The Dating Game, Part Two

Here's your weekend reading assignment, 4ECon:

Three things related to pairing up that I'm going to bullsh... er, talk about, I mean, in this post:

1. People are generally unaware how to maximize their dating success - Many people are often too hopeful, decreasing their odds of a landing a successful relationship, while others are "settling" too often.

2. Your instincts on who to date must, by definition, lead you in the wrong direction.

3. There's a way, possibly, that you can override your instincts, extract brutal honesty from yourself and solve the problems in #1 and #2.



First, some background:

Without being too obvious, I'd say there's a difference between getting a date and finding a mate. Dates only require some version of some form of attraction to go forward, but pairing up for longer periods - finding a mate - will succeed or fail based on a wider variety of prerequisites: Desire to start a family, age, expectations of future dating success (desperation, really), and very importantly, your perceptions of the dating pool.

A lot of the people I know that are paired up did so with minimum conscious strategy and maximum luck - even my parents who've been married for 33 years. Almost entirely before any of the prerequisites I listed set in, they'd already started dating. As far as I know, the desire to start a family was not consciously why they initially got together. They were young, not desperate, with high expectations of both themselves and, I'm sure, their possible alternatives (the dating pool.)

So the way it worked for my parents was that they coupled, they liked each other, and the bigger reasons for staying together kicked in over time, after years of dating. This is a pretty common story, I think.

But what are the odds that relationships between these types of couples last for as long as, say, a highly calculated and formulaic match between two people with similar perspectives on things like starting a family, age, dating alternatives, etc? Well, the filtering process in the first case happens like this:

You date one person and then you break up if it doesn't work. You date another, end it if it's bad. You date another and end it if it's not "meant to last," etc. You keep dating until you find someone that either has the same perspective as you or morphs into the preferred perspective along the same time frame as you.

Filtering partners this way has a problem. I would compare it to trying to find the answer to a math problem by guessing and checking - only in this scenario checking involves significant bias. In other words, it's hard to rationally compare your current choice of mate to alternative options after you've invested so much time in him or her. ...In econospeak: the transaction costs of switching partners are high enough to prevent efficient allocation. (Sorry, couldn't resist.)

But does this really mean the probability of success using this method is lower than it otherwise could be? Consider a possible second method:

You take a test, determine your personality traits, your desire to start a family, your perception of the dating pool, your level of desperation (essentially) and then a computer uses a complex algorithm to match you with a partner that should maximize your probability of long-term success. This is also known as eHarmony - though I'm not sure they come right out and ask how desperate you are (but I'd bet they can get at it indirectly).

Now how could an algorithm that knows more information about you than you'd normally release by the 15th date, that sufficiently solves the problem of getting information into a centralized location, that takes potential pairs from the largest [possible] pool and matches them possibly offer you a lower probability of success than the first method, the guess-and-check?

Well, maybe because the type of people who put themselves in the centralized database are exactly the kind of people who have given up in the real world. The type of person that has not given up in the real world is most likely young, optimistic, confident and believes (likely with sufficient reinforcement) that the real world dating options are acceptable. These are exactly the kind of people that other people want to date, and thus they have not given up on the real world - it is not incredibly obvious that your dating options are severely limited when you're getting easy dates, albeit with second rate partners. ...Not to mention the fact that people often date, and even get married, for reasons of claiming (or pinning down, if you will) the best partners, regardless of overall "fit."





So what's the lesson to be learned here, Dave?

Let's get technical. EMH - Efficient Market Hypothesis, in finance, states that prices of assets will reflect all available information and it is therefore impossible for a single person to beat the market. The same rule should apply for all markets provided there is no barrier or limit on information.

The way this applies to the dating market is that it suggests that, within the multiple realms of date-matching (the real world or online), you will be paired with someone who is equally as "dateable" as you, in theory, over the long term. If you have the same information about the dating market as everyone else, you can't really exploit the market to your advantage - or, in relevant terms - you can't trick a '10' (from our scales in Part One, and from the "general scale" too) into a long term relationship with you if you're a '5', at least for any considerable amount of time.

There are, of course, exceptions to this general rule. One of them is that as long as divorce is socially or literally expensive, we'll get distortions. This is a lot less common now than it was 50 years ago, but it's still there, obviously.

Another exception is apparently (according to Tim Harford and others) a person's perception of the overall dating market, mostly due to the size of the available dating pool. If someone perceives their options as severely limited, they will be more likely to "settle." If this isn't obvious, here's a long argument that seems to prove it. Basically, people really do respond to supply and demand in the dating marking, and they decide to date and get married using the information available to them at the time. Perfectly normal.

