Wednesday, November 24, 2004

$100

I've got a question for you all, but it's going to take just a little bit of a set up. But bear with me, if the question doesn't interest you, I think at least getting there will amuse.

Imagine for a moment that you are out walking with four friends, we'll call them (purely at random) Shelly, Jim, John, and Kami. You happen upon a hundred dollar bill lying on the ground. Since you all spot it at the same time, you determine that it needs to be divided among the party.

But instead of dividing it evenly, Jim, with a gleam in his eye, suggests another plan. He suggests that the party draws lots and place themselves in an order; 1-5. The first member of the party will put forward a plan to divide the money. Everybody then votes on that idea and if a majority is reached, the money is divided in the suggested manner. If not, that person does not get a share at all, and the second person gets to put forward his or her idea to the remaining three. Again there will be a vote, and so forth. When an agreement is reached, the money is divided. If no agreement is reached, the one putting forward the idea is out, and the remaining members start again. In the event of a tie, no majority is reached, and the proposing member is out.

Everybody agrees to this crafty plan. Everybody also agrees that there will be no hard feelings. Everybody will act in a rational, self-interested manner. If somebody gets shafted, the shaftee will not harbor any ill will (if it will help you star trek fans, assume everybody is a Vulcan).

OK, the lots are drawn and the order looks like this:

1-You

2- Shelly

3- John

4- Jim

5- Kami

So, you get to decide. How is the money divided? You can divide it evenly and are assured that everybody will vote for it. But you only need two other votes, so you could get 33 dollars. Or maybe 34? Is it possible to get even more?

Think about it for just a moment. How much do you think you could really get? Can you get more than 34? more than 40?

The answer may surprise you, but it's easiest to demonstrate by working backward.

Let's assume that four proposals were put fourth, and all rejected. It's now Kami's turn to divide the money. Since she is the only one left, she is going to keep all 100. No surprise there. Let's move on to the previous round.

Jim is just out of luck. No matter how he proposes to divide the money, Kami is going to say no, because then there is a tie, and she will get all of the money. Even if Jim keeps one dollar, and Kami gets 99, Kami will vote no.

So John's proposal gets more interesting. He needs one other vote. Kami is going to be hard to buy because if this vote fails, she will get all 100 dollars. But Jim knows he's going to get nothing if this vote fails, so he is easy to buy. John can propose to split the money 99 for himself, 1 for Jim and nothing for Kami. Jim, being rational and self-interested, will of course accept.

Moving on to Shelly. Shelly needs to buy two other votes, since she can't have a tie. John is going to be hard to buy because he's going to get 99 if the vote fails. Kami is quite easy to buy right now because she knows on the next round she will get nothing. Jim needs 2 dollars so that this proposal looks better than the next proposal (where he gets 1 dollar), so the split is 97 for Shelly, nothing for John, 2 dollars for Jim, and one dollar for Kami.

So your proposal looks like this. 97 dollars for you, nothing for Shelly, 1 dollar for John, and 2 dollars for Kami. If everybody is rational and self interested, they will accept your proposal. In other words you keep just about everything.

Here is a table if it helps.

Rounds

Rounds 1 2 3 4 5
You 97
Shelly 0 97
John 1 0 99
Jim 0 2 1 X
Kami 2 1 0 X 100

Absurd, right? This wouldn't happen in real life, right?

I think it does.

Look at how businesses run. Can't it be argued that this model is a fair representation of what happens? The proverbial 97% net profit goes to CEO, upper-upper management, and shareholders. This argument was just made about EA Games, makes of The Sims and other hits. Thousands of low-level employees (who actually do the work) get the 1 or 2 dollars while the most of profit goes to the upper few.

If you are investing in a company, which one will you choose to invest in? The one that doesn't make much money because it's dividing the spoils fairly among workers, or the one that maximizes its profits by giving little to the workers, and more to you?

