Decision Auctions aka "How to fairly assign chores, or decide who gets the last cookie"

Bethany and I philosophically bite the bullet on this, which is basically to just agree with your second point: the wealthy person gets their way all the time and the poor person gets what's to them a lot of money and everyone is happy.

If that's unpalatable or feels unfair then I think the principled solution is for the wealthy person to simply redress the unfairness with a lump sum payment to redistribute the wealth.

I don't think it's reasonable -- ignoring all the psychology and social intricacies, as I'm wont to do [1] -- to object both to auctions with disparate wealth and to lump sum redistribution to achieve fairness.

Now that I'm introspecting, I suppose it's the case that Bethany and I tend to seize excuses to redistribute wealth, but they have to be plausible ones.

Taking the word "afford" literally, if you can only afford $50 on the first auction, and you lose the auction, then you'll have an extra $50 on the next auction, and will be able to afford $100. If you lose that auction, you'll be able to afford $200 on the auction after that. I think that the concept you're thinking of is not so much afford, as marginal utility cost. For someone with a yearly income of $200,000, a marginal util is going to cost a lot more than for someone with a yearly income of $40,000. Thus, the richer person may be willing to bid more, because the utils are worth more to that person. It is therefore more efficient (that is, it is a Pareto improvement) for the richer person to win the auction, and give money to the poorer person that the poorer person can use to buy utils elsewhere. And I really wonder at who's deciding what goes in the Google Chrome spell checker dictionary, because apparently "util" is in it, but "externality" is not.

The balance of power is strongly tilted in favor of the wealthier person to the extent they're willing to throw money at the poorer person. Which is to say, that's as it is normally. With the cash in hand, the cost of chores will rise. It shouldn't be as steeply as ThisSpaceAvailable says, so that the poorer person doesn't get wiped out by the richer doing something once a week, but it will still rise. The poorer person is not an indentured servant any way they choose to play it.

Whether this is conducive to long-term happiness or would warp a friendship I don't know, but I have a hard time seeing it as worse than the rich and poor roommates splitting the chores equally for free.

You can bid time instead of money. And internally we count convert time to money in a fixed rate but only in one direction time->money.

As the poorer person, all the money you get from yootling should go into a budget account which you use only for yootling. That way you are guaranteed both that you won't pay more than you can afford, and that in the long run you will win as much as you lose yootle auctions.

Of course, there are situations that raise the prostitution issue even more directly.

"So, honey, just how much of a headache do you have?"

Upvoted for the delightfully flattering implication for my and Bethany's relationship. :)

But, yes, a prerequisite is that everyone think like an economist, where everything you care about can be assigned a dollar value.

See also the core assumptions at the top of Bethany's article [http://messymatters.com/autonomy].

The first person who ran some detection programs on the whole database didn't discover useful hits. I recently wrote them again and asked them to check daenerys as target specifically.

Great question, and upon reflection (I actually looked this up in my PhD dissertation just now!) I agree. I actually can't remember the last time Bethany and I used a joint purchase auction. For some reason it never comes up -- we just each buy things and don't worry about joint ownership. If we did disagree about whether to buy a household item we'd probably just straight up yootle for whether to buy it (with the cost split 50/50 if we did).

This mechanism seems like a Vickrey auction

Looks more like a normal first-price auction to me. "B bids $100, D bids $15, so D 'wins' the bid, and B pays them $15 to go get the kids from their grandma's." The low bidder wins, and receives the amount they bid. In a Vickrey/second-price auction B would pay D $100.

You're right that it's similar to a Vickrey auction in that the 2nd highest bid (in the 2-player case) is used as the price, but it's different in that there's no 3rd-party seller. The good is jointly owned and the payment will go from one player to the other. In particular, yootling is not strictly incentive compatible like Vickrey is (though in practice it seems to be close enough).

Thanks for the pointer to Landsburg! Looks like he worked out a way (by enlisting another economist couple) to have meaningful auctions despite having joint money with his spouse. I predict that system didn't hold together though. I should email him!

In the article I linked to, Bethany argues that separate finances are a requirement to this, and I tend to agree.

A workaround might be having a joint account, AND separate accounts that are used for whatever fun/luxury you each want. You each get $x/month in your fun/luxury accounts, and that is the money you use to yootle with (and pay for dance class, and buy a new sewing machine with, and whatever other luxury, etc)

Use a zero sum point system (MMO model) with an interest system to suit. A cooperative relationship will aim to keep things close to even. Downside is of course this is just a counting method with no real payout, reward, or penalty.

We have a protocol for deciding when to yootle: if the possibility of yootling is so much as mentioned then we must yootle. The only fair way to object to yootling is to dispute that it's a 50/50 decision. If it is a fundamentally joint decision then how would you object? "I want to get my way but not pay anything"? Not so nice. You could say "I don't want to yootle, I'll just do it your way". But that's equivalent to bidding 0, so might as well go through with the yootling. And after 9 years we do have quite efficient ways to conduct these auctions, with fingers or our phones or out loud.

I've lived with other people (either spouses or roommates) pretty much my entire life (30 years), so I feel like I've already acquired the social skills to do without it. Other people's situations may be different. I am generally in support of people learning social skills, so yootling might not be the best answer if it is a replacement for that.

Or just have one piece of paper, and write the transactions there.

The bot doesn't run the money transfer. It runs the auction (collects bids from everybody, displays bids when all have been collected), and runs a random number generator.

We have also used the same bot to play a Schelling Point Game, where someone names a category (eg "a book") instead of a thing to auction, and we all make a guess (e.g "Strategy of Conflict" or "The Bible") instead of a bid. You get a point if your guess is the same as someone else's.

The chance of paying 10x also seems like it constrains the bids to less than a tenth of where people start to lose risk neutrality- in order to bid $100, you need to be willing to pay up to $1000!

Yes, we're super keen to make sure the efficient thing happens regardless of the initial distribution of resources/responsibilities/property-rights/etc. And we use yootling as a bargaining mechanism to make that happen. In general we're always willing to shove work to each other or redistribute resources as efficiency dictates, using payments to make that always be fair.

In practice the sealed-bid version seems to be ungameable, at least for us! None of the problems you mentioned have arisen. My parents have tried this and had more problems but as far as I could tell it always involved contention about what to consider to be joint 50/50 decisions. Bethany and I seem to have no problem with that, using the heuristic of "when in doubt, just call it a 50/50 decision and yootle for it".

In a second price auction the optimal strategy is to bid your true valuation.

If we yootle for repainting the spare room and I bid $1.2k to your $1.5k, we should probably just hire a painter.

Thank you! See above ("Better to not have people feel like their desperation is being capitalized on.") for my response to your first question. And we actually believe that our system is, in practice if not in theory, strategy-proof. It's explicitly ok to game the system to our hearts' delight. It seems to be quite robust to that. Our utilities tend to either be uncannily well-matched, in which case it's kind of a coin flip who wins, or they're wildly different, but we never seem to have enough certainty about how different they'll be for it to be fruitful to distort our bids much.

The strategy of "just say a number such that you're torn about whether you'd rather win or lose" seems to be close enough to optimal.