So this means that a '5' could conceivably trick a '10' into a longer-term relationship for some amount of time given a significant and relatively permanent imbalance of the dating pool. Provided the '10' is not aware that he or she could be dating other '10's, the relationship should and probably would continue without too many problems.

Here's the more important question, though: If your goal is a long term relationship - even marriage - is it really the best strategy to try to exploit the market? Even if a '10' is actively choosing partners from a sea of '5's, the probability that a '10' will discover his or her error at some point and try to undo the deal (AKA breakup or divorce) is substantially higher than the probability of a '6' (dating a '5') discovering his or her potential.

So, assuming that the goal is a long-term relationship, doesn't it make sense to avoid your natural instincts - to not chase the best available mate, AKA avoid people who are "above" your dateability level?

I know, I know, it's an vague idea, but there is some way to figure out whether or not you are matched with your partner in terms of overall desirability to the opposite sex.

This is, in fact, one of those things that people just know. For a small example, if you're constantly worried about your partner cheating on you then it means the odds that you've unknowingly (or knowingly) exploited a dating market loophole are quite high. It's not a sure thing, of course - you could just be completely paranoid. But then being completely paranoid is also a sign that your partner might be more well-adjusted (less crazy/paranoid), and perhaps therefore more desirable than you.


(This post's link is unrelated, like usual, but I think it's pretty interesting)


All this might be pretty obvious to you. It also might just be useless if you're happily dating/engaged/married/dying of cancer. Otherwise it just may be helpful - if you're looking for that perfect match, or if you're just really desperate for a "LTR" (See: Any Craigslist ad in a random city for women in their late 30s), taking the scientific approach - the economic approach - just might be the best strategy.

If eHarmony and other online dating algorithm-based databases can, in theory, maximize your probability of a long-term success with a partner in the second-rate online world, shouldn't there be a way to do it in real life - where the first-rate people have yet to give up - as well? If all the most desirable people are facing substantial bias and asymmetrical information about their alternatives in the real world, shouldn't there be some way to find the "perfect" match that takes into consideration your individual market circumstances?

There should be - and maybe I'll be able to make some crap up by the next excruciatingly long post.

For now, arrivederci.

My Resolution

...is 1280 by 1024, and will likely stay that way for some time. I recommend everyone jump on the bandwagon this year and beef on up to the "twelve-ten," as I've been known to call it. If you're 1024 x 768, you need to try a little harder this year. If you're 800 x 600, well... Well, someone should just go directly to your house and beat the hell out of you. We're living in the 21st century, man. Grow the eff up.

On the other hand, if you're one of the 1337s out there with a 1600 x 1200 or some other wackiness, congrats. You've truly made it in this world. I'm proud.





OK, enough of that.

My New Year's resolution this year:

I promise to be more open and honest about my political opinions on this blog.

That's right. Instead of giving people and their dumb opinions the benefit of the doubt, instead of avoiding politically radical and/or offensive statements, I'm going to come right out and tell everyone exactly how I stand on THE ISSUES.

So, to start off right, I've made a list of 49 short statements that might anger someone/most everyone/wieners or otherwise be somehow controversial, yet honest.

I MOSTLY agree with these statements. There is not a single one, though, that I agree with completely. On the other hand, there's not a single one that I completely disagree with. So here goes:

