “if you don’t pay, I’ll gossip.” So almost all the things people don’t like about blackmail are things they don’t like about gossip. Someone could, out of selfish motives, say something that hurts someone else. If you don’t like this scenario, it is mainly something you don’t like about a freedom to gossip.

Yes, in addition to harmful gossip, blackmail can also involve money, and a threat. But money-inspired threats happen anytime parties haggle over a price, and few folks get worked up over that. If people are free to buy or not buy, and to sell or not sell, why not let them make threats about the price they’ll accept? Similarly, if people are free to gossip or not gossip as they prefer, why not let them haggle over the price of their gossip?

Yes, some prices are seen by many as unfair or immoral. Many don’t think the price of water or gas should rise in a crisis, and think the cash price of sex, babies, and organs should always be zero. But the arguments folks give for those cases don’t apply well to gossip — why exactly should the cash price of gossip always be zero?

Now a world that allows blackmail about gossip, i.e., haggling over the price of gossip, isn’t exactly the same as a world with only gossip. Legal blackmail should increase the incentives to discover embarrassing info, and thus the expected penalties from embarrassing actions. But these are mostly just stronger versions of the effects of gossip without blackmail, and they are effects we think we mostly like about gossip.

If we don’t want to discourage certain embarrassing actions, then why allow gossip about them? We could extend our privacy laws, and declare some topics off limits to casual conversation. But for topics where we do want conversation, because it is on average good to discourage people from doing embarrassing things, why not also allow blackmail?

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