Incentivology by Jason Murphy

Author:Jason Murphy
Language: eng
Format: epub
Tags: ebook
Publisher: Hardie Grant Publishing
Published: 2019-05-20T16:00:00+00:00

Chapter 9

Self-perpetuating Incentives

When I was young, about ten years old, I received a chain letter. It promised great good fortune if I sent it on to eight more people (lottery wins!), and terrible misfortune if I didn’t (dead relatives). I remember speaking to my parents about it. They weighed up the merits of letting me learn things for myself versus sternly interfering and shutting it down. In the end they let me make my own mistakes, and I sent on a few copies. I awaited the great good fortune promised. Nothing much seemed to change.

Games usually have owners and designers, with the ability to tweak and modify their creations, but chain letters are an incentive system that adapts without guidance. In that sense they’re a bit like the price system – constantly evolving even without a leader.

Incentive systems that occasionally don’t pay out when promised are not unheard of, but chain letters take that to a peculiar extreme. Chain letters’ incentives don’t pay out. Or they do so very, very rarely. Over 99 per cent of them have no payout at all and the rest are pyramid schemes where the money keeps flowing to beneficiaries only as long as new people are coming in. Payouts end soon enough.

That makes their incredible ability to survive and proliferate all the more astonishing. Because chain letters and their descendants still exist. Oh yes. And they have echoes in a certain very contemporary invention that we will get to soon.

The chain letter is an incentive that self-perpetuates. I’d had no desire to send oddly ominous letters to school friends and relatives before I encountered the chain letter. But once in hand, the letter itself begged me to pass it on, to pass the incentive to others. This is a precondition for collecting the mutations that keep an incentive system alive. When a chain letter must be rewritten by hand, it has great capacity to evolve. Each recipient can jazz up the stories within before they send it on, and a process of natural selection will diligently amplify the fittest, most successful such jazzings.

The letter I got was not of the pyramid scheme variety where each person must send money on to others in the system. Those letters were once the subject of a national mania in the US. In 1935 the post office in Denver, Colorado, was suddenly swamped with letters with the header ‘PROSPERITY CLUB – IN GOD WE TRUST’. It promised that recipients would receive US$1562.50 if they sent on a dime based on the mathematic principles of the chain letter.1 The letters spread throughout the US within weeks and before long they evolved to cut out the middleman, giving up on the postman and gathering in physical locations called ‘prosperity clubs’ where the process of enrichment could be rapidly sped up. Eventually the whole trend got shut down under lottery laws.

Traditional chain letters have evolved with the times, and twenty-first-century citizens are perfectly susceptible to the new format.

In the first decade

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.