1. The Federal Reserve is not evil.
2. No matter what you think, outsourcing (yes, jobs!) is better for everyone in the long run, and better for the vast majority of people in the short run.
3. The minimum wage mostly hurts the poorest class(es).
4. Unions are almost always unnecessary and harmful.
5. Earned Income Tax Credits reduce the standard of living (income) for the poorest class.
6. There is no "shrinking of the middle class," or anything even remotely similar to it going on.
7. Fiat Money is good - Reverting to the gold standard is retarded.
8. Subsidizing college raises the cost of college and hurts the unsubsidized (especially in the short term).
9. Legal immigration is good for the economy.
10. Illegal immigration is mostly good for the economy.
11. Building a giant Mexican border fence is insane.
12. This is what cussing in British text looks like: &£#%.
13. Ron Paul is a little crazy, and he's a surprisingly crappy economist. I'm not sure if he wants to be one, though, so I guess it doesn't matter.
14. "Fair trade" is stupid and harms the least skilled/highest poverty classes in the third world while helping the semi-skilled, semi-poverty classes (if you know what I mean...)
15. Real monopolies don't exist in a world without "excessive" government regulation.
16. Real tyranny happens just about as often as market tyranny (depending on your definition of tyranny, of course.)
17. Rudy Giuliani is a better and more decent candidate than you think.
18. The frequency with which someone updates their Facebook "status" is roughly correlated to their real world social status. Also, It's annoyingly confrontational (I'll explain that if anyone needs clarification.)
19. People who call themselves Libertarians aren't actually, truly, really real Libertarians.
20. I think of myself as a quasi-Libertarian, by the way.
21. I'm more inclined to vote Democratic over Republican.
22. Some taxes are good.
23. Most taxes are bad.
24. Good economics will help the poor and needy much, much more than "common sense" policies like the minimum wage & welfare.
25. BJS data and Steven Levitt have convincingly argued that the legalization of abortion is one of the primary causes of the huge drop in crime over the past 15 years.
26. CAFE standards (AKA vehicle mileage requirements) don't work even close to as well as a fuel tax would.
27. Carbon offsets might possibly be the most inefficient method of reducing carbon emissions that I could possibly think of (as well as a giant diversion from the real problem).
28. Not getting your baby vaccinated is silly, greedy and dangerous.
29. The death penalty doesn't work in this country, and it barely works in others (that are far, far more brutal). Go ahead, ask me why.
30. Buying a house - unless you're going to rent it out, or if it's a necessity for the family - is NEVER a good financial move, EVER.
31. Memory Foam pads are pretty soft, but not that soft.
32. It'll most likely be cheaper to "offset ALL your carbon emissions" AND drive a reasonably low mileage car for the next 10 years than it is to buy a new Toyota Prius.
33. George W. Bush is not that bad of an economist.
34. John Edwards is terrible when it comes to economic policy.
35. I like Hillary Clinton and Barack Obama, BOTH, more than any other candidate I've ever thought of. I'd vote for either of them over Bill Clinton (If this were 1992).
36. The world is not "controlled by the World Bank."
37. "Universal health insurance" - depending on how it's done - is not that bad of an idea, considering all benefits & costs.
38. I've never met anyone who agreed with me on every one of the issues in this list.
39. The only bad thing I've ever heard about Bill Clinton (from those who don't like him) was that he had sexual relations with that woman. I can think of a few more bad things, but I've never heard them from other people's mouths.
40. Machines don't "replace workers," and neither do immigrants in this country. Rule of thumb: If the skill level is different than yours, it/him/her can't "take your job," for the most part. If, on the other hand, you have skills equivalent to those of a poor, untrained illegal immigrant, then you just might lose your job, but, courtesy of rampant racism, if you're a white American, you'll probably be fine.
41. Speaking of that, this is probably the best article in the category "general economic theory" that you'll read all year.
42. If you don't like Ronald Reagan, I bet you can't tell me three (3) distinct things he did during his presidency to deserve your dislike.
43. FDR was a dangerously horrible policy maker/economist. His friends were even worse. His ability to motivate and speak, though, were fantastic, and reasonably (even economically) valuable.
44. The war in Iraq was a horrible idea in terms of decency, diplomacy and human respect and rights, but possibly an amazingly clever strategy in terms of U.S. long term goals. I've said it. I can't un-say it. Go ahead, ask me for details, I've got a great BS story.
45. I believe that the word "Gay" in the phrase "Gay Marriage" sufficiently sets it apart from "regular marriage." Besides, the fact that the government has some hand in marrying people - an inherently religious ceremony - is equally as shocking as homosexuals actually preferring to use the word "marriage." Everybody should shut the hell up and let two consenting adults do whatever the hell they want.
46. Martin Scorsese loves gangsters. It's getting weird. The movie "The Departed" isn't too bad, though - you should watch it.
47. If you disagree with any one - ANY one - of the statements in this list, you're probably wrong. I might be wrong, too, but I'd be willing to bet that if you gave me enough time, I could easily convince you that I'm not wrong, which would mean that we'd both be wrong. For the record, that's a much more preferable scenario than the one in which I'm right and you choose not to realize it.
48. I'm tired of listening to music, in general, but for some reason I still love Silverchair and the few songs off their album "Diorama." Also, their new album, "Young Modern," is right up my alley and I totally freakin' love it too. Unlike Diorama, though, I'm not sure I can translate this love. Everyone except for Fred might be in the dark - permanently - about this one.
49. I've spent all day doing nothing, and it's 11:00 PM on New Year's Eve. I'm going to go watch fireworks at the George Washington Memorial Masonic Temple, which should be pretty nifty. I hope. This city is awesome, and anyone who disagrees is a butt.

No time to check for grammatical errors. I'll do it tomorrow. You're all drunk tonight anyway, right? Who the fudge reads (...or writes...) blogs on New Year's Eve?


