Framing Examples: eBay for Losers
Us framing types are fond of saying that there are many conceptual structures missing from public discourse, and that liberals would have an easier time of things if those ideas were more prevalent. A concept I’d like to hear more of is the dollar auction. A dollar auction is a scenario invented by game theorists to model a certain type of human interaction, much like the Prisoner’s Dilemma game was invented to model the dynamic between cooperation and self-interest. I first read about it in The Prisoner’s Dilemma by William Poundstone. The excerpt from the book that introduces the dollar auction is online, but here’s my retelling of it:
Suppose I’m at a party with George and Donald. I pull out a crisp dollar bill (or twenty dollars, if you’re unwilling to suspend your disbelief) and crinkle the bill a little so that they hear the sound of money and give me their attention. Then I explain the rules of the game:
I am auctioning off this dollar bill. Whichever of you bids the highest wins. But there’s a catch: the person who bids the second highest also pays me what they bid, and they don’t get anything. Bidding starts at a penny.
George has always been one for taking initiative, so he goes first: “One dollar for a penny? Sounds like a deal to me. I bid a penny.”
But Donald knows opportunity when he sees it. He bids two cents.
Now George is out a penny, which is not a big deal, but there’s no reason to let Donald win at this point. He goes to three cents.
Donald could give up his two cents which, again, would not be a big deal, but now a little bit of momentum has built up. Pretty soon, bidding is up to fifty cents. The competition is more intense now. The goal of the players is now no longer just to get a dollar for cheap, but to avoid losing money. Psychologically, losses are felt more deeply than gains, so players are focusing on the losses.
Now the bidding is approaching a dollar. George bids 99 cents. When the bid was a penny, all the focus was on winning, because who cares about losing a penny? Now, all the focus is on not losing, because who cares if you get a dollar for 99 cents?
Donald bids a dollar in order not to lose 98 cents. There is no way George can win money now, but it’s better to lose a penny than 99 cents, so he bids $1.01. There’s no rational reason to ever stop, and yet the auction was so innocuous at first! What started out as a sure win is now a contest to see who can cut their losses.
The game theorists who invented this game apparently tried it at parties, with one dollar (back when that was real money). They reported selling the dollar for $3 or even $5, and husbands and wives going home in separate cabs. I believe it, though I’ve never tried it personally.
It’s an elegant model of so many aspects of human interaction: addiction, co-dependance, etc. Anyone who’s been in a situation where they’ve said, “I’ve invested too much to quit now” or “I know it looks bad, but we’ve got them on the run!” has been in a dollar auction.
Now then. This is a frame–a conceptual structure that you can use to interpret things you experience. It’s a model you can use to think about situations, to come to conclusions that may not have been obvious without that model. It differs from most other frames in that you’re very conscious of using it (whereas you may not always be aware of the things you frame as games or forces of nature). The Iraq war sounds pretty damn hopeless when you conceptualize it as a dollar auction:
INSURGENTS: They’re invading our country! If we bomb some of them, they’ll go away.
ARMY: They’re bombing us! Send in more troops!
INSURGENTS: They sent in more troops. That must mean they’re scared! Increase the bombings! We’ve got them on the run!
ARMY: Dammit, they’re bombing us even more now. Well, let’s put some more troops in. We’ve invested too much to quit now.
And indeed, the way things are going right now, that does seem to be the behavior pattern that is taking place, but it is hard to realize that without the idea of the dollar auction to put the behavior into perspective. There’s no graceful way out of a dollar auction, and it takes a lot of strength to come to grips with the fact that if you keep going, you will keep losing. Players have tons of short-term incentives to ensure their own long-term ruin.
This is not a concept that is totally foreign to public discourse. There are many related ideas, but none of them have the same level of precision as the dollar auction. Some of these ideas are well-known, so you could use them when you go on TV and know that you’re being understood by the living-room denizens of America. Others have found less purchase in public discourse. Here are three related frames that come to mind:
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Vicious Cycles are frequently brought up in public discourse. It’s a vague term for any situation that recursively gets worse over time. It doesn’t necessarily involve people. The dollar auction is more specific about what the cycle is, who’s doing the cycling, and how exactly it’s vicious.
