The Marginalist:

When I was in high school, I almost exclusively hung out with an Asian clique. If you talked to me about diversity, I would have burst out laughing. Diversity in my group of friends meant two Indians and one half-white and half-Asian girl. Its not that I was racist. Its just people who did the things I did — math club, orchestra, and the gifted program — were so much more likely to be Asian. And I lived in the suburbs of Seattle.

Things are different now that I’m at Georgetown, a Jesuit private east-coast school that’s good enough to be Ivy. 90% of my friends come from private Catholic schools (my old friends consisted of atheists and a single protestant), and all but a handful are white. Five of them are named John or Jon. None of them are particularly stellar at math or play stringed instruments, but I love them just the same.

One of my best friends here is a guy on my floor named, um, Jon (surprise!). His friends were as white-washed as my friends were yellow-washed. He comes from a private Catholic school in Ohio. When I asked him if there were Asian people there, he said, “Well… there was that one kid, I think he was Vietnamese or something.” He’s tall, I’m short; he has hair, I’m Asian; he’s in the nursing school and I’m in the college of arts and sciences. The only thing we have in common is a love of classic rock. But we do a lot of stuff together. We watch The Office in my room, I chill in his room, we eat together, we take apart his roommate’s alarm clock and disable the snooze button together….

So, one day Jon and I decided to go to the dining hall — dubbed “Leo’s” — to feast on Leo’s famous chicken fingers, which are only served on Thursdays. Usually, the main fare for Leo’s is greasy, sauce-laden, and mostly unappetizing. But the chicken fingers are to die for. Chicken fingers are one of those things that brings everyone together here, like basketball, cursing the absence of a metro stop, and laughing at freshmen who live in Darnall. Two makes for a lonely lunch, so I called up another, Camilla, to join us. Unfortunately, life isn’t always perfect, and she seems to always be busy:

“Sorry, I’m working on a Chinese project and I don’t know when I’ll be done. I’ll give you a call when I’m done and if you’re still there we’ll have lunch, OK?”

Jon and I are already in the dining hall and we won’t be able to swipe back in if we leave. So, the question is, do I just eat with Jon and leave without waiting for her? Or do I wait? If I wait, how long do I wait? 15 minutes? 30 minutes? An hour? As long as it takes?

Yet another thing that brings Georgetown students together is Lauinger Library. “Lau” is essentially the second home of a Georgetown student. It’s home to the student-run coffee store “Midnight Mug” (they make a mean latte), sleeping public safety guards, and Michael Clark.

The entrance to “Lau” is on the third floor (the entrance to every building here is on the 2nd or 3rd floor, never the 1st). My favorite floor to study on is the 5th floor — it’s dead quiet and the chairs are comfy, but not sleep-inducing. Every time I went into Lau, I walked in, hit the “up” button on the elevator… and waited for ten seconds. “I’ll give it ten seconds,” I thought, “and if the elevator doesn’t come I’m walking. That’s all the time I’m willing to spend to wait for the elevator.”

It occurred to me the other day that this might be a massive waste of time. If the elevator doesn’t come, wouldn’t it be faster to skip the elevator and just walking? Or should I just continue waiting?

Let’s say the elevator takes anywhere between 0 and 20 seconds to arrive. On average, the expected waiting time is 10 seconds — sometimes it will take more time, sometimes less, but on average you’ll have to wait 10 seconds for the elevator.

After waiting 10 seconds, the elevator still hasn’t come. I  now know it was a mistake to wait for the elevator, because I wasn’t willing to spend more than 10 seconds waiting for that elevator. I’m understandably upset by this — but should I just give up and take the stairs?

The answer, as you’ve probably deduced, is no. The trick lies in differentiating between sunk and marginal costs. Sunk costs are costs that are already incurred and no have impact on future decisions. Marginal benefits costs are what we need to worry about — marginal basically means the next step. Marginal benefits and costs aren’t incurred yet; we’re deciding whether or not it’s worth the trade-off.

In other words, forget about those ten seconds. They’re gone. They’re already spent. They’re not coming back. It doesn’t matter that you’ve wasted them anymore, because there’s nothing you can do about it. In fact, once you’ve spent 10 seconds waiting, it means you only need to wait between 0 and 10 seconds (an average of 5 seconds) more. Now that we’re ignoring that first ten seconds, which are long gone, all we need to focus on are those next seconds of waiting. And because I was willing to spend up to 10 second waiting, and on average I’ll only spend 5 more second waiting, it makes sense for me to just keep on waiting until the elevator comes.

Or, I can just choose to skip the elevator altogether and take the stairs. That, too makes perfect logical sense. So the most rational options are to either skip the elevator, or wait until the elevator comes. But it never makes sense to just sit there and wait for a certain amount of time.

Put it this way: If waiting for 1 second is worth it, then after that first second is gone the next second must be worth it as well. And so on and so on, until the elevator has come.

—

Should we pull out of Iraq?

I can’t say. I don’t know the answer. But I know how to think about the question.

Proponents of pulling out sometimes point the past and say, “4,000 lives is enough.” We’ve lost so much blood and treasure here that it’s no longer worth staying.

Proponents of staying say, “look at all the lives we’ve sacrificed in Iraq. To go would waste all of those lives.”

Both are wrong ways of looking at the problem. The 4,000 lives spent are, well, sunk costs. I think it was a terrible mistake to invade in the first place, but it’s not like we can take that back anymore. All that matters now is the additional — the marginal — lives and resources compared with the marginal benefit (if any) of staying in Iraq. I think the answer is that it’s not worth it, but I’m not going to pretend the answer for sure. But I do know that pointing to the lives and treasure already spent trying to stabilize the country is not a rational thing to do for either side.

—

There’s one caveat in the elevator problem I’d like to point out, though. We’re dealing with average expected waiting times, not set

At least I got to eat these delicious chicken fingers.

waiting times. There’s uncertainty involved. The best strategies, which I’ve outlined, are simply strategies to best manage these risks. On average, they will yield the best results. But since uncertainty is involved, there’s always a chance that you’re really choosing the wrong strategy.

I thought about “giving Camilla” 10 minutes, but I had a hunch that the best options for me were to either wait indefinitely until she arrived, or not to wait at all. I had no idea when she would be done, and I had a paper to write. So Jon I left… and not three minutes after I walked out of the dining hall, she called me and asked if I was still at the dining hall. Uncertainty’s a bitch.