Welcome to 2008, you 4ECon readin' bastards!

Your Christmas Present

...is really somethin' special this year:

I'm giving you all carbon offsets. By "you all," I mean all official members of the 4EConglomerate, and by "carbon offsets" I mean I'm going to be offsetting your carbon emissions, which will basically allow you to pollute more without increasing your level of guilt! Isn't that great?

Here's how it's going to work: I was planning on driving like 20,000 miles this coming year in my car that gets less-than-amazing gas mileage. Now, in the spirit of giving and selflessness and caring and me being a generally fantastic person, I will not drive any of those 20,000 miles. Since this comes out to be about 16,000 lbs. of carbon emissions (really), you're all free to divide that carbon amongst yourselves and guiltlessly use it any way you like!

So, if you've got to take an extra-long road trip this year in a H2 Hummer, don't worry: Your pollution has already been offset. If you're planning on buying a private jet and flying around just for the hell of it, your "Carbon Footprint" has been washed away by the tide of my generosity. Even if you just feel like cruising down Main Street in your Camaro an extra 2,000 miles or so this next year, go nuts! In fact, pick up a hot date and be sure to mention, "You know, baby, I'm totally carbon neutral right now." That oughta do the trick.

So pollute a little more this year, friends - it's on me! Merry effin' Christmas! Here's your card:
For those of you who know what I've been doing the past few months (...not much...), this ought to be especially hilarious.



Don't give me that, "But Dave! You weren't going to drive those 20,000 miles anyway!" How the hell do you know that?

OK, ignore that one if you want. Here's a better Christmas present for you - a priceless, invaluably fantastic idea:

The Ultimate Eco-Friendly Christmas Gift

Friends, relative(s), readers of this con, er, I mean, the Con:

Is there someone on your holiday shopping list this year that just doesn't care much about material possessions? Someone that's constantly complaining about how George Bush and the evil empire are destroying the environment? Or, perhaps, you just need a gift for that eco-savvy professional that wants to do something for the environment but is way too busy?

Try carbon offsets! Yes sir, just like all them fancy corporations are doing, you too can monetize reductions in pollution! For about the same cost as not driving to the store you can give the gift of freedom; the gift of guiltlessness to that special someone. Here's how:

Think ahead to the coming year. Everything you could have done this year that would have created pollution, just don't do it! It's that simple! Were you thinking that maybe this was the year you were going to travel across the world in a hot air balloon? Don't do it, and give that extra freedom to pollute as a gift! Maybe you were planning on clear-cutting the forest next to your house for aesthetic reasons. Don't! Give the carbon-offsetting benefit of those trees to your friend or relative! Is this the year you were planning on burning city hall to the ground? Stop - think of all the carbon offsets that could be created by not starting that massive, polluting fire!

So reduce your potential carbon footprint and give that reduction to someone else! It's easy, it's cheap and it apparently makes you a better person/multinational corporation!

Did you need some sort of Christmas card that expresses the idea behind your gift? Don't worry, we've got you covered:

$4.95 per card or $48 for a dozen. These beautiful Christmas cards are the perfect way to say "I'm more environmentally conscious than you." They're made from 100% Ecuadorian Rain Forest trees and are embossed with high-petroleum plastic, assembled by coal-powered robots in China and shipped across the world to you with extreme care by sumo wrestlers on Atkins driving speedboats made in 1974. Also, this product is 100% carbon-neutral, done by purchasing carbon offsets from highly inefficient companies. Yes, it's expensive to be completely carbon neutral, but we figure we can easily pass that cost on to the environmentally concerned customer. Merry Christmas to you and your whole naive, er, eco-friendly family!

Oh, and one more thing: By this time next year my company - The Foree Con: Carbon Offsetting Co. - should be up and running. Basically, I'm going to allow people to pay me to sit around and pollute less (by doing less stuff). Let me know if you're interested, I'll see if I can sign you up early.


Happy/Merry ___________, everyone!

- Dave

Optimal Treating

Warning: Don't Read This Post! It's too scary...
...because it's so pointless and long...
So if you're too afraid to enter the "House of Long, Boring Post-Horrors," just read the conclusion at the end.

The phrase "Trick or treat" has been said so many times by so many kids that the once obvious threat has become just an arbitrary bundling of syllables. It's interesting to think that if we take an offensive or even threatening sentence and make a bunch of children say it, suddenly it's cute.

Imagine if millions of children around the country were going door to door saying, "I'll cover your house with toilet paper if you don't give me some amount of money between 5 cents and a dollar!" While it's the same thing as "trick or treat," I think people would be put off by knowing specifics.

