Ben: Liz! Before we started recording, I started digging into the archives.

Liz: What archives?

Ben: The Atlantic, from 1945. There was an article by this guy Vannevar Bush entitled "As We May Think". OK, so it's just after the war, and he's super optimistic—

Liz: The second world war?

Ben: Yes, that one. And he's he's super optimistic about the future of technology. And, you know, he predicts that people are going to be walking around with a walnut sized camera on their foreheads, that just takes pictures. And we're going to have all of the world's knowledge, like an encyclopedia in just like this tiny little microchip, that you can—micro film—that it just sits on your desk, and you just go in and you find whatever information you want.

Liz: Wait, like The Internet?

Ben: Yeah. And so everything is linked. He's often described as one of the people who like invented the concept of the hyperlink, though it was all speculation. Yeah, but he but didn't call it the web. These linked documents that he conceived, he called it: The Memex.

Liz: The Memex! So he predicted what the Internet was going to be. Lots and lots of memes.

Ben: Yep, nothing but memes. He said it would be used for like, work, but I guess that's the part that he got wrong.

Liz: Womp womp.

Ben: Yeah. Instead, it's, I guess, today—yesterday?—it was posting a picture of yourself as the final boss from a video game.

Liz: Oh, Yeah. I had Gritty from Philly.

Ben: Let's see. What was it before then, there was Bernie. There was Bernie in a folding chair.

Liz: Bernie's on Mars!

Ben: Yeah, I did Bernie in a—I can't say Photoshop. I'm not using Photoshop. I'm using Glimpse. I Glimpsed him into into a painting by Frida Kahlo. That was fun.

Liz: Okay, that sounds cool. But why are you telling me about this today, Ben?


Ben: Yeah, I guess the person who imagines the Memex thought it wouldn't be social, that people would just use it as their work desk.

Liz: Oh, so he really underestimated how social people are and how they use platforms like this to be social.

Ben: So today on our show, we're going to talk about emulation, and why people want what they think that other people want, and how that pervades everything, from fashion to toys, to memes to, you know, money.

Liz: It's gonna be contagious. Stick around. I'm your host, Liz Landau,

Ben: and I'm your other host, Ben Klemens,

Liz: And this is

Both: Pod, Paper, Scissors.

[Theme song snippet]

Liz: When I was a little girl, back in the 90s, every child wanted a Furby for Christmas or Hanukkah.

Ben: Okay, Liz, I existed in the 90s. But I don't remember. What What were the Furbies?

Liz: Furbies were these talking dolls that you could buy, and they didn't speak English. They started out speaking their own language. And the idea was that the longer you have the Furby, the more English it learns, the more it starts to behave as if you're taking care of a pet and nurturing it.

Ben: Like there were Tamagotchi. That was like, a couple months there.

Liz: Oh, yeah, I had a Tamagotchi back in `97.

Ben: Okay, so it's like that, but furrier?

Liz: Yeah, Furby was a doll that was covered in fur and had huge eyes and a beak.

Ben: Did you get one and love it until it grew to be a teenager and ran away?

Liz: My brother and I did not just have one, we had two. It was the thing that we wanted most in life. So even though it was a completely sold out toy, I believe eBay had recently launched. And my mom was actually able to get two Furbies on eBay. And we were totally delighted to train our Furbies. However, what we realized pretty quickly was that Furbies don't shut up. It got to the point that we couldn't sleep at night, because the Furby would just wake up and say [incoherent Furby babbling]. So I think it was my idea, I took the Furby and I put it—

Ben: So it was it was glitchy. Do you think you got a...refurbished Furby? [Liz pretends to be amused.] That's all I got. That's all I got.

Liz: I've never thought of that before.

Ben: So what did you do?

Liz: So in the middle of the night, I took the Furbies and I put them on a shelf in the bathroom and I put some towels in front of them so that we wouldn't be able to hear them while we slept.

Ben: What does this have to do with game theory, you ask? There are a couple of portions to why Liz and her brother wanted a Furby. One is supposed to be that they're super fun and delightful to have, which evidently is not totally the case. Is that right?

Liz: Okay, so furbies were highly advertised and highly coveted by other kids that we knew. So it made sense that we would want them also.

Ben: So that's another part, that there's sort of an extrinsic, social—

Liz: Extrinsic?

