Regarding window/patios with nice beach or city views, and days when those views are nice, in two polls respondents estimate that at any given time 1.3% and 0.8% of such places are actually occupied by people enjoying these views. Which makes one wonder why people bother to buy exclusive use, instead of sharing them. For example, ten tenants could share a single view spot for a tenth the price, and hardly ever have conflicts over who uses it when. We similarly see people owning boats and RVs that they hardly ever use and could instead rent more cheaply.
Are you confidant that they actually sold all the tickets?There will be a few people who fall seriously ill, or have some other really good reason they can't attend. Then people with various pretty good reasons, like some nephew getting married. Then people who just had calender mix-ups or lost the tickets. The people who were dating, but have had a bad break up. Etc. How many empty seats were there. (ideally as a proportion of seats.) Can it be explained just by people having something unexpected come up?
As every economist knows, common areas are least likely to stay clean and in good shape - there's always going to be some asshole who leaves a mess behind and everyone else who shares the space will think cleaning it up isn't their responsibility, so the shared area will always end up messy.
But surely a big fraction of all this is explained by signaling; people want others to know of and envy that they can afford to buy a view instead of renting it, and can afford the monthly phone fee, instead of having to worry about each call.
No on the latter.
Because nobody knows you have a monthly unlimited phone plan, and if nobody knows, it can't be signaling.
(Indeed, my experience is, apart from poor people and Canadians*, everyone just gets monthly; the convenience factor far outweighs trying to save a dollar or two Barely Using Your Phone - especially since they're primary media tools for lots of people.
* Canadians, because cell service up there is ridiculous.)
Responding to your 23 May added note, I don’t buy that all of the aversion to the making of sharing arrangements is caused by our minds inducing us to signal wealth. There are a number of aversions in play (including aversion to thinking hard in order to deal with complexity, aversion to being thought a possible swindler, and aversion to being taken advantage of and/or thought dumb or having to renegotiate if one’s arrangement design is flawed) which don’t involve wealth signaling.
As a more general aside, I think Robin that you systematically underappreciate the extent to which a typical person has such aversions. If I had to speculate as to why this might be, my guesses include that you are an economist, a rationalist, very bright, relatively unbound by social convention, have lots of interaction with others having these same attributes, and also project to some degree.
I think we do tho. Friday Saturday night there are people all over downtowns having parties at their places and enjoying views. You don’t need to be face up to window for it.
this is conventional silicon valley wisdom I believe on why micropayments have been tried many times but always seem (so far) to fail. Fixed payments relieve the cognitive load of always calculating each time you use something to decide if worth marginal cost. Personally I'd say it's a 90-10 split in favor of mental transaction costs above signalling as the reason. As this is what's blocking those economic business models from every working (signalling is less powerful if everyone is doing it).
The search term to look for is micropayments + "mental transaction costs". Quick search turned up:
2001 Nick Szabo paperhttps://nakamotoinstitute.o...
Here's Arnold Kling from 2003https://www.econlib.org/arc...
What's odd is Kling and many others reference a 2003 post by Clay Shirky, called "Fame vs Fortune: Micropayments and Free Content", but the post itself I can't seem to find any more. Here's at least the first paragraph. I think Shirky is commonly the primary source of this belief in silicon valley.https://wiki.p2pfoundation....
Here's 2003 post which seems to confirm influence of Shirky "Clay Shirky writes another article on micropayments which is bound to create huge ripples in the industry…the last one he wrote practically killed the industry in its infancy. "https://gigaom.com/2003/09/...
I think part of the reason is reliability. A private porch works 99.9% of the time, and it works fast. A rental service can never match that, and something that's 95% reliable (that you use often) feels qualitatively very different (it *just works*) than something that's 99.9% reliable.
As someone who owns both the boat and a patio (and who had timeshare arrangement for the boat in the past) - the biggest issue with sharing is that everyone wants to use it at the same exact time. Weekend evening for patios, a nice day on a weekend in case of a boat, etc. While nobody is interested in that patio view at 7am on a tuesday. And good luck renting anything like that on a major holiday. Never cared about status, but this is a really BIG driver for ownership.