So sure it's cute to see kids repeating the same phrase, dressed up as invented creatures, unoriginal as they are, but should we really be rewarding children for hiding their faces, coming to our houses and threatening us?

Trick-or-treating is clearly akin to robbery. While so many other bastions of childhood, such as toy guns, chewing-gum cigarettes, games of Cowboys & Indians, playing in the street and riding a bike without a helmet have all been replaced with "better," more concerned-parent-friendly alternatives, trick-or-treating somehow has slipped through the cracks. At the very least, the phrase "Trick or treat," could have been replaced with "Please, dear neighbor, may I have some candy?" But no - parents have destroyed countless other traditions based on safety concerns or political correctness, but trick-or-treating lives on. How did this happen? How does a traditional Halloween survive when engaging in socially unhealthy behavior is a gigantic no-no for the children of today's overly-coddling parents?

Not only does it survive, but it's more popular than ever. We're spending more than $5 billion on Halloween this year, and it's been growing at a rapid pace over the past few years:


So why is this? I think it's because people are convinced that trick-or-treating IS socially healthy behavior. And it kinda seems like it, doesn't it? I mean, it's a lot like working a real job: You have to leave your house and meet up with your associates, and you travel around your assigned territory trying to convince people to pay you for some hard-to-measure amount of labor. Only in this case the particular labor involved is dressing up, ringing a doorbell and asking for candy.

And even considering that, you get a pretty low return on your investment.

As much as we enjoy dressing up and running around the neighborhood with our friends, the monetary costs - taken by themselves - of trick-or-treating are pretty significant compared to the benefits. How significant, you ask?

Thanks for asking. Here we go:

A kid needs, usually, a mask and a corresponding costume. I had to look this up, but it appears that the average mask costs about $20 to $50 dollars (so average at $35), and the rest of the costume ranges, apparently, from $14 to more than $100. I'm sure a lot of people make their own costumes, though, but the minimum cost has to be at least $10 (the price of ruining a white sheet plus candy bucket). The maximum cost can run in the hundreds.

Based on these costs alone, it seems that the average kid would have to get at least $14 to $80 worth of candy in order to recoup his parents' monetary investment. Let's further assume that it's possible for a kid to 'hit' one house every three minutes for the three hours between 6:30 PM and 9:30 PM - which is really pushing it, if you ask me...

So that's 60 houses. If we take the average of the two figures above ($14 & $80), we get around 47 bucks. This means that the kid has to get about $0.80 worth of candy from each house in order to justify the investment. Considering 60 houses is a lot to visit in one night, I'd say it's damn near impossible to come out ahead if you play the averages...


So how do you come out ahead?

Well, what we're going to figure out now is how much you, the treat-giver, should spend on Halloween candy to give out to the trick-or-treaters, and how much you should spend on a Halloween costume for your kid in order to maximize both your return-on-costume investment, your return-on-candy investment and also the value you get from your community participating in Halloween traditions.

Here are some assumptions with which you cannot disagree:

1. You appreciate Halloween and its traditioniness and are willing to pay some cost for its continuation.

2. You want to minimize the above cost, as well as all other costs associated (costume & candy costs).

3. You want to maximize your kid's happiness: This includes wanting your kid to be creative and have learning experiences, but also to receive a maximum take of Halloween candy from the neighbors.

4. This one's important: The work and/or money that the AVERAGE kids put into their costumes is directly correlated with the amount and quality of the candy they receive. This means that if all the kids just start throwing sheets over their heads and going door-to-door, the neighbors will start giving away 2-cent candies instead of more tasty, and more expensive, chocolate.

5. The cost of candy determines its tastiness and therefore its popularity with the trick-or-treaters. But equally as important: kids aren't that picky about free candy...

6. People's current choices are not currently surplus-maximizing, but they would prefer them to be. (We have to assume this so I have something to write a post about...)

OK - are we all clear on the assumptions?

Now to find the optimal amount of money to spend on treats, as well as the optimal amount to spend on a costume. We'll tackle this problem by testing the extremes:

Let's pretend everyone chooses to minimize all their costs. This means throwing a sheet over the kids' heads, providing a paper sack for the treats and kicking 'em out the door. With such careless and unconcerned investment, how do the neighbors respond? If every kid that came to your door was some sort of cheap ghost, would you continue to hand out expensive candy? Of course not, but you also don't want trick-or-treaters to stop coming altogether, so you'll hand out the cheapest candy you can find just for symbolic value, which is, of course, $0.01-per-piece candy. (It's got to exist somewhere...) So, if you spend $2.00 on the paper bag and the sheet for your kid's costume, you're pretty much guaranteeing a failed trick-or-treat experience, not because you individually are minimizing costs, but because everyone is acting like you and minimizing their costs as well.

