What to think while waiting

David Henderson recalls his first class with Armen Alchian in 1972, who started class noting that if someone understands the incentives they can understand a lot of ‘mysterious’ behavior.

“On the first day of class he said when we went to the bookstore we’d be in a long line and we’d be angry about that. But we shouldn’t be. We should be happy because it means economics works. The people working are on a standard wage and they don’t have a strong incentive. There’s no ownership, no one gets a big benefit if they do better.” – David Henderson, September 2021

We should be happy to wait? Kinda.

One theme around here is the value of curiosity. Mostly that means to wonder how and why and when things happen – or even when they don’t happen. And incentives are ripe for thought.

We’ve looked at prediction incentives, Marine incentives, and the incentives of salting roads. There’s music incentives, be careful what you count. And football recruit incentives, more careful counting.

Incentives come up so much because one way to be curious is to ask: why does that happen? and part-of-the-reason that happens are the incentives.

This kind of curiosity takes work. Like exercise takes calories, crypto (or cars) take gas, or relationships take conversations – curiosity takes work. To be curious is to think, wonder, and ask questions. To be curious is to move past the simple story and see what else is there. Sometimes there’s not more, sometimes there’s incentives, and sometimes there’s something unexpected.

One of the highlights of my interneting has been writing a post about curiousity for Ribbon Farm.

NFTs and Gary Vee

One way to support this time is different… is to say that the technology has changed. The smartphone’s GPS, camera, and chips all allowed a slew of businesses to serve customers in new ways.

Another way to see change is to ask the Bob Pittman question: is this another one of these? MTV followed from the idea of narrow-casting radio stations. If there was a rock station, country station, oldies station and so on on the radio shouldn’t there be something like that for television: a news station (CNN), a movie station (HBO), a music station (MTV)? This too was a technology shift.

“I believe there’s not a single sporting event or concert in ten years that the ticket is not an NFT. There’s no incentive for that organization or artist to launch it as anything but an NFT. A QR code or piece of paper means nothing. But if Luka Doncic drops a hundred points in that game it becomes a forever collectible. There’s a trillion-fucking-dollars worth of ticket stubs that have sold on eBay over the last twenty years.” – Gary Vaynerchuk, My First Million podcast, August 2021

A third way to consider change is to ask about the business model and the incentives. Sport is not a competition, sports is entertainment. Bob Iger wrote that he learned this lesson working the 1974 Olympics. “We weren’t just broadcasting events, we were telling stories.” There’s only one sport honest about this.

Are NFTs a new technology? Yes. Is this (NFTs) ‘another one of those (collectibles)’? Yes. Does the business model allow for this kind of innovation? Yes!

Thorpe’s Two Questions

Ed Thorpe is in graduate school and has a professor who is ‘mailing it in’. In class Thorpe stands up to the instructor, demeans him, and is threatened with expulsion. Needing to stay in school, if only to avoid the Vietnam War draft, Thorpe crafts a careful apology:

“I explained that I’d come to realize his teaching methods were unique and that students, though they may not always appreciate it rarely encounter a professor of his caliber. What I said was true, but allowed more than one interpretation.”

It was an early lesson that was almost quite costly. In the future, Thorpe started to ask two questions: “None of this would have happened if I’d have asked myself beforehand, if you do this, what do you want to happen? And, if you do this, what do you think will happen?

Book: A Man for All Markets