I think you are right that much of having a nice view is about signalling status and wealth. And I also think that is a plausible explanation for boats, RVs and country club memberships. All of these things are easily visible to others and clear indicators of wealth. But I don't really buy this when it comes to phone plans and I'm also skeptical for things like Amazon and Netflix memberships. Phone plans especially are not very visible at all. I have no idea what kind of phone plan most of my friends have or whether they have a plan at all (as opposed to buying prepaid phone cards whenever they need additional minutes/data/etc). Amazon and Netflix are fairly similar, though I think they are a bit more visible than phone plans.
I think an underrated factor in why people like things like Amazon Prime, Netflix, phone plans, etc is that people hate having to choose to spend money. Especially if it feels viable to spend no money at all. Witness how much people hate having to pay for food on airplanes even though when the food is "free" it is just going to show up in higher ticket prices. I think there is mental discomfort in having to make quick frequent decisions about whether to spend money in ways that are not necessary and that people are willing to pay more to avoid this discomfort (especially if it's not made too explicit that they are paying more for this). If you had to pay every time you felt like watching a movie, a lot of people would start to wonder how much they really wanted to watch the movie and it might reduce their enjoyment of the experience if they felt like they paid more than they were expecting or watched a less desirable movie because it was cheaper. I think people will often pay more for experiences that feel easier or require less mental effort/discomfort.
We should encourage systems whereby people can signal their wealth/status by purchasing these very expensive tickets and gifting them to tennis fans who can't afford them. That way we have our cake and eat it, too: Those who want to signal get to signal, and those who want to watch tennis get to watch it.
When I was 21 and devoted to all things tennis, I found myself sleeping on the sidewalk outside Wimbledon in order to get a ticket to Centre Court (1st week). I was elated to succeed, but also found it so jarring to encounter significant *empty* seats on Centre Court for these matches. With hundreds of others, I had just slept on concrete to try to get a ticket; yet many people who had purchased tickets in advance were not even interested enough to attend. Clearly they had purchased these very expensive tickets for some reason other than to watch world-class tennis!
Are you confidant that they actually sold all the tickets?There will be a few people who fall seriously ill, or have some other really good reason they can't attend. Then people with various pretty good reasons, like some nephew getting married. Then people who just had calender mix-ups or lost the tickets. The people who were dating, but have had a bad break up. Etc. How many empty seats were there. (ideally as a proportion of seats.) Can it be explained just by people having something unexpected come up?
As every economist knows, common areas are least likely to stay clean and in good shape - there's always going to be some asshole who leaves a mess behind and everyone else who shares the space will think cleaning it up isn't their responsibility, so the shared area will always end up messy.
Depends on the RV.
A nice, super-expensive bus-based one? Yeah, that's a wealth signal, sure.
A cheap van-based one? No, you're middle-class or under and just like to RV-camp on the weekend.
A broken-down half-ass one? You're literally homeless.
(Trailers? Mostly the latter.)
But surely a big fraction of all this is explained by signaling; people want others to know of and envy that they can afford to buy a view instead of renting it, and can afford the monthly phone fee, instead of having to worry about each call.
No on the latter.
Because nobody knows you have a monthly unlimited phone plan, and if nobody knows, it can't be signaling.
(Indeed, my experience is, apart from poor people and Canadians*, everyone just gets monthly; the convenience factor far outweighs trying to save a dollar or two Barely Using Your Phone - especially since they're primary media tools for lots of people.
* Canadians, because cell service up there is ridiculous.)
Responding to your 23 May added note, I don’t buy that all of the aversion to the making of sharing arrangements is caused by our minds inducing us to signal wealth. There are a number of aversions in play (including aversion to thinking hard in order to deal with complexity, aversion to being thought a possible swindler, and aversion to being taken advantage of and/or thought dumb or having to renegotiate if one’s arrangement design is flawed) which don’t involve wealth signaling.
As a more general aside, I think Robin that you systematically underappreciate the extent to which a typical person has such aversions. If I had to speculate as to why this might be, my guesses include that you are an economist, a rationalist, very bright, relatively unbound by social convention, have lots of interaction with others having these same attributes, and also project to some degree.
I think we do tho. Friday Saturday night there are people all over downtowns having parties at their places and enjoying views. You don’t need to be face up to window for it.