But there's a value of Halloween and its traditions (assumption #1). Consumers are willing to pay to make sure the holiday doesn't suffer. So in this crazy imaginary world where everyone is minimizing their costs, is there an incentive to spend more on your kid's costume and/or trick-or-treaters' candy?

F-yeah there is.

If all the kids are cheap ghosts, and all the neighbors are giving out cheap candy, there is disproportionately large value in handily beating the neighbors in your candy offering, and having your kid be the "talk of the town" with his slightly-better-than-cheap-ghost costume. So for spending a few extra dollars, your house will become Halloween-central and your kids will be incredibly popular.

So clearly cost-minimization is not a stable equilibrium, as everyone has an incentive to "cheat" and start competing with each other. This is obvious, of course, since if people suddenly didn't want to compete, we'd be spending less money on Halloween each year instead of more...

But how much will people compete with each other?

Well, the value of that first extra dollar is clearly substantial. If all the other kids have $1.00 outfits but yours has a $2.00 outfit, your kid is - by definition - twice as awesome.

At the end of the spectrum, though, the marginal value of an extra dollar should be zero. And at what price is this the case? It's different for every person, of course, but I think we can generalize: If all the kids have $100 costumes, is there any incentive (in terms of optimization) to spend $101? What about if all the kids have $25 outfits, but your kid's cost $26 - is that a substantial enough difference?

No. First off, homeowners on Halloween most likely suffer from a free rider problem. Essentially, if five amazingly intricately-designed and scary looking zombies and ONE crappy ghost comes to your door, you'll give them all the same quality and amount of candy - the ghost that spent $5 on his costume "rides for free" off the zombies that spent $50. If you disagree with the fact that you'd give them all equal shares, you're a bastard. I'm assuming people aren't bastards... (Also, don't forget assumption #4: that kids' costume expenditure is directly proportional to the candy they receive as a group, but not as an individual...)

So this means that parents are faced with a trade-off: They can maximize their kid's candy to costume-cost ratio, OR they can maximize their Halloween tradition value. If parents choose the cheap & lazy costume route, they'll reduce their own (and their neighbor's) payoff and pleasure from Halloween. If they put too much emphasis on that Halloween payoff, though, they'll more likely over-spend and minimize their joy from profit maximization. (This is assumption #2 - And don't tell me maximizing profit is not awesome...)

The answer to this trade-off problem would normally depend on a world of opinions, but not in a world where the cost of candy can be used to determine the answer: That's right - there's a constant in this problem that helps determine optimal amount to spend on your kid's costume (and subsequently on Halloween candy.)

Remember that one of my assumptions was that it's possible, at most, to trick-or-treat at 60 houses in one night. Also, we've all learned from experience that it's not necessary to spend $0.80 per trick-or-treater when you're giving out candy, right? In fact, kids will come to your door (year after year) if you give out candy that's just slightly better than crap. It turns out that kids prefer quality, but they will be return because they don't dislike your candy offering. So here's the biggest assumption of all: Smarties cost about 6.5 cents per "roll" (piece). In a competitive world, we could conclude that beating this cost by just a little would be enough to satisfy kids and keep 'em coming back every year.

So let's round up to $0.10 per trick-or-treater and assume it's definitely more than enough to keep kids coming back (based on the fact that even Smarties are pretty tasty, and you're beating that cost by at least 50%).

At 60 houses, this adds up to about $6.00 worth of candy for a hard working trick-or-treater. Now here's the problem: You can't get a good costume / candy bucket for less than $6.00, now can you? If you tried - and if everyone else tried, too - we'd reduce the value of Halloween to the point where only the kids would want to participate; parents would face substantial costs by themselves, while everyone else gets the benefits. In other words, we'd have a long-term equilibrium with parents subsidizing the majority of Halloween costs while non-parents pay just a few dollars for candy.

Since Halloween can't survive solely on parent subsidies (neighborhood participation & incentives are required), the community value of Halloween must therefore include non-parents spending at least an amount above and beyond the $6.00 that - when multiplied by about 60 - comes close to equaling (but not necessarily as much as) the amount that parents spend on their kids' costumes.

So we're essentially faced with a simultaneous move game - non-parents have to make candy expenditure decisions at the same time that parents make costume expenditure decisions (and candy decisions...) without each other knowing what the others' choices are.

