Bryan Caplan  

Take a Guess

Perry Mehrling, Fischer Black,... Economic Literacy Via Philosop...

One of the most frustrating things about non-economists is their reluctance to guess. Latest example: Today at the repair shop.

Mechanic: The freon's going to leak out unless we replace the compressor.

Me: How fast?

Mechanic: Don't know.

Me: Could you take a guess?

Mechanic: Nope. Could be tomorrow, could be a year.

You could say that the mechanic doesn't want to convey a false sense of certainty. But surely I let him off the hook when I asked him to guess, didn't I? You'd have to have an awfully short fuse to get mad at someone for being wrong after explicitly asking them to guess.

Or maybe people don't guess because they're afraid of looking stupid if they're wrong. Remember Harbaugh's skill-signaling model? But this shoe doesn't fit either. Doesn't a person who refuses to guess show a lack of confidence in his own skill? If anything, skill signaling should lead people to mislabel their guesses as fact - not stonewall.

Despite my frustration, I have to assume that I'm just a weird customer. In a competitive environment, I have to think that mechanics refuse to guess because refusing to guess is more profitable than guessing. So what gives?

P.S. Even when a mechanic refuses to guess, that doesn't stop me. My guess was that the freon would last me through the summer, so I told the mechanic to go ahead and put it in. Still, it would have been nice if the expert gave me more information to work with.

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The author at Opiniatrety in a related article titled Norms of Guessing writes:
    via Marginal Revolution, Bryan Caplan writes: One of the most frustrating things about non-economists is their reluctance to guess. Latest example: Today at the repair shop.Mechanic: The freon's going to leak out unless we replace the compressor.Me: Ho... [Tracked on April 14, 2006 1:22 AM]
COMMENTS (35 to date)
conchis writes:

I wonder whether part of the problem is an ambiguity in what we want from a guess. There are (at least) 2 ways to interpret the concept. One - which is what I suspect most economists would think in terms of - is an expected value. But I'd suspect a lot of people think that, in order to warrant a guess, they'd intuitively need to place above a certain probability on a single outcome.

If I'm right, then you might have got an answer if you'd asked something like "what's the chance it'll last through the summer". But maybe it really is just reluctance to put it on the line. (Or, in this case, more likely an incentive problem. If he conveys the idea that it could be tomorrow, he's probably going to get business from a bunch of risk averse types.)

Dave Milovich writes:

It's an incentives problem. In refusing to guess, the mechanic was trying to scare you into replacing the compressor. It didn't work on you, but perhaps you are less risk-averse than his typical customer.

Moreover, by refusing to guess, he forced you to guess. In my experience, the pyschological cost of regret associated with my incorrect guesses is higher than that associated with relying on others' incorrect guesses. By forcing you to guess, the mechanic makes it more likely that you'll take the safer option of replacing the compressor.

Chris writes:

Once you have dealt with a couple pain-in-the-ass customers that want to hold every spoken word as a verbal contract it's easy to understand why people in the service industry don't like committing to anything.

As far as your mechanic knew he would guess and when he was wrong you would come back and verbally harass him demanding your money back (or repairs paid for if it caused further damage).

There is a vocal minority of customers that want something for nothing and as a service industry employee I take great pains to avoid them (unless I have a history with them, BOCTAOE)

Silas Barta writes:

That's a very good point, Chris. There's a big problem in a lot of service-related businesses of a few bad apples screwing it up for the rest of us. Like the waitstaff's habit of coming back a few minutes after your entree is served and asking (as if quite accustomed to the routine) "is everything alright?" Translation: "If we screwed up, you better say it now so you can't eat most of the meal and then demand your money back, you slimeball." They've also started to demand that you cut e.g. a steak to demonstrate it was what you asked for.

(Side note: And I've always wondered precisely what that is intended to accomplish. The few con artists who are clever enough to plan that trick and pull it off will certainly have anticipated the eventuality that you will respond to his refund demand with "Oh yeah? It wasn't good enough? Well, THREE MINUTES after we served it, we asked if everything was alright, then you NODDED and GRUNTED! That was conclusive prove that your meal was okay, and any attempt thereafter to complain is clearly fraudulent!")

If you know anyone who does this kind of thing, PLEASE let them know how they're screwing it up for the rest of us.

Austin Massey writes:

I bought some shares. Will the price be higher or lower a year from now? Will you won't you take a guess?

If reliable AC is very important to you, you'll get a new compressor.

