What’s wrong with a 10% chance to win $10?

So I finally managed to get a ticket to New York Tech Meetup. The day after I got the ticket I found out that I would be travelling on business on Tuesday and would not be able to attend. Bummer.

These tickets are notoriously scarce and highly sought after. Within several minutes of the tickets being released, they are gobbled up by some 700+ lucky attendees at $10 a pop. The unlucky rest ends up trolling the meetup message board¬†where they have to resort to all sort of unsavory shenanigans to score a ticket — mostly groveling, begging, offering to pay above value, and then groveling and begging some more.

I didn’t feel like selling my ticket to a random stranger. Instead I decided to turn it into a social experiment of sorts. I wanted to see what people were willing to do for a chance to win this ticket, so what I did was to offer to give the ticket away to one of the next 10 people who would follow me on Twitter. It’s a simple idea, really.

In a perfectly rational world, I expected a lot of people to jump at this opportunity. There are no tickets left, people are overpaying for tickets as much as $30, and here is a perfectly fair 10% chance to win a ticket without paying a penny or doing any real work. You have absolutely nothing to lose by following me, and you can always unfollow later. The average reward would be valued at $1, which is far better than what you get in Vegas or with your state lottery.

Astonishingly, in the first hour after I announced my plan on the message board only 3 (!) new followers have taken the bait. What would explain this seemingly counterintuitive behavior?

  • People don’t understand probability and therefore don’t act rationally even when the stakes are straightforward.
  • People prefer simple, timeboxed transactions. (I didn’t specify when the drawing would take place.)
  • People prefer transactions with guaranteed outcome. If a ticket turns up, then it’s easier to pay now than to wait for a “certain” 10% chance of winning it at an uncertain time in the future.
  • People are irrationally afraid of untrusted, potentially fraudulent sellers (that would be me).
  • People are not on Twitter. Or they are on Twitter but are so snobbish about whom they follow that they won’t follow me.

In all likelihood, the reason for not following me was some combination of the above. The ugly truth is that compelling people to act in a certain way is just damn hard, not to mention fraught with assumptions that don’t hold up in a real experiment. Human behavior is deceptively unpredictable but totally worth $10 to learn something about.

And congratulations to @andresblank on winning the ticket. :)

2 responses to “What’s wrong with a 10% chance to win $10?

  1. Another item for the list: you might have been lying and not give the ticket to anyone.

    Oh and one more: context. People who are on the message board are primed to get a ticket, not to earn a free dollar or a 10% chance at a ticket.

    If you had posted the same offer on a mailing list where people make money by doing things on the internet, I expect you would have been flooded with takers.

    • Definitely agree with those points, although I was really surprised that having practically 100s of people desperate for a ticket didn’t automatically imply that they would all jump at a 10% chance to get one. The lottery ticket was effectively free too.

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