Which bum should get the money?

by on February 4, 2007 at 7:53 am in Economics | Permalink

Tim Harford, writing in Saturday’s FT, allows us, as benevolent utilitarians, to ask ten bums one common question, and upon hearing their answers we give a donation to one of them.

I am never one to believe that cheap talk has zero value, if so why would I write (or you read) a blog?  So what questions might be asked?  The bums know the game, so of course they are tempted to lie.  Alex, Tim and I pondered this one over lunch.

1. Alex’s idea: ask each bum "who deserves the money the most?"  If they have repeated dealings with each other, the folk theorem might kick in and the group will nominate the wealth-maximizing recipient and institute side payments.  This may or may not maximize group utility as well.

2. Ask each bum "what are you doing here?", with a provocative tone of voice.  Give the money to the bum with the rudest, least polite answer.  He is least likely to get funds from elsewhere, plus the polite bum is probably a drug addict or otherwise totally dysfunctional.

3. Take advantage of the human proclivity to boast about knowledge.  Ask each bum what is the best way to find or to drink cheap alcohol, and give the money to the bum who shows the least expertise.  This was also an Alex idea.

4. Find the single question best correlated with the results of an IQ test.  Give the money to the stupidest bum, who is likely to be unlucky more than self-destructive.

Alternatively, say you had to tax one of ten rich men, and had one question to ask the group to determine who should pay the tax.  What should the question be, and why is this a harder problem?

Your thoughts on either problem?

1 Donny February 4, 2007 at 8:20 am

Bum Bum Bum Bums John Lee Hookers the King of the Boogie

2 tom s. February 4, 2007 at 9:14 am

As so often with libertarian thinking, both scenarios assume away a big problem in order to focus on a smaller problem.

They assume that (a) one or more bums wouldn’t get together and just “redistribute” your money for you, and that (b) one or more rich men will pay whatever tax you demand. If you were a bum or a rich person, would there be anything wrong with that?

3 Matt February 4, 2007 at 9:30 am

If you really want a single answer for #4 you could probably do a lot worse than “how much money did your parents make?”

4 Tyler Cowen February 4, 2007 at 9:36 am

Keep in mind whatever you ask them, they might lie in response, hoping to get the money…you might get some truth by a question which appeals to their pride…

5 Mike J. February 4, 2007 at 9:57 am


No. As a rule of thumb, pretty much everybody gets thirsty in the same way, to the same degree.

6 William Newman February 4, 2007 at 12:51 pm

Overreacting to your throwaway remark about cheap talk having value, note that there are at least two useful types of information that we can communicate directly: things which are hard to verify, and things which are easy to verify but hard to notice. This distinction is important in computer search algorithms, especially for NP problems, but I don’t know any term for it in nontechnical English, so I will just give examples.

If a professional Chess player tells me that such-and-such opening variation is better, I probably have to trust him. But if he tells me the solution to a difficult checkmate-in-6-moves problem, I can probably check it myself, even if I think he’s a pathological liar: it might take me a little time to check, but much less time than it would take me to find the answer for myself.

For easy-to-check information, cheapness of talk doesn’t much matter. Some stuff on blogs *is* cheap talk: are you truly not convinced that a highly regulated society boosts income inequality? That sounds plausible, but how can I *know*, short of mugging you, dragging you into a time capsule, and waiting until advanced mind-reading electrode technology is developed? But other stuff is easy to check, and stands on its own regardless of whether I trust you. E.g., you pointed out that it’s natural to expect inequality to rise with education and longevity, so that it’s flaky for an analysis to ignore these terms while using correlation of other terms to infer causality. Like Julian Sanchez, I hadn’t noticed that for myself, but once you point it out, it doesn’t depend on whether I trust you.

7 dave February 4, 2007 at 2:25 pm

I think Matt has the right answer to the wrong question. We should tax the rich person whose parents made the most money, since that rich person is more likely to be lucky than successful.
It’s back to income vs. wealth on MR…

8 lee February 4, 2007 at 5:16 pm

tom s.—I think “institute side payments” is Tyler’s/Alex’s way of saying “redistribute your money for you.”

9 Trieu Truong February 4, 2007 at 8:19 pm

If all of them are in fact impoverished (making them “bums”), does it really matter which one gets the donation? Is there really going to be that much of a gain for the world giving the donation to the worthiest versus the least worthy bum?

