Dear Economist

Share and share alike?

Dear Economist,

From time to time, I go out with friends to a restaurant. Frequently, someone suggests: “Why don’t we order a number of different dishes and share them?” I do not like this idea (because it is messy and it dilutes the pleasure of choosing), but once the suggestion is made, it seems churlish and anti-social to object. How can I break this cycle, while retaining my friends?
— Mr K., Dublin

Dear Mr K.

I feel the same way. Why should I be obliged to trade my rare steak for some fool’s chicken Kiev? Still, there is more to this than simply finding a polite way to object.

The difficulty – insoluble at first sight – is that while you dislike the fuss, other people enjoy having their meals chopped up like baby food. Sharing should occur if your irritation at the practice is outweighed by their delight; and should not occur otherwise. Who is to make this judgment?

Fortunately, the Coase theorem, developed by the revered economist Ronald Coase, predicts a happy outcome if property rights are clearly specified. Rather than refuse outright, you should insist that each person holds ownership rights over the dish they order. Mutually agreed trades are of course permissible. This should ensure that splitting dishes occurs only when socially efficient, and you will not be obliged to participate, although an excellent offer of compensation may persuade you to do so.

According to the Coase theorem, your problem until now has been that property rights over dishes have been vague.

I should caution you that the theorem does not hold if the costs of holding discussions are high. Economists often fret that “It’s not easy to get all the negotiators around the table.” Given the context, that should be the least of your worries.

First published at ft.com.

23rd of April, 2005Dear Economist • Comments off