Bagels and Honesty

p2pnet.net Feature:- Steven D Levitt is one of those people who are capable of annoying large numbers of very important people. He's a “rogue” economist who doesn’t know much about the stock market, interest rates, unemployment or taxes.

But what he does do very well is to examine social phenomena, study the data and come to a conclusion about why things are the way they are. (Reality can be dangerous).

There are some amazing insights in his book Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, and one example stands out above the rest:

The bagel guy.
It seems one of the most exciting studies into honesty was conducted completely by chance by a man named Paul Feldman.

In his job analyzing weapons expenditure for the US Navy, Feldman would bring in a basket of bagels and cream cheese for his co-workers. The bagels became popular through out the building, so to recoup some of the costs he put out a little basket and a sign with a suggested price. His collection rate was about 95%.

Then he quit his job to sell bagels by donation. Within a few years he had 140 offices with a basket of his bagels and a cash basket to collect the money. He was making more than he did as a research assistant.

Feldman kept incredibly accurate data on his bagel business and in so doing gave the world a fascinating look at “white collar” crime.

From Freakonomics
“In the real world, Feldman learned to settle for less than 95 percent. He came to consider a company 'honest' if its payment rate was above 90 percent. He considered a rate between 80 and 90 percent 'annoying but tolerable.' If a company habitually paid below 80 percent, Feldman might post a hectoring note, like this one: 'The cost of bagels has gone up dramatically since the beginning of the year. Unfortunately, the number of bagels that disappear without being paid for has also gone up. Don’t let that continue. I don’t imagine that you would teach your children to cheat, so why do it yourselves?'

So, if we accept Socrates’ theory that people are basically honest, even without someone forcing them to be, and we look at Paul Feldman’s 87% average collection rate, what can we learn about the entertainment industry going to the wall because of file sharing?

The RIAA would be better off stopping the sue ‘em all campaign and putting a PayPal button on their website.

Let’s think about that for a minute – 87% of people will pay $1 for a bagel if you put out a jam jar with a hole cut in the lid, so why wouldn’t the same number of people pay 50c for an MP3 if you give them a PayPal link?

Let’s think about this some more. Does anyone believe PayPal, for instance, couldn’t come up with a secure payment model that could be built into p2p applications? This is a high volume model so we’ll bring PayPal’s cut down to 5c per “donation”. The code is encrypted, just like PayPal’s current link generators so it can be given to p2p developers with instructions on how to hook it into their clients’ media libraries.

So now, along with your Artist, Track, Duration-type file data you have a “Paid $X.XX” field.

But where's the incentive to pay? We already know 87% of people will pay SOMEthing if given the opportunity to. What about the other 13%? What if they all only pay $0.01?

Simple – use the existing p2p model.

If you’ve ever visited the “Requests” forum of a private BitTorrent tracker, you’ll be used to seeing comments such as “Get a better UL ratio before requesting something dude”, or “You’ve upped fuck-all, get lost!!!11!”.

How about being pushed to the back of an eDonkey queue because someone else had more credits?

Or, have you ever looked at the painfully accurate statistics your p2p app generates for everything that can possibly be measured?

Yep. We love the statistics and hate leechers. So what happens if your donating habits are factored in next to your public share ratio? What happens if the guy with the 60mb cable connection decides he’ll give priority only to people who have a “good” donation score?

What happens if people can not only see your files, but also how much you paid for them?

Or if you want to think in REALLY radical terms, what would happen if the RIAA ran servers of their member record companies’ entire back catalogs available to anyone with an average donation of $1?

It’s called free market capitalism and p2p networks are frighteningly perfect for the job.

The entertainment companies will LOVE the idea. After all, they're the ones telling us how important a free and honest market is to the starving artists of the world. So let's have this capitalist’s utopia where everyone pays what they think something is worth and the best artists make the most money!

How much complicated tax legislation could be avoided if artists lived on “personal donations” and “gifts”, which are non-taxable? Even more money to the artists who are already willing to take the risk of living at the public’s whim!

And best of all, the Big Music cartel can keep its education programs in the schools, except now it’ll be teaching how important it is to be honest and to reward people for their hard work – a true public service that will affect everyone in their day to day lives.

Unfortunately, Paul “Bagel Guy” Feldman’s records show some disappointing statistics: the higher up in the corporate ladder he delivered to, the less people donated. (Perhaps being a tight-arse is a prerequisite for being a ceo?)

But that doesn’t matter because we’re not talking about executive’s honesty. We’re talking about you and I, The People. The mums, dads and children. The little guys. The ones with the power to buy a CD or use p2p software. The customers. The ones who matter.

Let’s keep thinking about this.

According to Steven Levitt, the data are there to back up the concept.

Socrates knew centuries ago that people where basically honest.

Artists reading this – tell your management you want a PayPal button on your website.

If it’s there, I’ll use it.

Alex H, Sydney, Australia - p2pnet
[Alex is an operations manager for an ATM (automatic teller machine) supplier and he specialises in infrastructure development and maintenance, and logistics. He’s also an(other) active member of the Shareaza community.]