$100

I’ve got a question for you all, but it’s going to take just a little bit of a set up. But bear with me, if the question doesn’t interest you, I think at least getting there will amuse.

Imagine for a moment that you are out walking with four friends, we’ll call them (purely at random) Shelly, Jim, John, and Kami. You happen upon a hundred dollar bill lying on the ground. Since you all spot it at the same time, you determine that it needs to be divided among the party.

But instead of dividing it evenly, Jim, with a gleam in his eye, suggests another plan. He suggests that the party draws lots and place themselves in an order; 1-5. The first member of the party will put forward a plan to divide the money. Everybody then votes on that idea and if a majority is reached, the money is divided in the suggested manner. If not, that person does not get a share at all, and the second person gets to put forward his or her idea to the remaining three. Again there will be a vote, and so forth. When an agreement is reached, the money is divided. If no agreement is reached, the one putting forward the idea is out, and the remaining members start again. In the event of a tie, no majority is reached, and the proposing member is out.

Everybody agrees to this crafty plan. Everybody also agrees that there will be no hard feelings. Everybody will act in a rational, self-interested manner. If somebody gets shafted, the shaftee will not harbor any ill will (if it will help you star trek fans, assume everybody is a Vulcan).

OK, the lots are drawn and the order looks like this:

1-You

2- Shelly

3- John

4- Jim

5- Kami

So, you get to decide. How is the money divided? You can divide it evenly and are assured that everybody will vote for it. But you only need two other votes, so you could get 33 dollars. Or maybe 34? Is it possible to get even more?

Think about it for just a moment. How much do you think you could really get? Can you get more than 34? more than 40?

The answer may surprise you, but it’s easiest to demonstrate by working backward.

Let’s assume that four proposals were put fourth, and all rejected. It’s now Kami’s turn to divide the money. Since she is the only one left, she is going to keep all 100. No surprise there. Let’s move on to the previous round.

Jim is just out of luck. No matter how he proposes to divide the money, Kami is going to say no, because then there is a tie, and she will get all of the money. Even if Jim keeps one dollar, and Kami gets 99, Kami will vote no.

So John’s proposal gets more interesting. He needs one other vote. Kami is going to be hard to buy because if this vote fails, she will get all 100 dollars. But Jim knows he’s going to get nothing if this vote fails, so he is easy to buy. John can propose to split the money 99 for himself, 1 for Jim and nothing for Kami. Jim, being rational and self-interested, will of course accept.

Moving on to Shelly. Shelly needs to buy two other votes, since she can’t have a tie. John is going to be hard to buy because he’s going to get 99 if the vote fails. Kami is quite easy to buy right now because she knows on the next round she will get nothing. Jim needs 2 dollars so that this proposal looks better than the next proposal (where he gets 1 dollar), so the split is 97 for Shelly, nothing for John, 2 dollars for Jim, and one dollar for Kami.

So your proposal looks like this. 97 dollars for you, nothing for Shelly, 1 dollar for John, and 2 dollars for Kami. If everybody is rational and self interested, they will accept your proposal. In other words you keep just about everything.

Here is a table if it helps.

Rounds

Absurd, right? This wouldn’t happen in real life, right?

I think it does.

Look at how businesses run. Can’t it be argued that this model is a fair representation of what happens? The proverbial 97% net profit goes to CEO, upper-upper management, and shareholders. This argument was just made about EA Games, makes of The Sims and other hits. Thousands of low-level employees (who actually do the work) get the 1 or 2 dollars while the most of profit goes to the upper few.

If you are investing in a company, which one will you choose to invest in? The one that doesn’t make much money because it’s dividing the spoils fairly among workers, or the one that maximizes its profits by giving little to the workers, and more to you?

Before this post gets Marxist on us, I’m not attempting to make a judgment call, just attempting to demonstrate that this type of model works in the real world. (if you disagree, please let me know, I’m very interested to see if I haven’t thought this through all the way). On a small scale it doesn’t work because we value friendship more than a hundred bucks. But when a faceless, unfeeling corporation is involved, we can be rationally, self-interested by proxy. Our bank can foreclose on granny and take her home so that we can earn our .8 percent interest on our savings.

So now that I’ve ‘set up’ things up, here we go with the actual question. Does formal education follow this same model? Does formal education (or the educational process as it currently stands) keep true learning in the hands of the few? If so, is it by intention or by circumstance? My first thought is that this does not happen. We have a public education system. Everybody gets to learn, in fact it’s the law. But is this really the case? What about private schools? What about prestigious universities? Are they admitting and handing out their degrees to only a few in attempt to make them worth more? It can be argued that if everybody had a degree from MIT, that degree would not mean as much. What about when you move things to a global scale? Are the ‘first world’ countries intentionally withholding education? Or is it just circumstance that we have more educational opportunities? The MIT Open Courseware project gives me hope that we are moving in the right direction, but what more can be done?

Your thoughts are welcome.