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Races to the Bottom are, as far as I can tell, confined to political discourse: two parties, candidates or factions are involved in some competition whose very goal is ignoble, or the means both sides are using are taking them to an ignoble non-goal destination, even though their intentions are good.
I like the “race to the bottom” frame because its vivid imagery packs a punch. It conjures up unpleasant splatting sounds. But I’ve got a little quibble with “race to the bottom”. Maybe I’m thinking about it too hard, but the dynamics don’t make sense. In a race, all the action is generated by the players–they’re the agents in the frame. A downward race is dissonant to me because “downward” makes me think of gravity, and if two players are just falling toward the bottom, that’s not a race because the agency has been removed. No one says “fall to the top”. Of course, it must make sense in some way, because people say it.
On second thought, it could refer to a race down an incline. Gravity still does most of the work, but it’s a legitimate race, and plus it brings in overtones of a related concept: the slippery slope. However, in my head, I still imagine a vertical plummet.
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Boiled Frogs. Apparently if you put a frog in a pot of water and heat the water, the frog won’t notice it’s being boiled until it’s too late. Whether that’s a biological fact or not, it’s a useful analogy for understanding crucial aspects of human perception. We tend not to notice worsening circumstances until we’re done for. I’ve never heard this frame used outside a political context. Maybe because it’s kinda gross.
The difference between the boiled frog and the dollar auction is that there’s only one agent. They both have an aspect of gradual, subtle tragedy, but the frog is being boiled by its environment (the hot water), not by another frog that is itself being boiled. The dollar auction is more like two snakes who eat eachother’s tails until they’re eating eachother’s heads. It’s the evil twin of Escher’s “Drawing Hands” picture.
Speaking of which, another term I’d like to see get worked into English is something that expresses the opposite of a vicious cycle, as in the “Drawing Hands” picture. Sometimes a situation recursively gets better and better. What’s the word for that? A blissful cycle? A delicious cycle? Mutually-Assured Construction?
July 17th, 2005 at 12:25 pm
Love your title.
In The 7 Habits of Highly Effective People, Covey uses the term virtuous cycle as an opposite to a vicious cycle. At least, I think that’s where I heard it.
July 17th, 2005 at 2:19 pm
The “race to the bottom” frame seems particularly salient to the debate over whether the (admittedly noble) goal of attracting businesses and jobs to California warrants the decidedly ignoble agenda of slashing workers compensation, overtime pay, a decent minimum wage, health care — and all those other things that us progressives believe workers deserve but, as Republicans are relentless in pointing out, “raise the price of doing business.”
I’ve definitely heard the phrase, “We can’t win a race to the bottom” uttered by certain progressive candidates in the context of this issue, and although I could not agree with it more strongly, I’m not sure it ever resonated with voters because it is not, as Democratic candidates are prone to (mis)use it, a stand-alone argument. What’s so cool about the dollar auction is its potential to flesh out this line of reasoning a bit further. Let’s say that we could swipe 10,000 industrial jobs from State X if we promise businesses that they won’t have to worry about that pesky thing we call “overtime pay.” In response, State X offers to slash overtime pay and hold off on bringing their minimum wage in for that COLA adjustment it was due for. So California bids a COLA adjustment, overtime pay, workers comp, a partridge in a pear tree…you get the idea.
The important point is that in the end, the detriment to workers far exceeds any number of jobs that we could have attracted through a “race to the bottom.” I’d also love to see progressives make better use of the dollar auction frame on a national scale with the debate over how best to address outsourcing.
August 4th, 2005 at 2:24 pm
Great post. I think I’m going to try it as a bar bet since I know a few people who can’t quit when they’re behind. Also there’s not a whole lot of common sense when people accept bar bets.
BTW- It was nice meeting you at Drinking Liberally.