Would you trust the market to name your baby?
Have you ever been responsible for helping to choose a baby’s name? If so, how was the decision made? Was it made by voting? If so, this would explain why so many people have stupid names…
Boaty McBoatface. That was the name chosen by the British public when asked to name a new scientific research vessel in April 2016. And of course, it was. It’s funny! You see, when you ask a lot of people for input on a topic that is not that important to them you’ll get a great deal of silly inputs. — Aran Rees, The stupidity of crowds
Let’s imagine that your significant other is pregnant. The two of you decide to crowdsource the baby’s name. Except, you want to filter out all the people who don’t actually care what your baby is named. So you decide to replace voting with spending.
Your friends and family come up with a list of over 400 potential names. Here are the rules of the “game”…
1. Each participant can spend as much money as they want on their preferred names.
2. Participants can see each other’s allocations.
3. Participants can change their allocations as many times as they want.
4. There’s no time limit.
When no more “pareto improvements” can be made, whichever name has the most money will be selected. Assume that all the money will go into a college fund.
Is there an optimal strategy? Is there a “legal” way to “cheat”?
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10 pages later…
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Why did it take you so long to actually discuss the best strategy? Let’s say that there 100 participants and 400 potential names. You think the best strategy is to put all your money on your most preferred name. But what are the chances that your most preferred name will be the group’s most preferred name? If the chances are very high, then this completely negates the entire point of the group.
Let’s say that your preference is for 10% of the country’s resources to be used to produce computers. What are the chances that your preferred division will be the market’s preferred division? If the chances are very high, then this completely negates the entire point of the market.
The premise of allowing more people to participate in the baby naming process is that the selected name will be more useful to more people. If any given person can correctly predict the name that will be more useful to more people, then this negates the very premise of group participation.
Representation is fine when the representatives can correctly predict everybody’s preferences. Personally, I’m super skeptical about the ability of representatives to correctly predict everybody’s preferences.
I really appreciate the premise of allowing a larger group of people to help decide a baby’s name. Because I really appreciate this premise, I’m pretty sure that the best strategy is to optimally hedge your bets. I’d divide my dollars among 20 or so of the best names. It stands to reason that 1 of the names will be closer to the group’s preferences than the other 19. Still though, the chances aren’t that great that one of the 20 names will be the group’s most preferred name. So I’d see how the 99 other people distributed their dollars and then change my own allocations accordingly. Everybody would do the same until no more changes could be made. Whichever name had the most money would be the group’s most preferred name. This would be the name that is the most useful to the group.
Of course, what are the chances that the name that’s most useful to 100 people will be the same name that’s most useful to 300 million people? Larger markets are always better than smaller markets. Logically, nobody’s going to have the time or the money to help name every baby and website and product. But everybody should have the opportunity to help name any baby/website/product.
Personally, I spend absolutely no money on makeup. This means that I have absolutely no influence on how the millions of makeup products are ranked. Which is perfectly fine with me! So if anybody could participate in the naming of some new makeup… I wouldn’t personally choose to do so. But I guess that many other people would be happy to. Just like many other people are happy to spend their money to help rank makeup products.
We can reasonably guess that the most useful products would be given the most useful names.