But if everyone wanted windows with views at the same time, there should be a time when we see most windows used. But there isn't.
this is conventional silicon valley wisdom I believe on why micropayments have been tried many times but always seem (so far) to fail. Fixed payments relieve the cognitive load of always calculating each time you use something to decide if worth marginal cost. Personally I'd say it's a 90-10 split in favor of mental transaction costs above signalling as the reason. As this is what's blocking those economic business models from every working (signalling is less powerful if everyone is doing it).
The search term to look for is micropayments + "mental transaction costs". Quick search turned up:
2001 Nick Szabo paperhttps://nakamotoinstitute.o...
Here's Arnold Kling from 2003https://www.econlib.org/arc...
What's odd is Kling and many others reference a 2003 post by Clay Shirky, called "Fame vs Fortune: Micropayments and Free Content", but the post itself I can't seem to find any more. Here's at least the first paragraph. I think Shirky is commonly the primary source of this belief in silicon valley.https://wiki.p2pfoundation....
Here's 2003 post which seems to confirm influence of Shirky "Clay Shirky writes another article on micropayments which is bound to create huge ripples in the industry…the last one he wrote practically killed the industry in its infancy. "https://gigaom.com/2003/09/...
I think part of the reason is reliability. A private porch works 99.9% of the time, and it works fast. A rental service can never match that, and something that's 95% reliable (that you use often) feels qualitatively very different (it *just works*) than something that's 99.9% reliable.
As someone who owns both the boat and a patio (and who had timeshare arrangement for the boat in the past) - the biggest issue with sharing is that everyone wants to use it at the same exact time. Weekend evening for patios, a nice day on a weekend in case of a boat, etc. While nobody is interested in that patio view at 7am on a tuesday. And good luck renting anything like that on a major holiday. Never cared about status, but this is a really BIG driver for ownership.
I think you are right that much of having a nice view is about signalling status and wealth. And I also think that is a plausible explanation for boats, RVs and country club memberships. All of these things are easily visible to others and clear indicators of wealth. But I don't really buy this when it comes to phone plans and I'm also skeptical for things like Amazon and Netflix memberships. Phone plans especially are not very visible at all. I have no idea what kind of phone plan most of my friends have or whether they have a plan at all (as opposed to buying prepaid phone cards whenever they need additional minutes/data/etc). Amazon and Netflix are fairly similar, though I think they are a bit more visible than phone plans.
I think an underrated factor in why people like things like Amazon Prime, Netflix, phone plans, etc is that people hate having to choose to spend money. Especially if it feels viable to spend no money at all. Witness how much people hate having to pay for food on airplanes even though when the food is "free" it is just going to show up in higher ticket prices. I think there is mental discomfort in having to make quick frequent decisions about whether to spend money in ways that are not necessary and that people are willing to pay more to avoid this discomfort (especially if it's not made too explicit that they are paying more for this). If you had to pay every time you felt like watching a movie, a lot of people would start to wonder how much they really wanted to watch the movie and it might reduce their enjoyment of the experience if they felt like they paid more than they were expecting or watched a less desirable movie because it was cheaper. I think people will often pay more for experiences that feel easier or require less mental effort/discomfort.
Another example seems to be a--inclusive holiday package:
https://en.wikipedia.org/wi...
Thrive Market is a new, EA adjescent version of this.
We should encourage systems whereby people can signal their wealth/status by purchasing these very expensive tickets and gifting them to tennis fans who can't afford them. That way we have our cake and eat it, too: Those who want to signal get to signal, and those who want to watch tennis get to watch it.
When I was 21 and devoted to all things tennis, I found myself sleeping on the sidewalk outside Wimbledon in order to get a ticket to Centre Court (1st week). I was elated to succeed, but also found it so jarring to encounter significant *empty* seats on Centre Court for these matches. With hundreds of others, I had just slept on concrete to try to get a ticket; yet many people who had purchased tickets in advance were not even interested enough to attend. Clearly they had purchased these very expensive tickets for some reason other than to watch world-class tennis!
If I feel depressed, I wouldn't walk down the hall to see the view. If I could see it from inside my home, I would see it often without seeking it.