Leavitt and Dubner
It starts with a basic understanding of game theory and incentives
HT: naked capitalismKing Solomon built the First Temple in Jerusalem and was known throughout the land for his wisdom.David Lee Roth fronted the rock band Van Halen and was known throughout the land for his prima-donna excess.What could these two men possibly have had in common? Well, both were Jewish; both got a lot of girls; and both wrote the lyrics to a No. 1 pop song ("Jump" in Mr. Roth's case and, in Solomon's, several verses from Ecclesiastes that appeared in the Byrds' 1965 hit "Turn! Turn! Turn"). But most improbably, they both dabbled in game theory, as seen in classic stories about their clever strategic thinking.Early in Solomon's reign, two women came to him with a dilemma. They lived together—they were prostitutes by trade—and within the space of a few days had each given birth to a baby boy. One child had died, and now both women claimed the surviving baby as her own."Fetch me a sword," Solomon said. "Divide the living child in two, and give half to the one, and half to the other."One woman embraced his solution. But the other begged Solomon not to hurt the baby and give it to her rival instead. Solomon promptly ruled in her favor, figuring that the real mother would rather give up her child than see it die.As clever as that was, David Lee Roth may have been a bit cleverer—according, at least, to Mr. Roth himself. Here is how he tells the story in a Vimeo video. By the early 1980s, Van Halen had become one of the biggest rock bands in history. Their touring contract carried a 53-page rider that laid out technical and security specs as well as food and beverage requirements. The "Munchies" section demanded potato chips, nuts, pretzels and "M&M's (WARNING: ABSOLUTELY NO BROWN ONES)."When the M&M clause found its way into the press, it seemed like a typical case of rock-star excess, of the band "being abusive of others simply because we could," Mr. Roth said. But, he explained, "the reality is quite different."Van Halen's live show boasted a colossal stage, booming audio and spectacular lighting. All this required a great deal of structural support, electrical power and the like. Thus the 53-page rider, which gave point-by-point instructions to ensure that no one got killed by a collapsing stage or a short-circuiting light tower. But how could Van Halen be sure that the local promoter in each city had read the whole thing and done everything properly?Cue the brown M&M's. As Roth tells it, he would immediately go backstage to check out the bowl of M&M's. If he saw brown ones, he knew the promoter hadn't read the rider carefully—and that "we had to do a serious line check" to make sure that the more important details hadn't been botched either.And so it was that David Lee Roth and King Solomon both engaged in a fruitful bit of game theory—which, narrowly defined, is the art of beating your opponent by anticipating his next move.Both men faced a similar problem: How to sift the guilty from the innocent when no one is stepping forward to profess their guilt? A person who is lying or cheating will often respond to an incentive differently than an honest person. Wouldn't it be nice if this fact could be exploited to ferret out the bad guys?We believe it can—by tricking the guilty parties into unwittingly revealing their guilt through their own behavior. What should this trick be called? In honor of King Solomon, we'll name it as if it is a lost proverb: Teach Your Garden to Weed Itself....MUCH MORE