Ben: Extrinsic. It's like intrinsic, but you know, the opposite. So yeah, you have an int— Sure. Okay, we'll go with that. There's an intrinsic desire to have a Furby. Like if you lived on a desert island, nobody saw you and all you had was eBay shipping to you, maybe you would get a Furby. And then there's also the extrinsic motivation that other people are getting a Furby, that all of your friends know about it. You go to school, and you talk to your friends, and they're like, "Oh, I got a Furby". And perhaps in a perfect world, we could actually separate those. Especially given that you got the Furby and you evaluated the intrinsic joy of having a Furby and in the end, the Furby is in the back of the linen closet. So all of these things are well-studied and in Game Theory, and some game theorists in the audience will come up with other things, but I would class them all under the beauty contest. The beauty contest, Keynes's beauty contest—

Liz: John Maynard?

Ben: Yes, john Maynard Keynes.

Liz: Oh, John Maynard is a good friend of mine.

Ben: Wait, who is John Maynard?

Liz: Oh, he's my friend Atlanta.

Ben: Oh, okay. Hey, John Maynard, if you're listening, Liz says hi.

Liz: Hey there.

Ben: There you go. So yeah, you'll know John Maynard Keynes, because he, um, somebody once asked him, what about this economic model in the long run, and he replied, quote, "in the long run, we are all dead", endquote.

Liz: Wise advice.

Ben: Indeed. And that that, honestly, that's the thing I remember him most for. Because I didn't have a lot of macro background, especially not in the Keynesian school. He also came up with this example to explain money. So in his example, newspapers in like the 20s, they used to run these little contests, where you would fill in and clip a little coupon, and you would mail it in, and they would draw one out of a hat. And, you know, you'd win a year's supply of soap or something. In his imaginary example, I don't know if it ever happened, the newspaper would print pictures of 12 beauty queens, and you would go in and you would mark one of them and mail in your coupon, and of the coupons with the most popular woman marked, they would draw one and mail that person a year's supply of soap.

Liz: Okay, so you win if you pick the one that the most other readers voted for.

Ben: If I were naïve about it, I would just, I would go with the gothy one, right, just circle that one and mail it in.


Liz: Now, wait a minute, Ben, that sounds like your taste is very particular. And here, you want to go with the one that is not your particular taste, but what you think the average taste would choose.

Ben: That's a good point, that if I circled the gothy one, I'm probably not going to win. But I'm going to one-up you, because think about what what our neighbors are doing. They're also doing the same thing where they're trying to guess what everyone else wants. Right? So it's not just a question of guessing what other people are going to want. It's about guessing what other people think that other people want.

Liz: Yeah, this is getting all meta.

Ben: And we can meta this up as much as we want, yeah. Because the other people, they're not just thinking, "Oh, I need to work out what other people think other people want". No, no, no, they have to think about what other people think other—we could do this all day. Right? It's sort of an infinite regress.


Liz: How do we get out of it, then?

Ben: We don't. We don't. And we can talk about cognitive limitations. There are experiments run about these sorts of things, which I guess we can get to in a later date, I've run some of these experiments in a casual setting. Getting back to Mr. Keynes, this was his explanation for why money, right. Obviously, it's just a piece of paper. I don't know what it costs to print money, but it's like a penny, right? So why does it have value? Because you think you can go to the supermarket and hand it to the cashier. Why does the cashier think it has value? Because the cashier can hand it to somebody else, who thinks it has value? Why does that person—and so on, right? So that it's the same infinite regress, that we were just talking about with these beauty queens in the newspaper. Keynes had this example of how money works, right? But that same sort of storyline applies in lots and lots of other situations. Where you're looking to what other people are doing, and they're kind of looking over their shoulder at what you're doing.

Liz: Many hundreds of thousands of years ago, the early humans, they didn't know how to be. They didn't have Twitter, they didn't have fashion magazines. All they had were other early homo sapiens that they could emulate. And the people that were doing well, you know, you want it to be like them.

Ben: I believe you that this is hardwired into us that it's evolutionarily selected. Although I know you're an expert in that and we can debate, you can tell me about what counts as evolutionary selection versus I don't know, luck.

Liz: A lot of things are luck in this life.

Ben: Indeed.

Liz: You know, what else is a little bit like the beauty contest? That hot new app Clubhouse. Are you on Clubhouse, Ben?

Ben: No. So Clubhouse for those of you who are listening three weeks from now, it's the latest hotness, in which you—


Liz: Wait can I...

