Critics of the economics profession often accuse us of “knowing the price of everything and the value of nothing.” But economists also often antagonize a far larger group – ordinary people who barely realize our profession even exists. How? By asking about Willingness To Pay (WTP). How much extra would you have to earn to add 20 minutes to your daily commute? How large of a fare discount would be required to get you and your husband to sit separately on an airplane? Part of the complaint is that questions about WTP are dehumanizing. The main complaint, though, is that monetizing emotions creates conflict. Social ties are so important that it’s best not to price human feelings.
Perhaps. But I can’t help but notice a wide range of cases where thinking in terms of WTP smooths social relations and defuses conflict. Consider: In a typical day, events occur that make you angry – and angry people are unpleasant company. When angry, many of us “take it out” on whoever’s around. Even if you don’t, you’re probably no fun to be around when you’re angry.
What does this have to do with WTP? Simple: Most of the daily indignities that make us angry are worth next to nothing in dollar terms. Someone cuts in front of you in line at the supermarket. Well, what’s your WTP to wait for an extra two minutes? The milk goes bad. Well, how much does a gallon of milk cost? You don’t feel like changing the oil on your car. Well, what does Jiffy Lube charge? Commercials aggravate you. Well, how much does the premium version cost? I can’t tell you how many times I’ve seen wealthy individuals rage over $2 problems.
If you respond, “There’s a disconnect between how we feel and WTP,” I completely agree. My point: If you value social harmony, you should try to bring your anger into line with your WTP. Especially over the long-run, this is a choice. When problems arise, you can train yourself to monetize them. Strive to replace thick description of an outrage (“This jerk in a Mercedes cut me off right before the light turned red, so I was stuck at the Route 50 intersection until the light changed again – and you know how long that takes!”) with a thin price tag (“I lost $1 of time”). This won’t instantly calm you, but with practice you will gain perspective.
Why monetize your anger? In slogan form: Because $2 problems just aren’t worth getting angry about. Say it, believe it, and eventually you will (kind of) feel it. It may seem Vulcan, but it will make you a better human being.
READER COMMENTS
Rob Wiblin
Jun 27 2019 at 11:56am
Closely related to question 1 here: A simple checklist for overcoming life and career setbacks.
Douglas Scheinberg
Jun 27 2019 at 12:04pm
Sometimes $2 is worth getting angry about, because it’s not just your $2 one time, it’s $2 from a lot of people over and over. If someone can rip you off for $2 and get away with it, what’s to stop people from doing it again until $2 turns into $20 and then $200? Defend your Schelling fences!
Jon Murphy
Jun 28 2019 at 10:16am
Monetizing your anger can help one decide what fences to defend and what to abandon. Resources are scarce; if you devote time and resources defending $2 fences, you’ll be unable to defend $2,000 fences.
Besides, Schelling signaling is only valuable if it signals something important. I know people who fly into a rage because the washing machine plays a little tune when it is done (and the cost of stopping it is not that expensive; it’s a setting one has to set). What does such defense of a fence signal? What do gripes about Youtube commercials or traffic accomplish? What does flipping out in a Supermarket line accomplish? They do not signal anything desirable. In some cases (like traffic), it may lead to unintended consequences (accidents and road rage).
Indeed, society has evolved mechanisms to discourage small anti-social behaviors. Failure to adhere to these societally acceptable prescriptions for the problems is more likely to give the signal you are not a cooperative member of society rather than “we’re not going to take it!” As Adam Smith says, even if you are justified in your anger, if your response is so disproportionate to the act, the sympathy of observers may fall with the one who caused the injury (the one you’re mad at) rather than you.
Jonathan Wheelock
Jun 27 2019 at 3:13pm
While I won’t deny the usefulness of this type of framing, since I agree that the majority of what makes most people angry is relatively inexpensive… That this framing seems to justify/legitimize throwing a shitfit when it is something that is relatively costly makes me question its validity.
Marcus Shera
Jun 27 2019 at 7:22pm
If someone cuts in front of me in line, I’m usually not angry at the time lost, rather I’m angry that some person would act improperly (or at least a mix of both). There’s a reason we don’t already have Coasean bargaining in line cutting. For some reason, our queuing conventions are where they are. I don’t think I would pay anything to get my place in line back simply because it’s just “not done”. Usually, we have a sense of where things should be and get uncomfortable when we deviate from that. (See Smith 1759) The idea presented here has its merits, but anger is not a hedonic frustration like a baby refused her bottle, but rather a disruption of our moral aesthetic sentiments. That’s the real meaning behind “the price of everything but the value of nothing”.