Acceptable costumes cost, at a minimum, about $14 (according to my sources). So we can plug this and the other numbers into the general formula to figure out the answer:


[Cost Per Piece of Cheapest Acceptable Candy] < [Non-Parent Per-Piece Candy Expenditure] < ([Minimum Acceptable Costume Cost] - [Cost Per Piece of Cheapest Acceptable Candy] * [# of Houses 'hittable' in One Night]) / [# of Houses 'hittable' in One Night]


So with our values plugged in:

$0.10 < [Non-Parent Per-Piece Candy Expenditure] < [$14 - ($0.10 * 60)] / 60 And simplifying:

$0.10 < [Non-Parent Per-Piece Candy Expenditure] < $0.133


So we end up with our optimal answer for the non-parent: In order to both minimize your monetary costs and maximize your Halloweeny benefit, you must pay some part of the Halloween kid-costume-subsidy. To make the value per piece a little easier, we'll assume it's a whole cent value greater than 10 but no more than 13, which leaves $0.11, $0.12 or $0.13 per piece of candy you give away. I'd argue, though, that it's not really necessary to subsidize the parents too much, so $0.13 is probably out of the picture. That leaves 11 or 12 cents per piece. In other words, if you expect to get 100 trick-or-treaters, you should reasonably expect to spend about $11 to $12 on candy. If you normally get a trick-or-treater every minute for a full three hours (as I've seen before), this means Halloween should cost you no more than $22.


Parents, on the other hand, face both the costs of giving out candy to the kids on top of the cost of furnishing their own kids with a costume. Fortunately for people who are still reading this post, I'll just assume that these two costs are mentally separated in the minds of parents. If they weren't separated, though, the formula for non-parents' candy expenditure would depend on parents spending a different amount on candy, in order to keep the "Total cost of Halloween" concept in tact. Since I'm making the assumption of compartmentalization, though, parents should spend around $14 on each kid's costume and .11 (instead of the higher possibility - $0.12) per piece of candy.

So for a household with two kids that gets 100 trick-or-treaters, this would lead to a total Halloween cost of about $39.

(This time it's a picture of The Guz a few years ago trying to hit a piece of a pumpkin with a hammer...)

While I've covered everything from the diminishing marginal return on costume investment to the minimum acceptable price and quality of a piece of candy, I had to make a lot of assumptions that I didn't explain entirely. The way I see it, you can either trust me on these things or you can ask that I make this post twice as long as it already is... I think we all know the answer to that one...

Anyways, on to the
Conclusion

If every household in America has about 1.7 kids (quick Google search results), and there are about 120 million households (Census estimate), this means we should be should be spending about $4.2 billion on Halloween each year in total. If you look back at that graph, you'll see we started barely exceeding this number in 2006, meaning we OVERSHOT OPTIMALITY!!!

So what is the significance of that? Well, if we suddenly start assuming people will regress to some sort of "optimal mean," then Halloween spending (and subsequently celebration) is due for a decline. Of course, people are hardly rational and will hardly play the Halloween game optimally, so maybe we'll just keep getting more Halloweeny, more obsessed with decorations and candy and keep gaining weight every year during the quarter-long holiday season from October to January.

More importantly, though, is that as an individual household you can actually maximize your Halloween consumer surplus by taking my advice: Remember, $14 per kid on costumes and 11 to 12 cents per piece of candy should not only maximize your own personal Halloween surplus, but also maintain the value you get from the community being just as Halloweeny as you.

These Modern Bullies Don't Go Off Unless You Hit Them Just Right

In honor of September 11th, I dedicate this post to those of us who have yet to develop their skills in diplomacy: The children.

Yes, this post is for the kiddies, and I'm making it especially applicable to the plight of the modern schoolyard rascal - I call this post "How to Beat the Bully."
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We can all agree that today's young bullies have something in common: They just don't care about what you, or their teachers or other authority figures think. In fact, they get some sort of joy out of breaking the 3rd grade societal rules and norms. So how do you take on an enemy that adheres to only the Bully Code?

These are the strategies that used to work on bullies of the past, and are now out of date:

1. Be nice! Win 'em over with niceness.
2. Make 'em laugh! Convince them that you've got something special to offer, and that you're valuable to them.
3. Learn to box! Even if you don't use it, it helps you confidently counter their threats.
4. Figure out what really makes 'em tick. Bullies are just doing it for the attention - Figure out what they really want and understand how to help them.

Unfortunately, modern bullies are more bullyish than ever before. That's right kids - these strategies might have worked in the 1950s, but today's bullies just don't care any more. They don't follow any of the conventional, recognizable rules of bullying. For example: If you try out strategy #2, they'll most likely take further offense at your humor and want to pick on you even more. Even #3 doesn't work, as the 21st century bully is sneakier, stealthier, and more willing to use shady fighting techniques. Good ol' fashioned boxing ain't gonna do the trick.

