28 Dec 2008

Path Dependency

JD writes in with this:

"Here's an observation on human behavior for you. We take our kids sledding to a local hill. After large snowfalls here in Detroit, the small hill gets pretty crowded with kids and parents. I was struck by the fact that when the hill gets really crowded the chances of someone walking up the hill getting struck by another sledder increases dramatically. (Makes sense, right?)

In any event, the profound part is that most people (90-95%) sled down the hill and then walk straight back up the middle, thereby impeding traffic for other sledders coming down. When very crowded (making space scarce), when one looks up from the bottom, one sees that the vast majority of people are on the top of the hill simply waiting for a clear path to come down. Conversely, a large minority are actually sledding down (much less than the hill could sustain).

Frustrated at this situation (because of her understandable reluctance to send our kids barreling down with increased chance for collision) my wife commented that if the people who came down simply walked over a short distance to the side of the hill to come back up, there would be much less danger of collisions. Also, more people could fit on the hill and actually sled down if, when they reached the bottom, sledders would move off to the side to come back up.

But unable, or unwilling to grasp the notion that there would be more collective fun (benefit) and alot less risk for everyone if people conducted themselves with some sense of order (by walking up the side instead of the middle) the mass simply carries on in the fashion described above causing a lot of waiting, more danger, and essentially a lot less fun than possible."

"Path dependency" is the simple idea that people will walk on a path that has been made, rather than "break trail" somewhere superior, which is costly. Since any path breaker will absorb most of the costs but a small fraction of the benefits (everyone can walk the new path), he does not act. With nobody acting, everyone stays in their "sub-optimal" space.

The most common example of path dependency is the QWERTY keyboard, which is supposedly inferior to the DVORAK keyboard, but people continue to use the QWERTY keyboard because switching from one to the other is too costly (e.g., if I learn to use DVORAK, I have to take my keyboard with me). Although that example is not accurate [debated], this example demonstrates the cost of switching from an inferior standard.

(My favorite path dependency example is the continued use of the avoirdupois system of weights and measures in the US, which is FAR inferior to the metric system. I am willing to dump acre-feet -- even if it takes me 10 minutes to figure out gigaliters -- but I can't talk to other US water people in gigaliters.)

My advice to JD: Stand at the bottom of the hill and tell people to move left and right (to the edges). After awhile, traffic flow will change, and everyone will be happier...

I do this sometimes in grocery stores where there are two lines next to each other. Just stop at the front and tell people behind you that you are waiting for the first available spot. That way, nobody feels anxiety when choosing a line, since they will get to the cashier after the person who came earlier and before the person who came later. (That's why I like bank lines more than supermarket lines.)

Bottom Line: Changing from a sub-optimal equilibrium takes time and effort, but a little effort now will be repaid by a lot of happiness later. Do it for the team (that's how we evolved!)