ISTM there are at least two possible and distinct purposes to the pragmatarian approach:

  • influencing the allocation of resources to which you have contributed (e.g. taxes)
  • signalling demand (e.g. books on economics or evolution)

I think it is worthwhile making that distinction. The first purpose is a significant improvement over conventional democratic voting systems. It would allow individuals, in aggregate, to shift resources from defence to healthcare, from direct administration costs to education, or from unemployment to infrastructure investment. Currently, you buy a vague, fuzzy package and give up all ability to influence it once you voted.

The second purpose is very different. One reason I am not really interested in Netflix or Amazon movies is that they offer very little in the way of older films or world cinema. Arguably, they base their offer on what people choose to watch, and most want to see popular blockbusters (I guess). But if I could ‘allocate’ my subscription to the kind of movies I prefer, it would send them a signal. If they heeded that signal, I might stay (if not, then I’d leave again). But I am not sure the pragmatarian approach would be superior to a conventional, albeit slightly modified market system, in which I actually pay for what I want to see. Imagine Netflix offered me a pay-as-you-go system, but gave me the possibility of paying a bit more than the standard price for a movie to express my interest in a larger supply of similar movies. Paying the going rate means I’m happy with the offer, paying more means I’d like to see it increased. If I knew they would actually respond to this, I would much prefer this system over the pragmatarian one: there would be a direct incentive for Netflix to respond to my signal. They get more money when I signal my wishes, and they get more money when they respond to them and offer me more films of the type I like (which I then go on to watch).

Written by

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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