All posts by d.anderson

Why are so many car salespeople aggressive to a flaw?

The profession of car sales is among the least trusted in the United States. Some people put off replacing their cars for years because they dread setting foot in a dealership. If customers are dissuaded by aggressive salespeople, why do aggressive sellers persist? For insight, remember the prisoner’s dilemma story about dominant strategies leading to lose-lose situations.

In the context of car sales, consider a dealership with two sales people, each of whom must choose to be pushy or not. Suppose that if both salespeople are pushy, that will scare some people away and they will sell 4 cars per day—2 per salesperson. If  neither salesperson is pushy that will encourage shoppers to visit often and linger longer, leading to sales of 10 cars a day—5 per salesperson. And if one seller is pushy and the other is not, 7 sales are made and the pushy salesperson elbows out the non-pushy one and sells 6 of the 7 cars.

How does each seller see the options? If the other seller is not pushy, a pushy strategy sells 6 cars and a non-pushy strategy sells 5 cars; if the other seller is pushy, a pushy strategy sells 2 cars and a non-pushy strategy sells 1 car. So, given either strategy from the other seller, each seller sells more cars by being pushy . The outcome of this dominant strategy of pushiness is that each salesperson sells 2 cars. Sadly, despite the reasoning behind the pushiness, this outcome is worse for everyone involved than if no one were pushy! A pair of non-pushy salespeople would sell 5 cars apiece, and give each customer a less stressful buying experience. That would be a win-win-win, but it’s unlikely to happen.

Why is Economics the “Dismal Science”?

The real reason Scottish philosopher Thomas Carlyle described economics as the “dismal science” may surprise you. Despite popular stories, Carlyle wasn’t inspired by Thomas Malthus’s prediction of population growth outstripping food supplies (see the post Are Climate Scientists Alarmists?). The origin was actually an essay first published in Fraser’s Magazine in 1849 in which Carlyle denounced economists and lamented the loss of slavery.

The Slavery Abolition Act of 1833 gradually emancipated (freed) slaves in the British Empire, whose many colonies at that time included the West Indies, Australia, India, and Canada. Carlyle focused on slavery in the West Indies, writing that emancipation was a burden for whites due to the resulting cost of farm labor: “Higher wages, massa; higher, for your cane crop cannot wait; still higher — till no conceivable opulence of cane crop will cover such wages!”

Economists in support of emancipation became Carlyle’s adversaries. Carlyle wrote that economics “finds the secret of this universe in ‘supply and demand,’ and reduces the duty of human governors to that of letting men alone, … a dreary, desolate and, indeed, quite abject and distressing [science]; what we might call, by way of eminence, the dismal science.”

In other words, economics was deemed dismal for supporting the freedom of human beings.

–The Dismal Blog

Are Climate Concerns Alarmist?

In the late 1700s, Thomas Malthus expressed concern that future population growth would outstrip food supplies and cause famine and death. That dire prediction has not held true. Starvation is a problem in some parts of the world, but it is largely a problem with the distribution of food rather than its overall volume.

Is the alarm about climate change a similar story? No. Two things to remember:

  • In the case of food supplies, we dodged the Malthusian population trap thanks to monumental changes in food production. The widespread use of new pesticides, herbicides, and fertilizers, along with the development of new farm machinery, have made farms far more productive than in the past. Similarly dramatic improvements in greenhouse gas emissions could limit climate change, but in the climate story the changes have been for the worse—the volume of emissions is increasing.
  • Malthus was making predictions about the future, which is always tricky. Climate change is already here. On the basis of dozens of indicators ranging from the rapid melting of Arctic sea ice to increases in heat-related deaths, the Environmental Protection Agency and climate scientists around the world observe that climate change is occurring. It is not a prediction.

All of this makes the problem of climate change more like the problem of cancer. Given its presence, we should address the problem. The good news is that we are not awaiting a remedy. There are myriad ways to limit climate change once we make it a focus. There are promising policy approaches, international agreements the United States could join, and simple dietary changes that would make a world of difference.