Morality and Pricing Revisited by Someone Who Thought Much More Carefully About it Than I Did

Today's truly excellent guest post comes from Guest Blogger "Tim," whom I heartily thank for the obvious care and time he put into what you are about to read. -Alex

My thanks to Alex for the opportunity to discuss his recent post on price gouging. I want to make a minor point about transaction costs and then contemplate whether there is a moral rationale for price gouging. I argue that there is.

To reiterate a bit, the argument against gouging laws—the argument that would allow gouging, if you prefer—emphasizes a functional role on the part of prices. When the price goes up in response to scarce supply, it encourages good behavior. Gasoline producers (for one example) see an opportunity to profit and thus swoop in to disaster-stricken areas with their commodity in tow. Competitors see an opportunity to profit and soon follow. Citizens who live far from the disaster, for their part, observe the price of gas increase a bit and thus adjust their behavior at the margin to conserve, carpooling to work or buying a more fuel-efficient car. Self-interest is the driving force here, but it leads people to behave almost as if a benevolent dictator were guiding them. So the stylized argument goes. 

Alex rightly notes that economic models that predict such happy (Panglossian?) results assume “frictionless” transactions. To continue the gasoline example, the assumption is that Chevron can shift its supply of gasoline around nimbly, without incurring extra costs. This assumption is violated to the extent Chevron’s oil trucks are in the wrong place at the wrong time, to the extent it can’t hire enough extra personnel to take on short term work, and any number of other imaginable circumstances. And it is violated when far-off consumers don’t instantly switch to more fuel-efficient cars, even if they would really prefer to. Alex’s consideration is important because, to the extent the assumption is violated (and it is certainly violated) the appealing consequences such models predict might not come to pass. How much is the no-friction assumption causing us to overstate the benefits of responsive prices?

I do not know how to quantify the answer to that question, but my impression is that it is easy to overstate transaction costs and underestimate how responsive firms can be. One fitting and illustrative example of impressive responsiveness comes from Hurricane Katrina. Steve Horwitz analyzes how private firms responded to the disaster and writes (citations omitted):

[Wal-Mart] uses its own hurricane-tracking software and has contracts with private forecasters for the latest information on storms. By Wednesday, August 24, five days before Katrina’s eventual landfall on the Gulf Coast, [its] command center had gone into planning mode, and two days later, when Katrina struck Florida, the complement of personnel in the command center exceeded fifty persons [up from six to ten]. 

Given the frequency of damaging hurricanes along the Gulf Coast and in Florida as well as the large number of stores Wal-Mart has in that area, the company has a well-rehearsed process for dealing with threatening storms. Central to that process is passing information down from the senior-management level to regional, district, and store managers. . . . The company moved emergency supplies such as generators, dry ice, and bottled water from their current warehouse locations “to designated staging areas so that company stores would be able to open quickly.” These staging areas were set up just outside the likely worst-hit areas to facilitate a quick response with minimal danger of damage. For example, a distribution center in Brookhaven, Mississippi, had forty-five trucks in place before Katrina’s landfall. 

Once the storm had passed, the protocol directed district and store managers to relay information about store conditions back up the chain of command to the emergency operations center. Katrina had knocked out the company’s computerized inventory-management system in the areas it hit, not to mention much of the local phone infrastructure, so Wal-Mart associates and managers relied for the most part on satellite cell phones that its own loss-prevention teams brought in as early as Tuesday, the day after the storm. . . . Wal-Mart trucks with relief supplies were rolling into New Orleans on the day after the storm. (514-515)

Anecdotal, but a good example that moves tired tropes about dynamism of the free market out of the abstract. I suspect few people will argue that the Katrina aid not driven by economic incentives (i.e. FEMA’s efforts) would look favorable in comparison. (How much has FEMA improved?)

