Honor Systems

[BigPoppa]

I live in Berlin, which uses a modified Honor System for its excellent public transportation system. You buy a ticket, you stamp it in the machine (to show when you started your journey) and you get on the train/bus/tram. There are no turnstiles, there are no ticket takers. Many U-Bahn (subway)stations won't have any employees around at all. There are roving inspectors, but very few and you can often spot them in advance (big butch women with crappy haircuts and black windbreakers). Even though it's very easy to get away with not paying, most people still pay.

A ticket across town cost 2.10, and the fine for getting caught without one is 40 Euros. Since you are likely to go a lot more than 20 rides without being asked for a ticket, riding without one is clearly +$EV. However, there are other considerations.

I've noticed that riding without a ticket turns me into a nervous wreck. I don't know whether it's guilt over scamming the Honor System or worry over getting caught. Whatever it is, I've decided that saving 2.10 on the infrequent times I ride public transport (I usually take my bike everywhere) just isn't worth the hassle. I'd rather pay the money and read my book in peace than save the money and stress out.

Do any of you have experiences with other Honor Systems on such a large scale?
Or can you think of situations in which a large scale Honor System might work?

What do you think the primary motive is for people who decide to play by the rules?
Would large-scale Honor Systems work in cultures that don't have a long history of obeying the law/following the rules?

[TheWorstPlayer]

There is a relatively famous Honor Code at Princeton University for all papers and exams. There is no policing: no proctors or teachers in the room while taking exams, many exams are take-home (even if they are timed exams and/or closed book - you are on your honor not to take more than the allotted time and not to use prohibited materials).

Once, instead of turning in a final exam, I accidentally put it in my backpack and took it home. The next day, I opened my backpack and, to my surprise, saw the exam there. I immediately wrote to my professor saying what had happened. He told me to bring the exam to his office. I went and he asked me if I had completed it on time without using any books, completely in the manner that was appropriate. I said I had. He made me sign the honor code again in his presence and then took the exam and graded it.

Of course there is cheating at Princeton, but I don't think it's any worse than anywhere else. And the fact that you can take your exams in such freedom and people can assign takehomes and stuff makes everything so much nicer. It's not like a police state and you're not like a prisoner. It's a place to learn and you're a valued student. I think that 99% of the people really value the honor code (even those who might cheat it once or twice) and therefore people don't rampantly cheat because they know that would cause it to go away.

[Slow Play Ray]

"How do you know they're taking the right amount of change? Or even paying for what they take?"

"Theoretically, people see money on the counter and nobody around, they think they're being watched."

"Honesty through paranoia...why do you smell like shoe polish?"

[Los Feliz Slim]

When an actor does a commercial under the Screen Actors Guild collective bargaining agreement, they're due certain payments based on how the commercial is used. There's no monitoring system or third-party entity that controls these payments, basically the advertiser/advertising agency tells their payment company "Hey, we used this commercial" and the payment company sends a check to the actor.

As you might imagine, this system is rife with abuse/sloppiness. Unless the use is high-profile or somebody in the actors family happens to see it or something, most of the time the actor won't even know that the commercial was used. For instance, the actor is due a certain amount of money if the commercial is used in Poland. Unless the actor is Polish, how would they ever know that the use occurred?

Depending on the situation, the penalties for not paying for use are generally light. Under some circumstances there's an arbitration system that sucks ass, takes a year, and still imposes light penalties.

So, I can tell you that in a system where we're dealing with for-profit corporations that are used to cutting corners and bending the rules to get what they want, the system totally doesn't work. It also encourages/allows the presence of total idiocy - why have intelligent people in the positions responsible for making these payments when it really doesn't matter anyway?

I think the companies that at least always try to make the correct payments and to make amends when they don't are just generally fair, honest folk. Also, like in your public transportation example, getting caught cheating once or twice isn't a big deal, but I bet if you got busted 10 times they'd try and bar you from the system or something. Similarly, if it could be demonstrated that Anheuser-Busch, for instance, had a policy of not following the SAG contract, at some point they'd be excluded from it. Or so you'd think!

As an actors' representative, the only recourse I really have when they ignore the contract is to wait for the situations where I've absolutely got somebody dead-to-rights and make their life really, really, unpleasant so that they'll overpay to make me go away, and hopefully think twice about ignoring the contract next time.

[BigPoppa]

That sounds like a really messed up system. I agree that corporations can be expected to never abide by an Honor System if not doing so is +$EV. Falls into line with the mindset that doesn't recall a defective product if the cost of the recall is greater than the cost of lawsuits by people they killed or maimed. They are in the business of turning a profit and can be expected to maximize that profit regardless of the effect on others.

I wonder if your royalty system would be crap even if no corporations were involved. Many individuals would have no problem scamming "the system" (as in the case of filesharing, et al), but might hesitate if the people they cheated were ones they actually knew and had hired to make a commerical. I'm guessing there'd be a sharp divide between those who always paid and those who never did.

[eviljeff]

I'm always amazed at how easily poker players will transfer thousands of dollars on the honor system. I've done a few transfers, but only where the other person sent first.

[splashpot]

I'm doing 2+2 fantasy football on the honor system.

I've also organized and kept money for a 2+2 fantasy basketball league with bad results. At the end of the season I was unable to pay the winners immediately because 90% of my assets were frozen in Neteller at the time. I felt terrible. It was only $25 buyin so the money meant pretty much nothing but I still felt horrible. I've paid everyone by now of course, but I wouldn't be surprised if non of them trust me again.

[TheWorstPlayer]

Oh yea, durrrr wanted to know where to pay his $5K HSNL tourney entry. I posted my screen name and said to send it there (despite not being involved in any way) and the next day I had $5K in my account. Easiest scam I ever ran. Yay poker players!

[Borodog]

People have been bred for tens of thousands of years to behave this way, because social life is essentially like a long iterated prisoner's dilemma. The correct strategy is Tit for Tat, or basically, always cooperate unless someone screws you over. Even if you rationally believe that cheating somebody it +EV, you have to ask, "+EV over what time frame?" Cheating as a general strategy is almost always -EV in the long run. Evolution cares about the long run, even if human beings, constrained by time preference, care more about the short run. Human beings generally do not cheat for the same reasons that squirrells gather and bury food months before the winter; in general it's good for them in the long run, even if they can't articulate why.

Humans evolved in small groups where antisocial behavior was easily spotted and the consequences of it were dire (death or expulsion, either one of which vastly reduces the likelihood of passing your antisocial genes on to the next generation). Just as people have bred dogs to be friendly and companionable, so too have they bred themselves to the same end. In effect humans, via evolution, have domesticated themselves.

[eviljeff]

most violated honor system?

I nominate porn website enter/exit age verification links