Asking Amanda Palmer about cooperation in the public goods game

In the late summer of 2010 I was homeless — living in hostels, dorms, and on the couches of friends as I toured academic events: a total of 2 summer schools, and 4 conferences over a two and a half month period. By early September I was ready to return to a sedentary life of research. I had just settled into my new office in the Department of Combinatorics & Optimization at the University of Waterloo and made myself comfortable with a manic 60 hour research spree. This meant no food or sleep — just sunflower seeds, Arizona iced tea, and leaving my desk only to use the washroom. I was committing all the inspiration of the summer to paper, finishing up old articles, and launching new projects.

A key ingredient to inducing insomnia and hushing hunger was the steady rhythm of music. In this case, it was a song that a burlesque dancer (also, good fencer and friend) had just introduced me to: “Runs in the Family” by Amanda Palmer. The computer pumped out the consistent staccato rhythm on loop as it ran my stochastic models in the background.

After finishing my research spree, I hunted down more of Palmer’s music and realized that I enjoyed all her work and the story behind her art. For two and a half years, I thought that the connection between the artist and my research would be confined to the motivational power of her music. Today, I watched her TED talk and realized the connection is much deeper:

As Amanda Palmer tells her story, she stresses the importance of human connection, intimacy, trust, fairness, and cooperation. All are key questions to an evolutionary game theorist. We study cooperation by looking at the prisoner’s dilemma and public goods game (Nowak, 2006). We look at fairness through the ultimatum and dictator game (Henrich et al., 2001). We explore trust with direct and indirect reciprocity (Axelrod, 1981; Nowak & Sigmund, 1998). We look at human connections and intimacy through games on graphs and social networks (Szabo & Fath, 2007).

As a musician that promotes music ‘piracy’ and crowdfunding, she raises a question that is a perfect candidate for being modeled as a variant of the public goods game. A musician that I enjoy is an amplifier of utility: if I give the musician ten dollars then I receive back a performance or record that provides me more than ten dollars worth of enjoyment. It used to be that you could force me to always pay before receiving music, this is equivalent to not allowing your agent to defect. However, with the easy of free access to music, the record industry cannot continue to forbid defection. I can chose to pay or not pay for my music, and the industry fears that people will always tend to the Nash equilibrium: defecting by not paying for music.

From the population level this is a public goods game. Every fan of Amanda Palmer has a choice to either pay (cooperate) or not (defect) for her music. If we all pay then she can turn that money into music that all the fans can enjoy. However, if not enough of us pay then she has to go back to her day job as a human statue which will decrease the time she can devote to music and result in less enjoyable songs or at least less frequent releases of new songs. If none of us pay her then it becomes impossible for Palmer and her band to record and distribute their music, and none of the fans gain utility.

The record industry believes in homo economicus and concludes that the population will converge to all defection. The industry fears that if left to their own devices, no fans will chose to pay for music. For the highly inviscid environment of detached mass-produced pop music, I would not be surprised if this was true.
The record industry has come up with only one mechanism to overcome this: punishment. If I do not pay (cooperate) then an external agent will punish me, and reduce my net utility to lower than if I had simply paid for the music. Fehr & Gachter (1999) showed that this is one way to establish cooperation. If the industry can produce a proper punishment scheme then they can make people pay for music. However, as evolutionary game theorists, we know that there are many other mechanisms with which to promote cooperation in the public good’s game. Amanda Palmer realizes this, too, and closes her talk with:

I think people have been obsessed with the wrong question, which is: “how do we make people pay for music?” What if we started asking: “how do we let people pay for music?”

As a modeler of cooperation, in some ways my work is as an engineer. In order to publish, I need to design novel mechanisms that allow cooperation to emerge in a population. In this way, there is a much deeper connection between my research and one of the questions asked by Amanda Palmer. So I ask you: What are your favorite non-punishment mechanisms for allowing cooperation in the public goods game?

References

Axelrod, R. (1981). The emergence of cooperation among egoists. The American Political Science Review, 306-318.

Fehr, E., & Gächter, S. (2000). Cooperation and Punishment in Public Goods Experiments American Economic Review, 90 (4), 980-994 DOI: 10.1257/aer.90.4.980

Henrich, J., Boyd, R., Bowles, S., Camerer, C., Fehr, E., Gintis, H., & McElreath, R. (2001). In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies American Economic Review, 91 (2), 73-78.

