Steven E. Landsburg has done it again! In his unimitable style, he raises daily issues and shows how an economist would think of them. Yes, indeed, the dismal science is not as dismal as usually said! This time, Landsburg tackles the issue of queues, of waiting in line. Common wisdom has it that last come is last served: Wait for your turn. But is it that simple? Judging from Brad DeLong's website entry on the topic, it does not seem to be so. To make a long story short, Landsburg suggests that we should turn conventional wisdom upside down: the one who last arrives should get in front of the line. Oooooh!!! I can already see you screaming! Who's that arrogant fellow thinking he deserves the first spot in the line? Well, "wait" a minute and listen to Landsburg: "You spend too much time in lines. "Too much" isn't some vague value judgment - it's a precise economic calculation. A good place in line is a valuable commodity, but it's not ordinarily traded in the market place. And this "missing market" inevitably produces inefficient outcomes."
Since no line-placement market exists (where you could pay the guy in front of you to leave), Landsburg suggests a substitute for it: "Change the rules so that new arrivals go to the front instead of the back." To make his point, Landsburg uses the metaphor of "a water fountain in a city park where a steady gaggle of equally thirsty joggers run by." In the current queue system, each jogger looks at the length of the queue and if it is above a certain level, say 12, decides not to join. If it is below, he or she decides to join. Hence, (with a steady stream of joggers) the queue is permanently restored to 12. This is bad, indeed.
What if we send the newcomers to the front of the line? Well, the outcome under a steady stream of joggers is that nobody would join the queue while somebody is still drinking (would you?). Hence nobody wastes time waiting. Well you may argue that a lot of people never get to drink. Look at the margin: Under the traditional queuing system there is also a lot of people who never get to drink! Under both systems the fountain is in constant use, serving exactly the same number of joggers.
Assume now a more realistic scenario where the flow of joggers is no longer steady but random. Say both the arrival times and the time it take to drink are random. Well, if, when you arrive, the line is short enough, you join until a random batch of new arrivals pushes you back and you leave. If the line is short, there is a chance that you get to drink provided it clears fast enough. If not, you leave. Hence, the fountain is always busy which is what you would want (what's the purpose of a fountain that would never be used!).
Of course, there are some assumptions underlying all this. Landsburg lists them (information, enforcement etc..). But, the odds are fairly high that the new system still outperforms the traditional one.
By the way, do you have any real life examples where Landsburg's proposal would indeed make all of us better off. Let me know! We may start a new venture.
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