Admittedly, this point lacks some nuance. Of course, firms are nimble in some respects, and sclerotic in others. I will not dwell on the matter though, because as Alex notes, not much turns on how we answer the transaction cost question. As long as we think of the market as augmenting charity where charity has failed, rather than as an excuse not to engage in charity, the transaction cost matter is no reason to arrest moving prices. (We can think of charitable giving as upward pressure of supply and thus downward pressure on price. To the extent charity solves people’s problems, the opportunities to price gouge—even if one wanted to—vanish.) 

There is a separate question—a moral one. Even if we agree that prices should be allowed to respond as they will, what do we think of the people who profit from the hardship of others? As Alex writes, “We hope that when faced with victims in need, we think only of how we can help, not of how we can use it to our advantage.” Or as another friend of mine put it, are price gougers not taking advantage of people? And are we not entitled to chastise them as such?

Perhaps, but I think the answer is not so straightforward. My reasons involve turning our attention away from the role that prices play in shaping incentives, and redirecting it toward a second function they can serve: transmitting information. And I think we need to consider carefully what a more magnanimous, kind-spirited, generous arrangement would look like. To explain more fully, please entertain a thought experiment.

Imagine yourself as a gasoline retailer in New Jersey after Hurricane Sandy has struck. Two days after the incident, you receive a small amount of gasoline, enough to fill just one hundred cars or so—not nearly enough to satisfy the line that has snaked out of your lot, around the block, and out of sight, one thousand cars at least. What do you do? More specifically, what would be a morally defensible decision rule for deciding who should get the gas?

Consider first the price-gouging alternative, which is, in implementation, an auction. You could incrementally raise the price from its pre-hurricane level of $4 per gallon. As you do, cars in line will turn away depending on how much gas they have in reserve, how much their plans rely on gas, how likely they think they are to find gas elsewhere, and other factors. You could keep the price going up to $5, $10, $15, and so on until only one hundred cars remain and you can meet demand fully.

The auction approach has some features to recommend it. It gives us both a defensible standard for who should get the gas—who values it most?—and a mechanism to figure out who those people are. (Who is willing to pay the most?) There are also some reasonable concerns about an auction. In particular, it seems to benefit the wealthy, who are less likely to balk at high prices.

One alternative that might seem more fair is to keep the price at $4 and simply sell gas to the first one hundred people in the line. After all, they got out of bed early and have been waiting in line for hours. Doesn’t this effort entitle them to the gas? And doesn’t this decision rule seem fair in that it is undertaken from behind the veil of ignorance (roughly speaking)? You didn’t decide who would be the first one hundred people in line.

On scrutiny, I think such reasoning proves faulty. In fact, the first-in-line rule is very much like the auction. Recall that the price of a good is not how much cash you turn over for it, but what you give up to get it. In this hypothetical, the first one hundred people in line are giving up $4 per gallon for gas, but they also gave up time trolling neighborhoods for working gas stations, or just waiting in their cars. This opportunity cost could easily bring the true price they are paying up to the $15 per gallon possibility we entertained above. To remember this fact highlights a certain folly in trying to control a price. You can limit how much green stuff trades hands, but it is rather more difficult to limit how much people will pay for the things they value. Limit their ability to pay in dollars, and they are likely to pay in other ways—in this case wasteful and inefficient ones. And the 101st-1,000th people in line paid something in terms of time, but got no gas in return.

Note also that the “paying” is doing a lot of work in making the first-in-line alternative seem even passably fair. If the first people in line aren’t giving something extra up for the gas, then all we’ve done is jettison a distribution standard—who values gasoline the most?—that, although perhaps flawed, was at least a real standard, and substitute something completely haphazard and arbitrary: who happened to be first in line? Surely the “value” standard is more morally defensible than a roll of the dice.

This brings us to a third decision rule we might entertain, which I shall call the merit approach. The aspiration here is to answer Alex’s call that we think about those in need and how we can help them. This is a laudable intention, but given the number of people in line, it faces an immediate obstacle: how are we to determine who is most in need? The dilemma is not trivial. Surely, if asked, many people in line—certainly more than one hundred—would make the case that they need the gas.

