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BrassLion comments on "Stupid" questions thread - Less Wrong Discussion
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When you go out to eat with friends, randomly choose who pays for the meal. In the long run this only increases the variance of your money. I think it's fun.
This is likely to increase the total bill, much like how splitting the check evenly instead of strictly paying for what you ordered increases the total bill.
Assign the probabilities in proportion to each person's fraction of the overall bill. Incentives are aligned.
I haven't observed this happening among my friends. Maybe if you only go out to dinner with homo economicus...
This is called the unscrupulous diner's dilemma, and experiments say that not only do people (strangers) respond to it like homo economicus, their utility functions seem to not even have terms for each other's welfare. Maybe you eat with people who are impression-optimizing (and mathy, so that they know the other person knows indulging is mean), and/or genuinely care about each other.
From where? I'd expect it to depend a lot on how customary it is to split bills in equal parts in their culture.
How often do you have dinner with strangers?
But it saves the time and the effort needed to compute each person's bill -- you just need one division rather than a shitload of additions.
This is actually something of an upside. If you can afford to eat out with your friends you can afford to eat a bit better and have more fun. Not caring about what your food costs makes ordering and eating more fun.
"If you can afford $X, you can afford $X+5" is a dangerous rule to live by, and terrible advice. Obscuring costs is not an upside unless you're very sure that your reaction to them was irrational to begin with.