Nowak, M. A., & Sigmund, K. (1998). Evolution of indirect reciprocity by image scoring. Nature, 393(6685), 573-577.

Nowak, M. A. (2006). Five rules for the evolution of cooperation. science, 314(5805), 1560-1563.

Szabo, G., & Fath, G. (2007). Evolutionary games on graphs Physics Reports, 446 (4-6), 97-216

About Artem Kaznatcheev
From the Department of Computer Science at Oxford University and Department of Translational Hematology & Oncology Research at Cleveland Clinic, I marvel at the world through algorithmic lenses. My mind is drawn to evolutionary dynamics, theoretical computer science, mathematical oncology, computational learning theory, and philosophy of science. Previously I was at the Department of Integrated Mathematical Oncology at Moffitt Cancer Center, and the School of Computer Science and Department of Psychology at McGill University. In a past life, I worried about quantum queries at the Institute for Quantum Computing and Department of Combinatorics & Optimization at University of Waterloo and as a visitor to the Centre for Quantum Technologies at National University of Singapore. Meander with me on Google+ and Twitter.

13 Responses to Asking Amanda Palmer about cooperation in the public goods game

    • I enjoyed your post, looking at the video itself or the “I give stuff for free” attitude as a signaling game is I nice perspective. I will try to leave some more meaningful comments on your blog. As noted by you (and Kate Zen lower in the comments), I did not take a critical approach in this post. It was really just a way to introduce some ideas from evolutionary game theory under the disguise of talking about the music industry. The hope is that it would motivate someone to look up a paper or two from my reference section.

  1. Martin H. says:

    first thoughts….two approaches to follow could be – 1) increase the publicity via reputational concerns and reputation management (via social networks, various ways for that); 2) increase the mutual benefit for both sides by a) trying to limit the scope for interpretation of immoral acts via rationalization (e.g. providing convincing moral or practical reasons – could work as a “vaccination” for poor justification of immoral behavior); b) provide easy and affordable way to pay fair prices (highlighting a mutual benefit a recipient and receiver – smaller prices by larger amount of people could yield this outcome)…..etc…..what do you think?

    • I like your approach (1), this is known as indirect reciprocity in the evolutionary game theory literature, see Nowak & Sigmund (1998) in the blog reference section. Unfortunately, in a traditional EGT setting, to use indirect reciprocity, there has to be a way to not cooperate with people of low reputation (think: not buying from low rated users on eBay). Unfortunately, this approach might make people feel like they have to purchase their reputation. It is only really reasonable in a setting where agents are both producers and consumers, and in that case reputation is a little bit like a currency (although not exactly). Of course, in the case of humans, you could leverage some evolved mechanisms. We care about reputation, even when it has no real functional purpose, and are really susceptible for gamefication and wanting to earn more ‘rep’, so it might still be doable. However, we would be relying on quirks of human reasoning in this case, instead of general properties of dynamic systems.

      I don’t understand your 2nd suggestion very well, especially part (a). Can you expand on that? I think part (b) is already provided by things like Kickstarter (you can contribute as little as you want, and the more you contribute then the more extra goodies you get).

  2. Terrific T says:

    Your post reminded me of this “trust game” report I saw a while ago. (http://www.npr.org/blogs/thesalt/2012/06/11/154750001/the-psychology-of-the-honor-system-at-the-farm-stand). The example in the post (paying for fruits at a unmanned fruit stand) is simpler than in the case of music.

    I frequently visit the Noise Trade (http://noisetrade.com/) website where I discover new musicians. When I download the songs I am asked of my postal codes – I imagine this is mostly to get a sense of where I am and for the bands to decide where to go and play a show next. It also allows a “tip” option for those who are interested in paying. As musicians have various venues of making a profit, the “trust” they put in listeners can be of many different levels, making the game more complicated. Also, as the game expands to reach a bigger population (beyond the number of people a fruit stand can reach, for example), I would imagine things get more interesting.

    • That is a really cool system (for the fruit stand). During my last 4 months in Waterloo, I lived down the street from a coffee shop & bakery that operated on a similar system. There were prices on things, but the actual payment was based on an honour system. In Montreal, there are even more trusting system. My roommate would frequent this Iranian guy’s restaurant, where you could pay whatever you want for the food he makes (including $0). Although if you took some food and didn’t finish eating all of it, he wouldn’t serve you again.

