Lifeboat situations: Ephemerisle Edition

The one event closest to an “incident” was a perfect fable of libertarian communalism (trying to run an improvised society without lots of rules) versus libertarian propertarianism. A swing-set boat was drifting in the waterway and had to be dragged in. The boat that volunteered to do so was sinking; the people stuck on the swing set were shouting for help, the last thing any of us wanted to hear.

So the nearest boat, a rented speed boat, was taken out by a Samaritan, against the wishes of the people who had rented it. I witnessed a tense, repetitive, and ultimately inconclusive debate between the boat owners and Rinaldi, as they took the stance of paying customers wondering why the event didn’t have a better plan for such eventualities than just grabbing the nearest boat. Rinaldi argued that they did have a designated rescue boat, it was just blocked by the complainers' boat. So this ruleless community had to improvise the best solution to the emergency that arose. In Rinaldi's view, the boat renters were really demanding that Ephemerisle have a government to take care of them. But if they were unwilling to pitch in and help, maybe they’d be better off not participating in a ruleless community. No one budged; the conversation wound down with Rinaldi assuring them that, even as they complained to him, if he heard someone shouting “help” and their boat was still the quickest means at hand, he’d temporarily commandeer it again.

Brian Doherty, Building Ephemerisle, Reason

Lifeboat situations at Ephemerisle....

At next year's Ephemerisle, I expect they'll construct a situation in which a sinking ship with ten people on it can be saved by someone throwing a lever that causes a ship with two people on it to sink instead, and another where they can only save the ten people by pulling the lifejackets off of two non-swimmers in the water to aid the ship's buoyancy. What will they do? Stay tuned....

Update: yes, I am just jealous...

Patri Friedman on National Radio

Patri Friedman featured on Afternoons with Jim Mora on National Radio on Tuesday last week. The audio is available here, but I'm not sure for how many more days the link will work. I'd held off on blogging this one because Patri's interview aired about an hour before I sent out the take-home final exam for my public choice undergraduate class. The last question on that exam asked students to evaluate the prospects for Friedman's Seasteading as compared to Paul Romer's Charter Cities.

Unfortunately, Patri's audio feed isn't as good as it could have been. But still well worth a listen. Mora's done his background research and gives a friendly, albeit somewhat bemused, interview.

Motorcycles

Patri Friedman will think less of you if you drive a motorbike: they're just too risky. He cites stats of fatality rates twenty times those of automobiles, corrected for miles driven.

But those numbers don't correct for agent type. What he really needs, and what I don't think exists, is data on relative fatality rates for risk-averse drivers in both types of vehicles. I'm sure motorcycles are still riskier, but twenty-times riskier, correcting for agent type?

Specify that there's an underlying distribution of risk-aversion running from highly risk averse to highly risk/thrill seeking. And, suppose agents sort across vehicle class by underlying risk aversion. So the most risk-averse agents buy a Volvo, the median agent buys a Toyota, and the most risk-preferring agent buys a motorbike. If we then find that motorcycles have higher fatality rates than cars, I don't know what portion of the difference comes from agent heterogeneity and how much comes from motorcycles being more dangerous.

How could you tell? Well, one way would be to check the proportion of motorcycle riders with health insurance as compared to car drivers. David Hemenway's propitious selection story suggests that risk preference is correlated across different types of behaviour, so adverse selection stories in insurance are overstated: he finds that motorcycle riders in accidents without helmets are more likely to be uninsured than those who wore helmets. In other words, folks who like risk take more risks. So, get some measure of risk preference derived from health insurance status (or life insurance, or credit rating, etc), use it in probit estimation for the likelihood of being in accident, then adjust the motorcycle stats for underlying agent type. It would be a big job, and I'm not going to do it, but it would be a cool paper for somebody who had ready access to the data.

So, to the extent that Patri is right to cast aspersions on motorcycle riders, it's because it might be an efficient signal of underlying agent type. But Patri, if you already have all kinds of other signals about somebody's underlying type, perhaps don't downgrade an otherwise risk-averse person quite as much as you otherwise would: it's highly unlikely that they're facing a 20X average risk.