Henri Hein
Jul 1 2019 at 2:40pm
Marcus, agreed. I can verify this by observing that I get almost equally upset when I see someone cut in a line in which I am not waiting.
Eli Eby
Jun 27 2019 at 11:37pm
I know what you mean.
I think some might respond that their anger has righteousness at its core. They’re fixing an unfair world. They wouldn’t pay $2 to not be cut in line at the store, but everyone would be willing to pay much more to live in a world where people didn’t cheat in that way.
IVV
Jun 28 2019 at 10:53am
Maybe the causality is being looked at backwards. Not “What are you willing to pay to no be cut ahead in line?” but “What are you willing to pay to cut other people ahead in line?”
Then, “What are you willing to pay to enforce those fees on others?”
Floccina
Jun 28 2019 at 4:46pm
And as your income rises you should ignore more small dollar costs. Buy that time you lost back by hiring people to do your stuff.
OriginalSeeing
Jun 28 2019 at 5:47pm
The $2 can also be replaced with an equivalent good like an ice cream cone.
In reference to Tranquility for A Dollar: many free phone apps and games today contain lots of ads but allow you to permanently disable all of the ads if you pay a one time fee of $4 or so. These are even stronger examples to the tranquility idea because the cost is very low and a one time purchase. Spending $20 to do this to all of the apps on your phone that you see annoying ads on could be worthwhile.
A few phone games I’ve played offer you temporary bonuses in-game if you choose to stop playing the game and watch an ad for 30 seconds. They may even offer you the ability to do this 4 or 7 times all in a row for a list of different bonuses. However, some of those game also give you the option to pay a one-time fee of $10 to remove having to watch the ads ever again any time you click on those temporary bonus buttons in the future. The $10 cost can feel like a lot for a silly phone game that was supposed to be “free”, but it removes having to watch 2 to 3.5 minutes of ads up to several times a day and even replaces that time with playing the actual darn game.
Some games also use a clever scheme where they offer you massive permanent bonuses in-game for making any one single purchase at all. It’s not a subscription cost or anything like that and their lowest priced purchases are often $3 or so. The benefit of making that one single $3 purchase can be extremely high even if you refuse to buy things inside of phone games or if you don’t value any of the other purchases inside the game. Players in those games will often say things like , “I can’t stand people who buy subscriptions in free game or pay money for in-game items. They completely ruin the game for the rest of us… but you should totally do a one-time $3 purchase for that massive bonus. Look how huge it is!”
I also recently saw an amusing sort of inverse to the situation of paying a few dollars to gain Tranquility, or just an exploitation of the concept. I wonder how common it is. A while back I had a free pdf app with text-to-speech which I really enjoyed. However, they switched the app from being free with the option to pay to remove subtle ads to being purchase-only with a $3.99 cost. It also mysteriously disappeared from my tablet at some point. After searching for a replacement, I found an app that was functional but pretty gross and disappointing compared to the original. This barely passable app also contains very annoying ads. I can remove the ads by paying $10 …
Phil H
Jun 29 2019 at 2:28am
I think this is the same point that has been made above, but in terms of a study: it’s the Israeli kindergarten late pick-up study. When you monetize something, you legitimize it.
Of course, we should see as legitimate many more things than we do. But readjusting our sense of what is legitimate and what is not is a major program, and hard to do over a $2 problem.
Peter
Jun 30 2019 at 12:10pm
Great article, but what does “it may seem Vulcan” mean?
Henri Hein
Jul 1 2019 at 3:35pm
Vulcan’s are known for placing logic above emotion.
https://youtu.be/mzUiRLROQjc
Tom West
Jul 1 2019 at 5:25pm
While managing one’s anger over the relative triviality of every loss or annoyance is almost certainly good for one’s personal happiness, I suspect that it’s catastrophic for society as a whole.
I look at my wife, who for certain category of annoyances gets angry all out of proportion to the loss (she *hates* even trivial bullying). The net result: I am definitely a happier person than her. However, every place that she frequents (be it our family, her workplace, our friends, etc.) are definitely happier places for everybody else besides her because her outsized anger has discouraged the the casual, just inside acceptable (except to her), cruelties that people are prone to in times of anger, stress, or just plain meanness.
(Oddly enough, the people whose long-term happiness benefits the most are often those who were doing the bullying and were the subject of her wrath. Being less mean is generally conducive to greater happiness, even if it was induced by fear :-))
So, while I agree with Bryan’s thesis in general, and generally follow it (I’m pretty mellow in general), I suspect the long term health of society depends on those willing to challenge minor injustices all out proportion to the damage that any one individual incidents causes.
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