      I liked the quote: “eventually somebody’s going to come along who tries to take all the cash.” This was interesting to me, because it plays nice with some ideas of systemic risk that I’ve been fooling around with. In the case of Waterloo, however, the box was piggy-bank style and so not as susceptible to theft as an open cash register would be.

      • Terrific T says:

        This article highlight the issues of free content – view from the other side. Things to highlight are:
        – The psychology of rationalizing our behaviours
        – Whether in the long run the business model would work for most artists
        – Whether free content make music or other creative industries, in which it is possible to provide free digitized content (writing, photography, etc), “privileged” industries (only those who can afford doing it for free will do it)

        http://junkee.com/the-case-against-free-2/1421

        And there have been ample recent discussion regarding writers writing for free, coming from the recent controversy stemming from how journalist Nate Thayer refused Atlantic’s ask to post his content without financial payment.

        http://gawker.com/5989280/when-people-write-for-free-who-pays

        The psychology of rationalizing one’s behaviour in games is something interesting to think about…

        • Wow, those are pretty great articles. The part I found most interesting was viewing the entry barrier that free writing/music provides. If you are not well-off already then you simply can’t afford the short time shock or risk of trying to pursue a ‘creative’ career. The argument that the internet is actually biasing content creating towards the wealthy is very appealing.

          My only concern though, is the fundamental focus on money. Imagine if your government provided your basic needs (food, housing, basic entertainment) for you. In such a setting, would artists ever need money?

  3. Kate Zen says:

    While I’m inspired by Amanda Palmer’s speech (and her badass eyebrows), I think one should be a bit more critical about the donation-based model for compensating musicians. Though this has worked for certain artists, such as Radiohead and Amanda Palmer, I wonder if their financial success has been due primarily to the fact that they are novelties and outliers, acting outside the industry norm. How much does having a pre-established cult following matter for being able to make a reasonable return on an album using a donation-only basis? Would new, relatively unknown artists be able to sustain themselves in this way, or does it still make economic sense to be on a record label for the purposes of promotion and distribution? What is the role of the record company nowadays, and why do artists continually choose to be on labels when they can “go independent” on sites like Kickstarter, Indiegogo, and CDbaby?

    Also, another question is: how do expectations of cost impact donation choices? Since people currently expect to pay about $20 for a CD, or $2 per song on iTunes, they feel they are getting a good deal when they can donate slightly less for an equivalent number of songs – but what happens when consumers get used to a donation-based model for patronage, and no longer evaluate a 12-song album at about $20? Do you predict the average contribution will decrease over time?

    Not every artist will be as successful at “asking” as Amanda is, since not every artist cultivates the same alternative-minded, against-the-Man fanbase. (Also, not everyone is as badass and awesome.) The act of “asking” skillfully is its own artistic form, much like the videos on Kickstarter. I wonder if the skillful act of “asking” might start to become more important than the music itself.

    In spite of these criticisms, I think Amanda Palmer is right in that given how easy it is to pirate music nowadays, a donation-based model for creative production seems inevitable. In many ways, this could be a wonderful thing, particularly for independent designers that create physical art pieces or gift items, because: 1) they can do free market research before releasing their product by seeing how many would want to buy the product before expending the capital in creating it, which reduces production risk; 2) they can get the startup capital from their customers before producing the product, which reduces risk and barriers to entry for new artists that might need support in purchasing equipment; 3) they build up a fanbase that feels a sense of personal connection/ownership/contribution to the product and will thus be much more loyal consumers.

    However, there are also potential drawbacks: for non-physical creative work (i.e. music, pieces of writing/digital journalism, digital art) – particularly the kind of experiential products that can only be evaluated upon or after consumption (a song, a photograph), people are quickly becoming accustomed to free entertainment. Are consumers becoming spoiled by freely available, user-made content (ex. YouTube) so that they are increasingly less willing to pay anything for creative work? How can artists make a liveable wage doing what they do when the expectations on the price of creative work seems to be perpetually dropping?

    What factors might lead to better or worse “cooperation” in artistic patronage, from an evolutionary game theory standpoint? I’d be curious to see you apply the technical model to generate more insights on how to add cooperative value.