What about #4, you ask? Well, I've got some bad news: Recent advancements in psychology have finally enlightened our knowledge of the bully mind. Unfortunately, they're not just doing it for the attention - It turns out that they really hate you for doing all that stupid stuff you do. Remember when little Jacob wouldn't stop telling that joke about the ostriches? Well, that was the real reason he received that swirly. ...And when Rebecca wouldn't stop bragging about her new dress? That's why she got pushed in the mud.

I'm sorry kids, but unless you stop being who you are, you're going to have to learn to face these bullies! Fortunately for you, I've got excellent news!

Finally, after so many risky strategies; so many failed attempts at stopping the monster from trying to take your lunch money, we've got an answer. It's a multi-step process, though, so listen carefully:

1. First and foremost, you've got to remember to follow these steps the moment the bully makes clear that you are the target of his rage. Any hesitation, or confusion about whether the bully is really going to become your bully will ruin the entire process.

2. Second: Begin trying to convince yourself that the bully is a MAJOR THREAT. In fact, if you don't do something right away, he'll start making you cry all the time.

3. Gather information about the bully. Find out where he lives, who his parents are, and who - if he's got any - he calls friends.

4. The old, outdated way to fight a bully was to face him head on. This way would clearly fail against any modern bully, so here's what you do, kids. Remember, follow these instructions EXACTLY:

- First, run around the playground at school screaming and shouting and punching and kicking, making sure everybody knows that you've gone off your rocker and are very pissed off. Make sure everyone realizes that you don't care about having friends, looking proper, or - and this is important - about the amount of damage you might do. Try to cause some playground damage.

- Second, make sure you don't deal directly with the bully. After seeing how wildly and arbitrarily you reacted to his initially bullying, you'll definitely get his attention. He'll start to wonder why he's not being dealt with directly...

- Third: Once the entire schoolyard knows you're on a rampage, it's time to start branching out. You're going to go after the bully's parents. You might have some qualms with this one, so be sure to make up a good story before you do: Something like, "I know for a fact that the parents are going to bully me, too. And when they do it, it'll put me in the hospital!" And remember: Don't let the smoking gun be a cloud of schoolyard dust [with your bully's parents running away from your bruised body].

- After you've gone to the bully's parents' house and beaten them severely, don't go anywhere. This is where you're going to hang out for a long, long time. Why? Well, this way, the bully knows that you've entered and conquered his home, and you're quite comfortable there.

- At this point, the bully will realize that you're not just some wimp in the schoolyard - He's got more than enough evidence that you're an insane, violent conqueror that's not afraid to do seemingly arbitrary acts of violence and destruction in response to any amount of bullying.

5. The bully might have friends on his side, or he might just try to use your crazy behavior as a reason for people to join his team. Depending on your bully's original reason for bullying you, he might just gain some support. Hopefully, though, by the time he gains enough support to really do some serious bully-damage, you'll be out of his parents' house and back at the schoolyard, staring menacingly at the next potential bully.

And there you have it!

I guarantee you, kids, that if you follow these instructions exactly, you'll get great results.

Your bully will be completely appalled, distracted, confused and shocked that you went that far over the deep end responding to his single act of bullying. Not only this, but he'll tell his friends:

"Don't mess with that kid. If you hit him even one time, he'll destroy the playground, betray all of his friends and beat up your parents!"

And trust me - nobody - even modern bullies who seemingly have nothing to lose - will want to put their house, their parents, their friends and acquaintances, people they hardly know and their own lives on the line simply to make a point to the potential schoolyard nerd.
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So, kids, if you've ever wondered how you take down a bully that seems like he's got nothing to take down, just remember: take down everything that's even remotely associated with your bully - except the bully himself! - and he won't bully you again any time soon. However, make sure you don't start freaking out before he starts his bullyin'.

Also, remember to stop going nuts after awhile. If you keep battering everyone and everything associated with your bully, at some point he'll forget why you're doing what you're doing (and so might you), and if you wait a long time and then start beating up his 2nd cousins or his father's ex-roommate's housekeeper, he'll start to think that you're the bully, and then he'll be reading this post.

...And if he reads the advice in this post, it means we're about two stages away from everyone getting beaten up, and that's no good at all. Right, kids?


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Update 9/24: Thomas Friedman (World is Flat author) apparently agrees with my stance against modern bullies (Starting at "The real reason for this war"). Of course, he thought of this more than three years ago... I figured it might help clarify my point about why it's sometimes important to go nuts and "smash something," as Friedman puts it.