Monday, July 24, 2006

The Power of Incentives

Here's an odd example of how incentives matter. I have two cats. One of them has some intestinal problems, and as a result the healthy cat doesn't like to share litter pans with her. The problem is that the healthy cat will instead urinate on anything that resembles a plastic litter pan, litter or no. For example, an empty plastic container, a plastic mat for an office chair, etc. Naturally this is unpleasant to deal with, so I have built a cat tower for her with a litter pan on top. Only she can climb up to this litter pan, because the sick cat is old and not so agile.

In order to persuade the healthy cat to use this new litter pan (instead of other objects), I have taken to giving her small treats after she uses it. This has had an unforseen effect, however. She now seems to use the litter pan about five times more often than she did before. She used to urinate maybe four to six times a day. Now she seems to urinate around twenty times a day, each solidified clump of litter being very small. Of course, that also means she gets treats twenty times a day.

On a couple occasions she has tried to fool me--she jumps up on the tower, scrapes around in her litter, but does not urinate. Then she makes her cute "questioning sound", looking for a treat. I've probably been fooled by her a few times, but I don't mind so much, since she is now using the litter pan.

Even non-humans respond to incentives!

Thursday, July 06, 2006

Blogging has ceased while my wife and I complete the move into our new house in Nashville. I hope to pick it up again soon.

I will make the brief observation that housing markets are interesting, particularly regarding realtors. One would think that technology would have mostly eliminated the need for agents, except insofar as they are useful for negotiations. It ought to be easier for sellers to list houses and for buyers to shop for houses than it currently is. Instead, real estate agents (both for buyers and sellers) still act as important middlemen. There are even sites that facilitate lending between individuals (i.e., you loan someone $10,000 directly, with terms decided by us, and no bank as middleman/risk aggregator, which sounds like a terrible idea, but then I'm very risk averse). There are, of course, ways to look for real estate without a buyer's agent, and one can go to buyowner.com instead of hiring an agent, but most people stick with agents and their closed listing services. There must be an opportunity for some clever entrepreneur here.