    • I agree that one of the reasons that a cult following is central to the success of artists like Amanda Palmer and Radiohead. I would not be surprised if their target audience has a lot to do with the success of their asking, I imagine it would be much harder for a gangster rapper to get money by asking (I guess that is why that industry has brand marketing to fuel it). In general, I expect a preferential attachment or ‘rich get richer’ effect if such a model was adopted, this would result in a scale-free distribution of wealth and size of fan base for most artists. Since there is a hard lower-bound on the income/fanbase that you need in order to sustain your art, this would mean that a lot of the heavy tail would be cut of and barred from entering the industry. However, is it really different now? If we plotted artists by size of following (say on twitter as a proxy, but also can do by album sales at a disadvantage to indie artists) then what distribution would you expect? i still suspect a power law, and hence the same heavy tail being cut off and barred from entering the music scene.

      As for ‘going independent’, I think you have that to some extent now-a-days with YouTube artists. The majority of them, do music as a passion and hobby, and don’t expect to be paid for it. In some way they are devaluing art by, as you say, spoiling us with freely available user-made content. Some use it as a method to get noticed by a winder audience in the traditional hopes of being picked up by a record label (much like in pre-YouTube one might head to a battle-of-the-bands event with the same goal). But there is also some entrepreneurial spirit with some artists pooling together and making indie labels (ex. Dumbfoundead and his label Knocksteady). The last option is still the classic model, but it never hurts to have more competition. In the end, I think it is easy to over-estimate the transformative power of the internet at times. I would be interested in hearing about this from artists that have gone through the process of building a fanbase, because my knowledge about this is all arm-chair.

      You hypothesis on pricing, can be tested experimentally. Amanda Palmer’s kickstarter raised $1 mil with about 25 k backers, this means that the average price paid was around $40. This seems to contradict your expectation of devaluing, but — as you mentioned — AP might just be an outlier. Further, I would expect high kurtosis on the distribution of payment by backers, as such mean might not be the best average to use. It probably makes more sense to look at the median and mode contributions, since they are more informative for such settings. Since this distribution is one-sided heavy-tail, I would expect the median and mode to be significantly less than the mean, but it is below $20? I wouldn’t know without looking at the data (maybe that would be a good exercise for the eager reader).

      I really hope that ‘asking’ doesn’t become its own art-form. This has become a problem in science, with the ability to write grants (which are often evaluated by non-expert bureaucrats looking for buzzwords and formatting), or game the citation system, becoming more important that the actual quality of questions asked and answers given. I often find myself thinking about “how can I sell this result”, instead of simply “is this a good result?” which really makes me doubt myself. I fear that you are right in that it would force the industry to transform to specialists in asking. However, is that not already the case? It is just that modern artists are often specialists in asking record labels and sponsoring corporations. Wouldn’t it be better if they were experts in asking fans? Sure, not the ideal of art for arts sake, but sometimes that also isn’t as utopic as one would expect.

      It would take some effort to build a good mathematical model of this industry, but it might be a fun exercise. Unfortunately, there is that rat from the previous paragraph whispering in my ear: “but can you publish that?”

      • Kate Zen says:

        Before the invention of the record, which made music a consumable and ownable experience, musicians had to make their keep by playing live concerts. The technology that gave rise to record companies – a sort of venture capitalist of the music industry – is actually the invention of sound recording, which also made it possible to use radio music to sell space on the airwaves; subsequently, Pandora and Spotify are playing this role.

        However, before recorded sound was around, musicians survived by being good at their craft, and skillfully providing live experiences for people. We now make a return to this model, since more and more artists find they must tour and play live concerts to make a living. This influences the type of music that begins to get more of a following. Some music is more amenable to being played live than others.

        Furthermore, some musicians are more personable, charismatic, and better at self-promotion than others. As more and more bands decide to DIY release their LPs on sites like CDBaby, expert “reviewers” and music critics rise to sort out the good from the bad, to advise on music investment, becoming more powerful as gatekeepers. Instead of record company A&R people, you have the curators of music blogs and music discovery sites, guiding fans to potential investments.

        The ecology of the music industry food chain will certainly shift with the extinction of the record industry, but there are ways for some to rise to power, who are not musicians. And perhaps that is a good thing: musicians should be rewarded for being good musicians – let the promotion be someone else’s work.

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