Perhaps we can take it upon ourselves to adjudicate their claims. Who would use the gas to run a generator that would preserve a child’s insulin (per the Zwolinski’s example in Alex’s post), and who would use it just to keep her computer running and connected to the Internet? Surely we should give the gas to the first person.

I think the merit approach faces three problems that are jointly insurmountable.

First, and rather prosaically, it would be difficult to determine what motivates each person’s desire to purchase gas. In our running example, it would require interviewing the one thousand people in line and asking what they will use the gas for—a question that it would behoove them to answer dishonestly. We can easily imagine scenarios in which the task will be more daunting.

Second, and more importantly, even if we had information about individual motives, it would be impossible to determine the broader effects of our choice. To do so would simply require too much information about individual circumstances. Return to the insulin / computer choice mentioned above. On its face, one of these uses seems to have more merit than the other, but we need more information to know for sure. We also need to know what substitutes are available. Does the insulin patient have a next-door neighbor with a working generator and refrigerator? Is there a relative on the way with a trunk full of gasoline containers? Either of these possibilities makes the insulin-preservation use less pressing.

More than just knowing about substitutes, to determine broader impact of our choice would also require knowledge about second, third, and fourth order effects. Consider again the person who wants gas to power her computer. Suppose she wants to get her website, which sells rubber o-rings, up and running again. This still seems to be a matter of secondary importance. But suppose furthermore that she is the region’s leading distributor of unusual o-ring sizes, and that the water pumps being sent to the area to help drain flooded homes require a size only she has in stock. All of a sudden it is easy to imagine the gasoline doing more good in her (profit-seeking!) hands than elsewhere.

The third consideration is the most subtle and abstract. It concerns the role of judgment. Suppose omniscience—that the information problems I engage above were to disappear. Even then, to allocate gasoline according to the merit approach, or anything like it, would require us at some level to make a determination about what use is more deserving than the others. It requires us to do so. How? 

Whatever ethical theory we might employ—Rawlsian, utilitarian, Kantian, whatever—is sure not to be universally acceptable and, as such, would impose our value judgments on others. For us to take up this mantle is, I think, perhaps a small but insidious step down a problematic road, for it surrenders the moral high ground of liberty and pluralism in favor of—I’m not sure what to call it, but something where one person gets to impose his world view on others. For the case at hand, the concession is, admittedly, quite minor. But to the extent we wish to extrapolate from the present example and apply its logic to the grand business of governing on the large scale, it is a consideration that we should acknowledge. There are those who would say the concession is a step toward authoritarianism.

Bathed in these considerations, the “auction” approach looks far more attractive and, we might say, more moral. If we think about it as distributing resources according to an ethical theory, it is a very loose ethical theory and not one that elevates one individual’s judgment above others’. A quote from Hayek is fitting here: “Our problem is whether it is desirable that people should enjoy advantages in proportion to the benefits which their fellows derive from their activities [i.e. value, expressed through willingness to pay] or whether the distribution of these advantages should be based on other men’s views of their merits” (emphasis mine). 

Importantly, the auction approach also goes far in solving the information problems. It removes the incentive to lie, since payment requires you to “put your money where your mouth is.” Furthermore, prices, when allowed to filter through a complex system, aggregate information about substitutes and second-order effects in a way that no purposeful investigation ever could. (This is the topic of a seminal article by Hayek.) To consumers who have substitutes available, as in the refrigerator-next-door example, individuals will value the gas less and therefore be willing to pay less for it. To the extent a person can use a commodity to generate greater social good, it will be more valuable to her and she will be willing to pay more for it, as in the o-ring example.  Thus, we can think about the station attendant’s auction not so much as profit-seeking, but rather as answering a moral question that would otherwise be intractable: “How can I distribute my commodity such that it does the most good?” Then, the relevant consideration if we want to judge the gas station owner is not the extent to which he profited, but rather what he chooses to do with the profits. (Perhaps he turns around and donates his windfall to charity. Would anyone call his price gouging immoral in this case?) 