Comrade Crackdown writes:

This is all the fault of capitalism. After the revolution, there will be no freon!

Matt writes:

I've got some sympathies for the mechanic on this one. How the heck is he supposed to know how fast the freon is going to leak out of your coolant system? His answer sounds reasonable to me, if lacking in salesmanship.

Also, you may not be the type to get mad at a mechanic for being wrong after you asked him to guess, but plenty of customers would, especially if they spent money based on his guess.

dsquared writes:

I think he did give you a guess. Component time to failure is a bimodal distribution - the famous bathtub curve.

He identified the two modes for you (there's one tomorrow and one in a year's time). That's much more informative than giving you the mean expected time to failure, which would have been an outright misleading estimate of six months.

(yes yes I know that the bathtub curve doesn't really apply to products in use, I'm joking you pedantic buggers).

Dave Milovich above gets it right. Why should the mechanic risk you not getting the new compressor if you give you an estimate that's far enough in the future for you?

jaimito writes:

Please transmit my sincere sympathy to the mechanic.

How aggravating can be trying to provide a fair sevice to pesty customers such as professional economists. They presume one´s sole goal in life is to maximize profits and each carries in his head a fine tuned super computer that calculates to the sixth decimal point the profitability of each alternative word and action.

Gas is leaking nonstop from all compresors, and used compressors with worn rings leak gas faster. In general, compressors dont break down in one dramatic event, but they lose increasingly more gas till the user notices the loss of performance and increased gas consumption. Each compressor has its own typical cumulative use/gas loss velocity curve, and you certainly could calculate the point where the cost of compressor replacement crosses the curve of all additional costs of a progressively leaking compressor. Wornout compressors can also be leak proof again by changing rings and oil and tightening up all the screws etc. But current practice is to change all accessories showing signs of possible future breakdown, to avoid trouble to the owner. The cost of the accessory itself is generally only a small part of the cost of the repair, so once in the shop it is better to change all suspect units. It is called preventive maintenance as against breakdown maintenance. It commonly includes replacing perfectly good parts much before they break down.

The mechanic did the right thing in avoiding a direct answer to Brian's questions, since any specifics would have involved him in an endless academic debate. Competent mechanic time, and not spare parts, are the scarcest resource in a repair shop. It certainly costs more than an economist time.

Lauren writes:

I think profitability is the hands-down motivator, but the government has done a little meddling with profitability in the particular case of air conditioning by mandating phasing out Freon in the next few years.

In general, if the odds are uncertain, what is a mechanic's incentive to lay out the odds for a customer? By offering better service in the form of an educated guess, he can buy himself future customer loyalty and hence future profits. But in the case of air conditioning, this ordinary stream of discounted future profits is dwarfed when compared to the profits stemming from the government's new rules on phasing out the air conditioning refrigerant Freon, which requires whole new units in the next few years.

Three years ago I had the same experience with my central air conditioning unit. According to the service's mechanic, it had a "slow leak". Identical conversation ensued: "How slow?" "I don't know." "Aw, how about taking a guess? Will it last another year or two if I keep re-filling it?"

I'll bet my smile was more beguiling than Bryan's, because the real answer was hidden here:

"It might, but it really depends on a lot of factors. And, the Freon's going to cost you more each year. The price has already gone up because it's so hard for us to get. The new government environmental standard of switching to Puron has meant that there are fewer Freon producers, so it's getting harder for us to buy. You might want to consider buying a new Puron-based unit."

I bought the Freon. The price did indeed go up each year, but my air conditioning held out for three more summers.

This past year I replaced the air conditioning unit because I got a good deal when I did it jointly with replacing my furnace, which really wasn't going to last another year. The air conditioner would probably have lasted another 10 years, and if the cost of Freon weren't going up because of the government's regulation, would have been worth keeping.

zul writes:

Kaplan is brilliant. But I suspect he's a real pain to deal with as a customer in places like repair shops and dentist offices.

DanT writes:

The mechanic may have performed a subliminal information quality analysis and rightly concluded to leave the guessing to you.

The rate of leakage varies extremely widely (one day to one year). Freon leakage rate could be highly dependent upon variables such as quality of the compressor when manufactured, quality of cooling system installation, quality of prior service of cooling system, and probably most importantly cooling system use (did you drive through a mountainous desert with the AC on high for weeks?). Leakage rate can only be estimated with some knowledge of all of these, but maybe 3 in 100 customers care about that.