Before this post gets Marxist on us, I'm not attempting to make a judgment call, just attempting to demonstrate that this type of model works in the real world. (if you disagree, please let me know, I'm very interested to see if I haven't thought this through all the way). On a small scale it doesn't work because we value friendship more than a hundred bucks. But when a faceless, unfeeling corporation is involved, we can be rationally, self-interested by proxy. Our bank can foreclose on granny and take her home so that we can earn our .8 percent interest on our savings.

So now that I've 'set up' things up, here we go with the actual question. Does formal education follow this same model? Does formal education (or the educational process as it currently stands) keep true learning in the hands of the few? If so, is it by intention or by circumstance? My first thought is that this does not happen. We have a public education system. Everybody gets to learn, in fact it's the law. But is this really the case? What about private schools? What about prestigious universities? Are they admitting and handing out their degrees to only a few in attempt to make them worth more? It can be argued that if everybody had a degree from MIT, that degree would not mean as much. What about when you move things to a global scale? Are the 'first world' countries intentionally withholding education? Or is it just circumstance that we have more educational opportunities? The MIT Open Courseware project gives me hope that we are moving in the right direction, but what more can be done?

Your thoughts are welcome.

4 comments:

bhchia said...

Hi Marion,

adding to your definition and examples, I suppose time-shares, insurance, also fall in the same category? They are known as pyramid schemes, because the people at the bottom does all the work, and the very few at the tapered top gets the bulk of the credit. It’s the way society has always been…

To address your question on ‘formal education’, I think the tenet lies on what determines something as formal education. My simple mind considers grades as the currency/main determinant of 'formal education'. If you (e.g. Dave) have a hold over your minions (inst 7150 bloggers), you pretty much can determine when, what and where your minions post. If a renegade student decides to post as and when he likes (e.g. the crazy bastard posts after the semester is over...), and cannot be bothered with grading - so long as he felt he learnt something - then is formal education still formal education for this individual? As Informal and flexible as inst7150 has been, it’s still a formal education setting to me.

I completely agree when you said 'It can be argued that if everybody had a degree from MIT, that degree would not mean as much.' I liken it to SYNDROME saying 'when everyone else has super powers, then there is nothing super about it anymore...' (The incredibles, 2004).

I don't think that the 'first world' countries are intentionally withholding education. But I do think that circumstances determine how much more educational opportunities one has. I played my cards right and gave myself a second attempt at higher education. But if my opportunities were not there to begin with, then I could not even plan to do my postgrad.

The MIT Open Courseware project is indeed laudable, but much of the content is boring (sorry Dave). Unless we can make it more fun, or at least enough incentive for people to really go out and help each other, the participation rate in MITOCW is only a shadow of a simple but popular anime/ movie fan site.

Rgds,
BH

Matthew Buckley said...

Ahhh… Now that is an interesting train of thought. Do we ‘withhold’ education through degrees and grades? I’ve know a few very bright people that never went to school and who have a difficult time getting promoted at their work because they don’t have ‘the degree’.

Maybe we need to be looking at alternative methods of demonstrating competence. Maybe I don’t have the time, money, or ability to attend MIT and go through the program, but if I can demonstrate that I am as competent, or more so, than their graduates, shouldn’t there be some way to demonstrate that to future potential employers?

David said...

If everyone had an MIT education would it be less valuable. I suppose it depends on how you derive value from an education. Is an education valuable because you gain competencies you didn't have before? Or is it valuable because you have something others don't have? What percentage of jobs in the world care where your degree is from (competitive view of education's value). Compare that number with the percentage of jobs in the world that require a degree (an approximation of the intrinsic value view). Which is greater?

David said...

And on Bing's point about the materials being boring... If you're starving for food, you don't refuse to eat free food just because the taste is bland. MIT/OCW is free. And there are people starving. The question isn't one of "does it taste good enough" or "is it exciting enough".

The question is, can the starving people use what MIT and we are giving them? If all we provide is Quantum Mechanics and Linear Algebra, can they even consume it? Or are we sending "just add water" food out into the desert?