10 topher February 4, 2007 at 8:36 pm

Poor or rich, the question is the same:

Q: “What is the best thing to ask yourself, about everything you do, everyday?”

Closest to the following answer gets the money (or avoids the tax) since they would do the most with the gift.

A: “What can I do right now to get closer to my goals without moving backwards?”

11 agent00yak February 4, 2007 at 11:33 pm

Having the ten of them tell jokes seems like a combination of Harford’s answer and a way to partially insure that they have a personality that you find pleasing. The best (or most pleasant) joke teller probably is a more successful beggar, so if you wishes you can then take the approach of #2. It should be noted that the approach of #2 is suboptimal when you assume that there will be repeat encounters with the bums.

12 mic February 5, 2007 at 5:32 am

The third solution for bums seems weird for two reasons – if anything, you should give the money to the one with greatest expertise.

First is that if they are spending this money on booze anyway, you want the one most proficient in getting cheap booze to get the money. Otherwise, most of your money goes to intermediaries selling expensive booze, a weird subsidy target.

The second reason is that cheap alcohol and crack are the most efficient means to utility maximization – this is why they are so dangerous. Yes, this recommnedation sounds stupid but so is the “utility maximization” approach when we are talking about doing something for other people.

13 glenn February 5, 2007 at 10:33 am

as each to tell you a joke.
the one with the best joke wins.

is there anything more important than a sense of humor,
than maintaining the ability to laugh and make others laugh?

14 Christina February 5, 2007 at 2:57 pm

My brother-in-law instituted a simple rule-of-thumb for beggers in DC: they had to do something for the money. Typically he told them to dance for it. The responses, positive or negative, were always amusing.

Now that he lives in the Bay Area he finds the bums to be far more aggressive and mean, thanks to a political climate that has canonized homelessness. They aren’t interested in his requests for a jig in exchange for a dollar.

Any time I have ever been approached by a begger I usually offer them actual material comfort instead of money. They never are interested. On one occasion in high school I was out roaming the streets with my friends at 3:30 am for a scavenger hunt when we came across a man who said he needed money for a hot dog. Since one of the items on the list for the scavenger hunt was “buy dinner for a stranger,” we immediately agreed to buy him some dinner and asked what the closest
open restaurant was so we could take him. He replied that no place was actually open, so we should just give him the cash. We only gave him the money once we established that we could still get credit for the meal for the scavenger hunt. That was the last time I ever gave money to a begger.

My all-time favorite begger was a guy holding a sign that read, “Why lie? Need beer.” I applauded his honesty and drove past anyway.

15 Steve February 5, 2007 at 5:59 pm

For the rich problem, why not ask what your favorite designer (brand, car, veblan good) that you own is. If the questioner acts admiringly enough, the nature of a status good will make the rich person want to brag about it. Tax the person who buys the most expensive status good; not only do you not decrease his utility much, but you also increase the utility of every other rich person buying the same good.

16 janya February 5, 2007 at 8:27 pm

Ask each bum what amount of money will make him happy why. The person who gives the lowest number and a reasonable answer gets the money. It’s a prisoner’s dilemma with many participants. Bums will learn to cooperate.

17 yasth February 5, 2007 at 9:43 pm

When you give minimal funds to a bum, you are trying to:
A) lessen suffering
B) get the bum’s suffering out of your face

So for A) just screw the bum and throw it to some vaccinations of kids. (Or if one is population specific an efficient homeless shelter) for B) (which almost all “donations” to bums really are), pick whichever bum most disturbs your delicate sensibilities.

Really it is all a question of goal, and with bums the goal is generally to not be faced with suffering, particularly people that seem to be unjustly suffering. So just give money to the people that bother you the most, just like everyone does anyways. If you want to relieve the suffering of bums give money to a shelter. The market for bums is skewed very much against the non-expert donor.

As for the rich, well they are rich, tax static funds. Taxing towards mobility if nothing else keeps things fun.

18 mirror February 6, 2007 at 2:41 pm

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19 Barb February 10, 2007 at 12:48 pm

How ’bout “which one of you is Bono?”

20 Cameron February 26, 2007 at 2:39 pm

i thought you werent supposed to give money to ‘bums’ as it just encourages their ‘bummness’.

21 不動産投資 July 13, 2008 at 11:38 pm

資金を増やそうとするのに不動産投資をするのが手っ取り早い。日本で不動産で東京 賃貸をさがすのはきわめて難しくシステム開発は日本の会社が良い。

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