The cost of gaining enough information of sufficient quality about each of these is higher than the cost of replacing the comressor, at least for the mechanic. The mechanic could have explained this, but this only upsets 97% of his customers - which is a bad economic decision.

You, on the other hand, know your cooling system service and use history, and can estimate initial quality and installation quality based upon car brand and specific car history.

The quality of your knowledge being higher places you in a much better position to guess the leakage rate.

In the future, you might consider treating the mechanic as a consultant by asking a follow-up question, "How can I guess how fast the coolant is leaking?" If not too busy, he might respond.

Bob Lawson writes:

You think it's hard to get your mechanic to make an estimate, try it with your doctor some time.

Doctor: You have cancer. [I don't but I've been in the room at the time with someone who was diagnosed with cancer.]

Me: How long do I have?

Doctor: I don't know.

Me: Can you guess?

Doctor: No. A month...maybe a few years?

Me: What are my odds with treatment?

Doctor: I don't know.

Me: Can you guess?

Doctor: might work. It might not.

Taggert J. Brooks writes:

Perhaps he just understands Frank Knight?

“[Any given] ‘instance’ so entirely unique that there are no others or not sufficient number to make it possible to tabulate enough like it to form a basis for inference of value about any real probability in case we are interested in. The same obviously applies to the most of conduct and not to business decisions alone.”
-Frank Knight

scottynx writes:

I humbly suggest that you find a new mechananic.

Timothy writes:

Couldn't one just measure the rate of freon leak over a period of time, then determine how long until all of it was gone? Eliminates the need for guessing, and simple to boot.

eddie writes:

"You'd have to have an awfully short fuse to get mad at someone for being wrong after explicitly asking them to guess."

And thus we learn that Bryan is in the academy and not the service industry.

wph writes:

If he won't guess you can ask for an estimate of the entire distribution: What is the probability it will leak by tomorrow; from tomorrow to a year from now; a year to 5 years etc. If you ask for enough points maybe he will get frustrated and just give you your guess.

G. Roper writes:

Freon is (relatively) cheap, compressor + installation is expensive. If the mechanic's best judgement was that the Freon could leak out tomorrow or in a year, then the obvious (cheap) test is to add Freon and wait. If the A/C doesn't work tomorrow, you'll need a new compressor. Otherwise, just periodically get the Freon pressure checked and supplemented if need be.

BTW you can buy a cheap unit at an auto shop and do this yourself easily: take the protective cap off the A/C charging connector, screw in your new Freon charger and test away.

And when economics jobs are outsourced to India and China, you'll still have a marketable skill!8-))

Max writes:

I don't see a problem with the mechanic - not only did he guessed, but he presented it in a form of a confidence interval!

John B. Chilton writes:

Sir, tomorrow is the drop date. I got a C- on the first test. Should I drop your course?

David Huebel writes:

I often find myself in the mechanic's position. Your expectation that he provide a guess is prima facie reasonable, but wrong. He was an expert, so he must have had some expectation about how the freon will last, right? You had no idea at all, so you wanted him to convey a little bit, even the smallest datum, of his understanding to you. This is reasonable, but it assumes that he knew more than you do.

If he really had no idea how long the freon would last, then you were already in perfect harmony with him. From his point of view, anything he said would have made your understanding of the situation worse. That is an excellent reason for refusing to make a guess. He did the best possible thing by revealing how little he knew.

jaimito writes:

Freon is bad for the atmosphere. Leaking freon gas into the atmosphere is harming the commons, in addition to expensive.

Preventive maintenance is the practice of choice today. Accesories such as compressors are relatively unexpensive, they are not repaired anymore but authomatically replaced. In factories, replacement is by hours worked so many perfectly good accesories get thrown out. It is much more effective than testing each small cheap accesory or spare part. Mechanic time is a scarce resource in a repair shop, half an hour of explanations costs more than the whole thing.

Paul N writes:

I agree with Bryan completely.

I'm new in town, and I was looking at houses in neighborhood A, which has good schools. I ask the real estate agent: "How much less would the same house be if it were across the street in neighborhood B (bad schools)?" She: "You can't just make that sort of comparison. Every house is different." Me: "Well, as a rough estimate, how much more do similar houses in this neighborhood cost?" She: "There are so many factors that go into the price of the house, size, location, condition, appearance, it's impossible to estimate." Me: "But let's imagine there were the same house in both neighborhoods, how much more would one cost? If all of a sudden a house got switched to neighborhood B from neighborhood A, how much would it drop in value?" She: "A house would never switch boroughs. And you can't find any houses in neighborhood B that are the same as in neighborhood A." ...