Note that nowhere above have we seen a line of argumentation that I think is too often wielded in favor libertarian conclusions: the Randian emphasis on property rights and freedom of action for its own sake. I often find arguments along those lines too narrow in focus, often insensitive, and occasionally vulgar. The moral case for liberty can be made on friendlier, and more instrumental, grounds, as I have tried to do here.

It has been said that, when exchanges are genuinely voluntary, the only way to obtain the things you value is to help other people get the things they value. This notion is a sound basis for an economic system. Given how much of ethics is wrapped up in distribution—questions about who gets what—can it be a moral guide as well?

I'm Going to Charge You to Read This, but Only if You REALLY Want To

A multimedia post today! First, for your viewing pleasure, I give you this video on price gouging:

OK, and now a blogger's prerogative: raising questions about something without actually giving any real answers (NB: on immediate reflection, this actually seems like a practice many of us - myself included - could benefit from participating in more often).

First, I find the broad strokes of the economic argument pretty compelling. Higher profit margins might give people an incentive to take goods to the place where they are needed. If, say, canned food is in high demand at the site of a disaster, I might be persuaded to head to my local supermarket, stock up, drive in and sell at a profit. We might question the purity of my motives, but at bottom, I was induced to take a good and provide it to people who need it.

But: the scenario painted in the video assumes that a functioning market sprouts up more or less immediately upon the increase of demand. Here, I think we have good reasons to think that the narrow window in which a profit might be made, the possibility of moral judgment (more on this below), and the inertia acting against those who might create a market stifle its emergence. (I think people doing nothing usually prefer to keep doing that; also, people have - you know - jobs and what not they might not want to leave to take soup to Long Island to make a quick few hundred bucks). All of which is to say that a robust competitive market in, say, ice might not actually emerge.

Law and economics literature often says "assuming no transaction costs..." which I usually choose to read as "assuming things are totally different than they are in the world around us..." Transaction costs are not only just there, but I tend to think that people themselves are walking transaction costs. Economists can treat us as rational maximizers all they want - and many fruitful models have been built on that premise - but a quick look around gives the lie to that assumption as far as I'm concerned.

But I digress, and as a friend of the blog rightly points out, allowing price gouging doesn't mean people can't go in and offer aid and generosity from the goodness of their heart. Maybe they drive down the price being charged by those there to make a profit. But I suspect the interaction between aid and a quickly emerging market is likely to be complicated. A few meandering questions. Does charitable aid prevent the emergence of a market? Does even a nascent market prematurely diminish charitable aid? Does the potential of moral stigma aid threatens profit with undercut market incentives? (Is that a bad thing?)

But wherever we land on the question of profit vs. aid, and whatever theses we advance about the relationship between the two, it seems clear to me that we do often make a judgment about those who profit off of somebody's hardship. I've been trying to think about why this is, but I can't get beyond or around a gut feeling that we think of it as an indicator of a particular kind of selfishness. We hope that when faced with victims in need, we think only of how we can help, not of how we can use it to our advantage. We want to think that it brings out the charity in us and encourages us to sacrifice, not profit.

A couple of things to complicate the picture. First, it's an open question as to whether we are likely to live up to this standard. Second, it represents a particular view of morality with which people are, of course, bound to disagree. My aim here isn't to suggest that judgment of profiteering is necessarily correct, but rather that I think it's there.

As always, I would love to hear what people think about this issue. Should it be illegal? Is it immoral? Why do we seem to judge it so harshly? And what can we do about any of it?

Norms of Courtship, Part 2

Last week, I wondered when texts became the primary mode of dating communication, whether my generation wants stricter rules to govern dating/courtship, and what role internet dating plays in the whole shebang. 

