We have to have Wi-Fi available everywhere — I have withdrawal symptoms if I can’t do my email and check the web often. Recognizing this, many stores offer customers “free” Wi-Fi. I’m sure the cost of the Wi-Fi is passed onto the customers as higher product prices, in what are typically competitive retail industries. But how to avoid people spending hours in the shop surfing the web free of charge, and perhaps causing congestion for other users?
The Whole Foods store on Kensington High Street in London has solved this problem by allowing each computer or smart-phone a two-hour log on period, after which the device is booted off the Wi-Fi. Two hours are enough to satisfy almost any customer, but short enough to prevent non-customers from making the store their Wi-Fi venue of choice. I expect this kind of limit will become more widespread shortly — it is much more effective than warning people not to stay logged on for very long.
We recently ran a listener survey for Freakonomics Radio. Among the interesting findings: only (or should that be “only”?) 18 percent of the respondents are members of a public-radio station. A reader named Steve Cebalt wrote in to ask about the nature of public-radio membership:
So it’s pledge week at my local public radio station, when they interrupt my favorite news programs with appeals for money. Funny, I used to be on the board of directors of this station, so I have a great appreciation for it.
But I am not a member. I don’t pay. I am supposed to feel guilty, but I don’t. You know why?
Because I am not really causing a negative externality on others — am I ?
Whether I listen or not, they’ll still broadcast right? And others contribute freely of their own volition. So is anyone harmed if I listen (or don’t listen) without donating?
I’d love to see your blog readers rip into this question from a Freakonomics perspective:
So go ahead, people. Rip. Remember everything you’ve ever thought about free-ridership, slippery slopes, and critical mass on issues like voting.
We recently ran on a post on a reader’s query about the economics of a 50-50 fund-raiser. John List, the University of Chicago economics-of-charity wizard (related podcast here), wrote in with a comment:
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The intuition of the reader is slightly off. Although not directly a 50-50 charity drive, we have explored the efficacy of lotteries both theoretically and empirically. As John Morgan (from Berkeley) has elegantly shown, under standard assumptions (no risk-loving or lottery-loving behavior is necessary), lotteries outperform the simple ask (what we call a VCM). Lotteries obtain higher levels of public-goods provision than a voluntary contributions mechanism (VCM) because the lottery rules introduce additional private benefits from contributing.