Matt writes:

Problem is, in a lot of places, a "guess" by an auto mechanic is considered, by state law, a binding contract.

You want your mechanic to be willing to guess like an economist or a reasonable human being would? Take it up with the state legislature, and tell them to stop threatening to punish him if he guesses wrong.

rmark writes:

"installation is expensive. If the mechanic's best judgement was that the Freon could leak out tomorrow or in a year, then the obvious (cheap) test is to add Freon and wait. If the A/C doesn't work tomorrow, you'll need a new compressor. Otherwise, just periodically get the Freon pressure checked and supplemented if need be." Is this legal?

Jens Fiederer writes:

When you are a subject matter expert, even your "guess" is given a certain weight. When that weight is unwarranted (expert feels that the expert opinion holds no more value than that of the uninitiated) refusing to guess is just a matter of honesty: sorry, your guess right now is as good as your own guessing!

In your case, though, the expert was actually providing some information...vague, but as good as he could do.

Tom writes:

The mechanic should have asked what the high, avg temps. will be during the summer. How many hours do you expect to run the system at high or low? Too many variables, and as DanT above stated, the cost of the information is much more than the cost of just replacing it.

As Bryan stated "You'd have to have an awfully short fuse to get mad at someone for being wrong after explicitly asking them to guess."

My guess is that most people would hold him to his as he is a professional and 'should' know this.

Tom writes:

"One of the most frustrating things about non-economists is their reluctance to guess."

Of course it is also frustrating when economists DO guess when they actually have so little information.

michael vassar writes:

I think that the concept of probability as something quantifiable is not at all intuitive for most people and is not really part of the background culture.

Noah Yetter writes:
You could say that the mechanic doesn't want to convey a false sense of certainty. But surely I let him off the hook when I asked him to guess, didn't I? You'd have to have an awfully short fuse to get mad at someone for being wrong after explicitly asking them to guess.

Clearly you've never worked in customer service. On any given day, the probability that someone will outright ignore your instructions when trying to help them, or berate you for doing something they asked you to do, approaches 1.

Robert Speirs writes:

"Freon is bad for the atmosphere". My, God is commenting now. What an honor.

jaimito writes:

Robert Speirs,

Not God but the EPA has spoken. It is not the same thing, since EPA does enforce what is written in its tables.

Freon is a CFC - are trichlorofluoromethane (CFC-11) and dichlorodifluoromethane (CFC-12). In the mid-1970s, scientists at the Univ. of California, Irvine identified CFCs as the cause of ozone depletion in the upper atmosphere. When CFCs are released into the atmosphere, they move to altitudes ranging from 25 to 40 km. There, they are dissociated by ultraviolet light. The resulting free chlorine atoms (Cl) decompose ozone (O3) into oxygen (O2), Cl+O3 and ClO+O2, and are regenerated by interaction with free oxygen atoms (O), Cl+O2. When chlorine is regenerated, it is free to continue to break down other ozone molecules. This process continues for the atmospheric lifetime of the chlorine atom during which it destroys an average of 100,000 ozone molecules.

Ozone is vital to human and animal survival because it is responsible for the absorption of the sun's ultraviolet light. Without this protection, blindness and skin cancers result from penetrating ultraviolet light. In 1987 an international treaty, the Montreal Protocol, called for reducing CFC use by 50% by 2000. A 1992 amendment to the treaty called for the end of CFC production by 1996.

Freon became a target of the Clean Air Act, which was written in part to implement the provisions of the Montreal Protocol. The Clean Air Act is implemented through regulations that are developed, promulgated, and enforced by the U.S. Environmental Protection Agency (EPA).

The use of Freon was ordered phased out, and all production in the U.S. for those purposes stopped as of December 31, 1995. The Freon being used now to service existing mobile air conditioning systems must come from stockpiles and recycled product.

An active international black market in Freon has developed.

Strictly speaking, Freon does not harm the atmosphere, it harms people.

The Haggadah of Pessach mentions four categories of boys. One does not know what to ask, it is the dull one. But I would guess your role in the table would have been "ha motzee et atzmo min ha clal" i.e. the one taking the position of "Ma lee ve la hem" ("Its your headache, not mine").

Tom Hanna writes:

"In a competitive environment, I have to think that mechanics refuse to guess because refusing to guess is more profitable than guessing. So what gives?"


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