Today, to put it bluntly, I want to ask exactly how much one ought to be able to know about a potential date's sexual habits before ever going on an actual date.

Before I really get into it, some actual questions people answer on OKCupid:

"If a trusted partner asked you to submit to them sexually, would you? Assume that this would involve letting them collar you, command you, and have control over you during sex."
"How old were you when you lost your virginity?"
"You are more likely to have an orgasm via:"
"Do you like sex toys?
"Preferred position: are you a top or a bottom?"
"How big is your porn collection?"
"Do you kiss on the first date?"
"In your ideal sexual encounter, do you take control, or do they?"
"Is it easy for you to achieve orgasm?"
"How often do you masturbate?"
"Do you enjoy giving oral sex?"
"Suppose you have an attractive cousin, and the cousin is also attracted to you -"

No, screw it, I'm not even finishing that last one. Now, I think people should generally be more open about sex than they are, and I think that some of these questions are telling about a person. (I also acknowledge that there is a certain type of relationship that sometimes originates on OKCupid for which these might be extremely relevant answers).

But it's one thing to answer the questions privately because you think that, for example, the frequency of one's self-pleasuring adventures is important information for your total match percentage. It is another thing all together to answer them publicly.



I don't think I'm stepping out on a limb when I suggest the following: Sitting down for a first date with someone whose intimate sexual details and preferences you already knew was a fairly unusual occurrence prior to the advent of internet dating. Knowing these things in advance totally changes the way dating happens. Let's take, as an example, "how easy is it for you to achieve orgasm?" This is normally the sort of thing one learns during a relationship (one imagines from experience more often than not, but that's largely beside the point), rather than prior to ever meeting the person in question. It seems unobjectionable to say that this is unusual, and similarly uncontroversial to say that the change is precipitated by the subtle (fine, not particularly subtle) changes in rules and expectations that internet dating as a platform has contrived.

This may be a simple point, but worth pausing on for a moment before reaching the post's climax (sorry) (actually, no: I'm not sorry). I can totally see how someone could think "sexuality is important, and indicative of facets of someone's personality" and include some of these questions (most of which I assume are user generated). But the knock-on effect has been that people on first dates know far more about each other than one might otherwise expect.



But just because it's different doesn't mean it's necessarily worse. That said, let me suggest two reasons this may not be a positive development.

First, discovering these things is part of the process and even the fun of dating. Anticipation, discovery, mystery, and the unexpected are part of what make dates interesting (at least to me). This is true of the physical as well. For my part, learning what a person likes or doesn't like (etc.) in the bedroom is part of the fun; it's a process of learning about a person that takes place in an intimate, personal space. Taking this out of courtship makes it worse as far as I'm concerned. And yes, I know we could all simply not answer those questions publicly, but let's face it: we aren't to be trusted. We're simply too curious what that cute boy or girl's answer to the salacious question is, and it's all over.



[The Greeks knew all about this; they called it akrasia. To Borrow Alain de Botton's definition: "A perplexing tendency to know what we should do combined with a persistent reluctance to actually do it."]

Second - and relatedly - we're so interested in sex, but it's possible - possible - that there are other important things, too. I worry that if we go into first dates preoccupied by sex (fine, "more preoccupied by sex than usual") we won't give proper attention to other personality traits that constitute compatibility.

We don't always know what's best for us, and even when we do we aren't always capable of the self-restraint required to get it. Sometimes we need rules and institutions to help us get there. When the rules and norms of dating require that you go on a few dates - or even just one date - before you get the answers OKCupid so readily provides, you are forced to be patient, even if reluctantly. You may be at dinner dying to know if your date likes taking control in the bedroom, but you still go to dinner. You still  have conversation; you still learn non-sexual things about the other person; you still learn some things about your compatibility. It's helpful when rules and norms make use take stock of important things we might otherwise be too impatient or selfish to think about.

