14 October 2006

Why you shouldn't install that bullguard on your car

I was just driving down tonight along MG road, and there was this pesky guy in a Maruti Zen who was driving at, like, walking speed for no rhyme or reason and slowing everyone down. I thought to myself, "if I hit this guy from the back, he'd get smashed up real bad. And my bullguard will protect my car. Go for it Saattvic, go for it." Then the boring side of me took over. I just swerved past him and indicated that he should drive on the left side of the road.

But here's the really wierd side of me. I started thinking about economic methods and their application to that situation.

In particular, I thought about the incentives at work that determine the rashness of our driving. Look at it this way. A person will choose a particuar behaviour type if the net benefit (in terms of satisfaction) he recieves from that behaviour is more than that he recieves from any other type of behaviour. Lets say, hypothetically, there are two behaviour types as far as driving is concerned - safe and rash.

Now lets look at the net benefits recieved from both types of behaviour. If you drive safe, you recieve the moral satisfaction of obeying traffic rules and generally being right. Lets denote this by M. There are no real costs involved in safe driving, so your net benefit would be M.

Now, if you drive rashly, the situation is a bit more complicated. You recieve the benefit of a thrill; the satisfaction of an adrenalin rush, if you may. Lets call this T. The costs are of two types. Firstly, you might feel guilty about breakin the law, or being a nuisance to other drivers. There is a moral cost involved. Let this be G. Also, there is the chance that you could have an accident. Say, there is a probability a that you will have an accident if you drive rashly. a will lie between 0 and 1, with 0 signifying that there is no chance you will have an accident and 1 signifying that you will have an acident with 100% surity. If, for example, a is .3, it means that you have a 30% chance of having an accident if you drive rashly. Suppose that if you had an accident, the damage to the car would cost you D (in terms of dissatisfaction. Look at it this way. If you have an accident, you'll have to pay to get the car fixed. The cost would be the dissatisfaction of going through the repair process plus the dissatisfaction that would arise from parting from the money). Scince you'd have to undergo a cost of D with a chance of a, you'd expect on average this cost to be aD. For example, if the damage costs, say Rs. 10000 worth of dissatisfaction, but the damage happened only 10% of the time you drove rashly, you'd expect 10% of Rs. 10000, ie Rs. 1000 as a cost everytime you drove rash. So, the net benefit (benefits - costs) stand at T - G - aD.

Now, you would choose to drive safely is the net benefits of driving safely outweighed those of driving rashly, ie.
M > T - G - aD


Similarly, you'd drive rashly if
M < T - G - aD


Here's where the bullguard comes in. If you have a bullguard installed, the damage caused to your car will be less than if you didn't have a bullguard installed. In other words, if you install a bullguard, you reduce D, which means you increase T - G - aD. You increase the net benefit from driving rashly by reducing the costs of an accident. So, given your subjective values for the other variables don't change, you are more likely to choose to drive rashly if you install protective equipment like a bullguard because this reduces the costs of driving rashly.

Agreed, this is a very simple model. But if you extended it to include other variables, the conclusion would not change. Just the equation would.

So, economics and logic tell you - don't install protective gear on your car. You'll end up driving rashly more often. And even though your satisfaction levels may rise, that of the other drivers on the road will fall as they will undergo accidents just because of you. So spare a thought for them.

10 comments:

  1. Let's raise a toast to all economists and budding consultants! Creating an equation to explain the 'duh' simple!! Am reminded of the joke about the consultant and the sheep, or the one about economist, physicist and chemist marooned on the island, without a can opener...but like economists, let's assume you've heard them!

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  2. looking at the kind of work ur doing, u'll get the nobel in a coupla years. consider this:
    the accident can be a result of the actions of the other maniac, in which case ur moral satisfaction is zilch, if not negative (due to the consequent swearing) and ur bullbars just saved u a lot of money. agreed it is a different situation, but you can construct a set of simultaneous equations and solve them.

    on a more serious note, IMPROPERLY fitted bullbars bypass the crumple zones in case of a collision and can cause serious injuries to the occupants. so get urs checked by someone qualified.

    or u can construct another eqn to model the tradeoff between life and car.

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  3. @ basu
    trust you to come up with something like that. yes, i thought of that. the question becomes really interesting depending on the probability that the accident is caused by a maniac hll bent on killing you. but consider that if you drive safe, you'll be extra careful and will make extra efforts to avoid the accident than if you're driving rashly. so the probability of having a 'not my fault' accident is higher with a bullgurd installed. now, one cannot say whether there will be any difference in expected costs as the damage will be more if there isn't a bullguard.

    algebraecally, if you drive safe (ie. bull guard not installed), a 'not my fault' accident occurs with a prob. n and the damage is N. If you drive rash (installed) then prob. of 'nmf' accident n' and damage N'. now, n is less than n' but N is greater than N', so we can't say which of nN or n'N' is greater.

    so, the conclusion of the model remains unchanged!

    @ankit
    dude, i'm bored, ok. this works my head.

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  5. You forgot about the 'other' thoughts prevailing in your mind, while driving...i.e., the emotional state of your mind...just had an arguement with wife, lousy day at office, just won a lootery, etc. Or the other physical activities while driving, like, changing the CD, lighting a cigarette, talking on the mobile, etc. What about the physical age of the person? Reflexes slow down with age, while the adrelan pumps in the young blood. And of-course the character/education/experience/attitude of the person driving....

    Well, not a bad subject for a PHd thesis!

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  6. WAIT A MINUTE..isnt it about the satisfaction you get out of 'headbutting' the other guy outta your way? YOU guys of all people need a 4 sided armour around your car..with namit uncle's occasional declaration that the truck driver is a 'son of a bitch' i think you pretty much need it..i read that article n i was thinkin "why am i reading this shit".."this is shit""im buying this stuff"..n at the end i was like "damn i bought it"..

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  7. damn interesting... i'd still go for the bull guard... i'd rather trust myself driving than a maniac on the road...

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