Ben: Go ahead.

Liz: Mean-x.

Ben: Whatever.

Liz: Clubhouse is an audio only platform where people can create essentially voice chat rooms. And right now, it's only open by invitation.

Ben: Also only open to Apple iPhone users.

Liz: I'm sorry, Ben...I would have invited you, aww.

Ben: Maybe I wouldn't want to—anyway, please continue.

Liz: So right now you have the situation where anybody who's on it can create a little meeting room. So you have very well-curated talks by very prominent people, and it's almost like attending a lecture. And then there's kind of Q&A and stuff. And then there are attempts to have kind of open conversation. And I've only gone on a few times, I just am not sure exactly how to get the most out of it. But I do know that it's a status symbol that I'm ready to flaunt. People love the idea of exclusivity. The invitation-only model of Clubhouse makes it all the more alluring, regardless of what Clubhouse actually is.

Ben: So okay, so we've got two measures, how would you rate it on extrinsic and intrinsic value? It sounds like you're not getting a lot of intrinsic value. Is that...?

Liz: Well, not yet. Not until I'm like, hey, MC Hammer. What's shakin'?

Ben: One of our podcast goals is to get MC Hammer on here. So yeah, when we when we have enough listeners, when those of you listening, share and cajole enough of your friends into listening to this, that this is what we're gonna do. That's our goal. Yeah, Liz?

Liz: Oh, yeah.

Ben: So you're saying there's a lot of extrinsic value that you want to be seen using this, and you want to see other people using it?

Liz: Yeah, if I go on Twitter, and I started talking about what an interesting conversation I just saw on Clubhouse, or conversely, "yeah, you know, this Clubhouse talk with this person wasn't that great", It shows that I am cool enough to have been invited to Clubhouse and that in and of itself has value.

Ben: It also has value in a more explicit sense, the way that that—what was it called? You were telling me about this, this little toy you had when you were a kid,

Liz: The secret diary! Oh my God. So yeah, in the early 1990s, Casio marketed this toy, Excited 1990s advertiser: When you really can't say what's on your mind, let the Casio Secret Sender 6000 do the talking. `Cause the secret sender can zap the secret message across any room.

Liz: It wasn't just a little electronic diary. It also could send messages to other people with the toy. And when I was, you know, nine years old, 10 years old, this was what I wanted more than anything else. I could not wait. And my poor mom, I think she drove like two hours in the snow to get it for me because it was the only thing that I wanted for Hanukkah. And while I did use it, and I did, you know, write some diary entries to myself, at the end of the day, I was kind of sad because, mm, no one else got it. So I didn't have anybody to send messages to. I was like, an early pocket phone pioneer.

Ben: Yeah, I guess it was a lot later before I got my first Palm Pilot. And for all these things, yeah, the extrinsic value is very clear. Your thing, be that clubhouse or your secret diary or what have you—which is not very secret if you can share—anyway, its value only comes from other people using it at the same time. The beauty contest, you're guessing at what other people are doing and so on. With Clubhouse, you show up and either there are other people who you want to network with or listen to, or there aren't. So there, it's pretty explicit, and we don't have to think very hard about it. But there are lots and lots of examples where there's this trade off between your personal intrinsic valuation of something and the extrinsic.

Liz: So Ben, what do we do with this information? What does it mean?

Ben: It means that there's this great unification across a lot of a lot of behaviors that people have. What examples have we given? We've given the Furby, money?

Liz: So wait a minute, Ben, does that mean that all of my preferences are actually based on what I think other people's preferences are?

Ben: I'm not willing to say all of your preferences, but it has to be some. And I agree with you that this is sort of built into how humans think. You know, everyone wants to think that they're individualist and that they don't imitate other people. I personally, don't think that that's especially possible. And you know, even people who are contrarians, they're contrarian in kind of like the same way, yeah?

Liz: Ah, like hipsters, who are actually, like, just emulating other hipsters.

Ben: Yeah, or the disaffected goth youth who are like, you know, "I don't want to imitate the mainstream". So instead, they all imitate other goths. So yeah, we'll cover more of these in the future. So tune in next time on

Both: Pod, Paper, Scissors.

[Exit music]

Ben: "But this long run is a misleading guide to current affairs. In the long run, we are all dead. Economists set themselves too easy, too useless a task if, in tempestuous seasons, they can only tell us that when the storm has passed, the ocean is flat again."