I'll leave you with that thought: sometimes rules and norms are the restrictions we need to get what we really want. Freedom isn't necessarily being able to do whatever you want to do whenever you want to do it. Rules, norms, institutions, and the like can enable us to make the choices we want to by limiting or eliminating options that are attractive or tempting, but ultimately ill-considered. More specifically, let me say this: if you go on a date already knowing what the person sitting across from you is into in the boudoir, you've missed out on some of the fun before you ever started.

Norms of Courtship, Part 1

At some point during my grad school dating life - I'm not exactly sure when - a switch was made: texting replaced calling as the primary mode of arranging dates, flirting, etc. I can't put my finger on how I started to feel this way, but all of sudden when I would call a woman for a date, I felt decidedly old-fashioned (which isn't always how one wants to feel while trying to get a date). It also took me a while to understand that a text response to a voicemail isn't necessarily a dodge (which previously it had always been). Rules were changing, and I've frankly been slow to catch up.

It made me think of the scene in Swingers where Jon Favreau leaves a series of increasingly embarrassing messages on a potential dates answering machine (warning: this scene is totally painful to watch):

Vince Vaughn and Jon Favreau later said that the reason this spoke to people in 1996 was that Gen X was the first generation to have to deal with the perils of leaving a voice message. It was total treachery: you couldn't win, you could only avoid a loss. 

For my part, I felt I had just started to really understand the art of leaving just the right message (though certainly I had not mastered it). Now the rules have been changed up on me. On the one hand, writing a text doesn't have the challenges of spontaneity, but it has a whole set of norms and rules associated with it that I have yet to discover (and that one worries about discovering the hard way...). 

This was already in mind when I read Tracy Clark-Flory's "Who Needs Casual Sex?!" at Salon over the weekend. Clark-Flory talks about transitioning from the hookup culture back towards something that looks more like traditional courtship, with a gentleman bringing her flowers serving as the symbol for the shift (with him turning down first-date sex as the clincher). 

There's been a lot written over the last couple of years about the hookup culture and changing romantic expectations, whether it's good for women, driven by men or women, good for my generation's future relationships, etc, etc. What seems undeniable, though, is that the rules of appropriate dating behavior are shifting and ambiguous at best, and perhaps even disappearing. 

I certainly don't intend to use this post as a call for a return to the highly formalized courtship practices of our male-dominated past, 

but I do think there is a relationship between our departure from rule-bound courtship and the rise of internet dating. I think we want some degree of constraint, some rules, and some reliable expectations. It's hard to go into a date without any idea if you're playing by the same sets of rules. We all know it would be easier if there were some norms or rules that could help us through. 

And it seems norms have started to emerge on dating websites. 

There are certain expectations about how long before you meet, what sorts of activities are appropriate when you first meet in person, etc. They're certainly variable, but the variability is a little more predictable: if someone marks on their profile that they're looking for casual sex, the expectations change, the rules change. 

I don't know why a more or less stable pattern of norms has emerged around internet dating (or maybe they haven't and I'm just wrong - always a possibility) but not around more "traditional" avenues. Part of me thinks that it was simply an easy supply to meet a growing demand. As I said, I think my generation wants more structure in this area of our lives, and that was an easier need to fill in fora that were already built around behavioral expectations: fill out a profile, and here are the rules guiding profiles; here are what kinds of pictures are allowed for the profile, you must answer x-number of questions, etc. Given that internet dating already had structure to it, we could more easily build new expectations around it. 

That said, I think it goes to far sometimes. To tease next week's Part 2: internet dating has created answers to too many questions. Is it a good thing that one can go into a first date already knowing if their date kisses on the first date? Knowing how many dates they usually wait before having sex? Knowing their answers to perhaps hundreds of (sometimes intensely) personal questions? Tune in next Wednesday for an off day post where I bloviate on those questions. 

What Do Beer, Road Construction and Antitrust Have in Common?

