Toilet paper and the tragedy of the commons

I've held my tongue on the coronavirus outbreak because frankly I don't know what to make of it. I've found both the argument for taking precautions and the argument for doing nothing convincing. My attitude is to err on the side of doing nothing.

Back when I used to listen to Ric Edelman, he said something that stuck with me: "Don't just do something, stand there!" In the original context, it meant don't react to one bad day or one bad week in the stock market. In a general context, it means any decision you make in the moment will probably be the wrong one. Also, during my formative years in Maryland, the overhyped swine flu and overhyped Hurricane Irene taught me I didn't need to concern myself with stuff the media told me to be concerned about.

Now here we are, a day after all the major sports in America postponed or cancelled games, when many schools and colleges either extended Spring Break or canceled classes. I don't know whether we'll all be laughing about this on Tax Day, or we'll be talking about the Dow Jones slumping past 15,000.

I personally have not been affected by the coronavirus or the public reaction. Work is the same, church is the same, family life is the same. Writing is the same (i.e., really hard). If it's not in front of me, how can it inconvenience me?

It would be overstating it to call the reaction to the coronavirus in America a "panic." It's merely a significant number of people taking precautions, like when an unpredictable hurricane bears down on you. But let's apply "panic" loosely. When does panic become the rational choice? When does it become my best interest to react not on my instincts or reason, but on the actions of others?

Here's a thought experiment for you. Imagine a pot of money in the middle of a large group of people. Each person puts in a hundred bucks. Every minute, the amount of money in the pot increases by 2 percent. This happens until an hour is up, whereupon the group will divide the money evenly, each person earning a 200% profit for standing there and doing nothing.

I would probably be that guy telling everyone, "Nobody take money out, and in an hour we'll all be rich." I have that kind of temperament. Of course that's factually true, but this scenario isn't testing our math skills. It's testing social trust. If you're one of those people, do you trust the others? More importantly, do they trust you?

Here's how the experiment will break down before the hour is up. Someone takes money, then someone else, then three more people, then it becomes a free for all. At the beginning, almost everyone trusted each other to wait. But for the experiment to reach the end of the hour, you need everyone to trust each other. No group acting collectively is more trustful than its least trustful member, which is why most groups don't make it to the end of the experiment. It's a negative feedback loop: The less money there is in the pot, the more I want to take. This is called the tragedy of the commons.

Let's apply this to the most visible example of the so-called panic we've seen so far, the oft-memed toilet paper shortage. There's no shortage if no one hoards toilet paper, right? So why doesn't everyone behave like good little rational robots for the common good? Because people aren't robots, and once there's a whiff that some preppers cleaned out Costco, there's a run on toilet paper because no one wants to wipe their butt bare-handed.

When a run is in progress, it's silly to go around squawking that if everyone just acted rationally, there'd be nothing to worry about. My rational observation is that people are irrational, and sometimes the rational act is to act irrationally.

In other words, if you see toilet paper, buy it.

As always, let me know what you think in the comments. I'll reply to you as soon as I can. If you're looking for something to do besides watch basketball or hockey, I invite you to read the first 4 chapters of my new book, Seeds of Calamity, for free. If it piques your interest, get yourself a copy at Amazon. I appreciate the support!

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