Wednesday, April 17, 2019

reading review - skin in the game (the melon metaphor)

A thought provoking section from Skin in the Game was Nassim Nicholas Taleb’s analysis of how intolerant minorities have the potential to alter a society’s default preferences. He used an example involving food preferences within a neighborhood that I will recreate almost in its entirety here.

First, suppose that you live in a family of four. Let’s say someone in the family suddenly develops an allergy to melons. The level of intolerance is severe enough that even airborne exposure will cause immediate illness. Although the rest of the family loves melons, the fruit is far from being a nutritional requirement in anyone’s diet and the family stops buying melons with little extra fuss.

Next, let’s say this family lives in a multi-unit building. One day, neighbors chat as neighbors do and it comes up that due to this new intolerance for melons the family on the first floor no longer buys the esteemed fruit. After parting ways, the upstairs neighbors reflect on this news and decide to play it safe – they, too, like melons, but it’s probably better to keep the entire property as melon-free as possible lest anyone become gravely sick thanks to one other person’s preference for a bit of fruit at lunch. The neighbors soon stop buying melons.

Finally, suppose these families live on a tight-knit block. Every year, they all get together at one house for a block party. In the process of planning the party, the news gets out that the families living in the nice duplex unit next to the dog park no longer eat melons. Oh dear, think the hosts, and they instruct the guests to leave all melons at home, which is too bad since about a third of the block’s residents describe melon as being ‘one of their favorite fruits’. But these same residents also describe 'no one dying from allergies in the neighborhood' as being among 'their favorite preferences' (or at least would do so, were anyone smart enough to ask). Given the realities of the neighborhood, these residents secure other fruits to bring to the party.

When the guests arrive at the block party, their curiosity leads to the melon allergy becoming the first topic of conversation. How bad is the allergy? No one knows, but everyone agrees that it is serious. What if someone threw out a melon on trash day and the wind picked up the scent? Let’s not think about that, everyone agrees. Or what if a dog - a homeless dog, to clarify, since the neighborhood dogs would never do anything to harm the block, those piles of dung on the sidewalk notwithstanding - what if a homeless dog got into a trash bag, pulled out a half-eaten melon, and then left it on the front steps of the duplex? Oh, the horror! By the time the party ends, no one on the block will ever buy another melon.

And the math of this result is the point of the allergy analogy - one person's intolerance of the fruit leads the entire block to stop buying melons.