You wouldn't think that that many legal concepts influence what happens when I allow cars to park on my lawn every football Saturday, but - as I hope I am at least beginning to convince you - laws and rules are everywhere and affect everything. So every Saturday, when I amble out to my driveway, set up a sign that says "Parking, EZ - OUT!" and stand there with a beer while people literally drive past me and hand me money, there are any number of systems of rules that are influencing what I do. Let's look at just a few.

Antitrust Law
No, seriously. I live at an intersection, and the owners on all four corners sell parking. And each week we yell or mosey across the street and fix our prices. It's almost always $20 (at least these days - it was less in the dark years when The Blue was awful), but it's still straight-up price fixing. It is, no doubt, a restraint of trade, which the Sherman Act expressly forbids.

I'm not going to spend a lot of time on this because the idea of a game day attendee suing the four of us under the Sherman Act is so patently ridiculous. But there are some actual legal issues that we could spend time discussing if we wanted. Is our agreement a contract? We exchange promises of a sort, that might serve as consideration. Is our commerce within Congress' power? I almost always get out of state license plates, there's a colorable argument it's "interstate." I'll stop, but hey - if you're a contracts or antitrust professor, food for thought for exam questions.

Of course, underlying all of this is what might be considered an economic "law:" supply and demand. The supply on my corner is fixed; we can only get so many cars on our lawns. But demand various on any number of axes. If Michigan sucks, demand goes down. The demand over a given period of time, at least, is different for 12:00 starts and 3:30 starts - they trickle in a lot more slowly for later games. And, as I'm learning all too concretely this year, demand varies a lot based on traffic patterns. Which brings us to:

Federal and State Bond Issues
The bridge between my house and The Big House

is under construction, as is a HUGE portion of the major road leading in from the east. These are paid for by bonds and state and federal expenditure, which are authorized by a complex set of laws. You would think this has little to do with my parking situation, but since the traffic patterns have created new bottlenecks away from my house and decreased the overall traffic on my side of town, these expenditures have made parking on my corner a lot less attractive. I assume that lawn owners on the other side of town and at the new bottlenecks have seen a substantial uptick in their traffic. Point is, infrastructural construction paid for an authorized pursuant to law have had a material effect on how parking is done around my house.


The Informal Norms of Residential Parkers
Yeah, this is a thing. My neighbors and I may all agree to a fixed $20 price at the start of the day, but it's understood that as game time approaches we can lower our prices with reprobation. What happens, you might ask, when one of us bucks the norm and decides to be a rational maximizer and undercut our neighbors? I don't know. No one has in the five years I've lived here. The norms of cooperation are pretty strong.

As are the norms that govern the parkers themselves. I never had to ask anyone to clean up, or to not grill, because the norms of parking - heck, of basic decency - meant that no one ever did something like fire up a grill without asking me first, and everyone always cleans up after themselves. And, as you might already have guessed, these aren't the only norms that influence how I go about my business on Saturdays.

The Rules of Partying
I throw a tailgate for friends on home game days pretty much without exception.

It would be weird for me to ask everyone over and then spend all day in the driveway, don't you think? There are certain expectations and rules of civility that come with hosting a party, and most Saturdays I have to make choices about when I can stay out on the driveway and usher cars in, and when I need - ok, "get" - to go back and have BBQ and some beers with my friends. It doesn't cause problems most of the time, but it's another set of etiquette considerations that play into what I do on Saturdays.

I could probably get more detailed, but I think you get the point. It seems simple. I put on a hat and sunglasses, drag my sign out to the road, open a beer (are there rules about how close to the road I can take a visible alcohol container?), and wave cars onto my lawn while collecting their cash. It's the easiest money I've ever made. But lurking in the background behind even such a fun, seemingly simple thing, there are lots of laws and informal rules that impact how I go about my business. I don't think about them all the time - I do have to get out of bed in the morning - but there they are. Something to think about if you ever come tailgate with me.