Privatizing the Dorm: A Practical Application of Economic Theory

It took 14 days for the six of us to realize that pigsties were for pigs, and that dorms probably shouldn't look like them. Space on the kitchen table was virtually always being used, which made for a miserable eating experience-- cluttered by the occasional newspaper or Cheez-it box that the owner didn't bother to pick up. When dirty dishes were so abundant that they inconvenienced use of the adjacent stove, I felt a piece of my humanity slip away and die, rotting amidst the garbage bags stacked 3-high by the counter top. What an atrocity of which my roommates and I were thoroughly guilty: the senseless waste of first-world human life in a state of utter squalor.

This was a time for action; a time for leadership.

And so we made this:

The 'Weekly Stuff' Chart- regularly featuring threats, as seen in the upper left-hand corner.

'Weekly Stuff' chart. A project spearheaded mostly by myself.

The concept is fairly simple: each week, each person will be assigned one of 6 tasks. They perform their task for the whole week, and if they don't, we shame them.

"Kitchen" meant doing the dishes and straightening everything else in the room to keep it clean.

A few of these are self-explanatory.

Eggs- 'community food' in dorm 232.

And the others-- "Bread/Eggs" and "Milk" were thrown in there with the reasoning that there would be some foods that each one of us would like to get every single week. We determined that milk, bread and eggs would be consumed by all of us on a weekly basis, so rather than have us each making our own separate runs to the store just down the road, we could have one person do it for all of us. The task of these people is simply to buy as much of the food that corresponds to their job as the community is willing to eat. This food is then labeled "community food", and can be eaten by any one of the 6 of us to our heart's content. All other foods would remain labeled with the owner's name-- not to be touched by anyone else.

Most types of food remain individually owned and labeled.

The Weekly Stuff Chart yielded some interesting results. Most notably, the amount of milk, eggs and bread consumed skyrocketed. When I served as our first milk man, the dorm got by on 3-1/2 gallons of milk just fine, but by the time Peter had gone for milk a few weeks later, we were barely getting by on 5 gallons. Our first egg-buyer brought 36 eggs to the dorm to last his shift, but it wasn't long before we had managed to consume 108 eggs in a single week. Bread was disappearing by the loaf, and the job of community food purchaser became a burden indeed.

Why did this happen?

Microeconomic theory holds that people will weigh the costs and benefits of their actions when determining what to do. It holds that people are economically rational, meaning that they will arrive at conclusions that maximize their personal advantage.

Suppose I decide to eat eggs. To determine how many eggs I will eat, I measure the marginal benefit and marginal cost of eating eggs. The marginal benefit is the benefit I gain for each additional egg I eat, and the marginal cost is the price I pay for each egg eaten.

The law of diminishing returns states that as I continue to eat eggs, they will gradually give me less benefit. After all, food tastes better when you're hungry, so it stands to reason that it will be less tasty to me as I start to fill up. Furthermore, as I eat eggs I will eventually get sick of them and desire variety, so in that sense they will also become less pleasurable.

Whatever the cost of eating eggs- it isn't going to change, per egg, as you eat more eggs.

This is represented by Figure 1-- a static marginal cost line, and a downward-sloping marginal benefit.

Fig. 1

The thing about eggs is that if I eat one, it's gone. Same goes for milk, if I drink a glass, or bread, if I eat a slice. Thus, if I'm the one buying, the marginal cost of these items is the knowledge that if I want it again, I'm paying for it myself. The more I have to pay, the higher the total cost.

It shouldn't be hard to see then how the concept of community food changes the graph-- marginal cost goes down. After all, if I eat an egg with the knowledge that somebody *else* is replacing it, it's no longer such a big deal. The cost of eating an egg is now essentially zero, a change represented by figure 2.

Fig. 2

As you can see, the quantity consumed has increased drastically, and for a relatively simple reason: if it costs me less to get the same thing, I'm going to get more of it. Note that in each case, the quantity of eggs (or milk or bread) is represented by the point at which the marginal benefit is equal to the marginal cost. This is because, rationally speaking, I'm going to keep eating eggs as long as the benefit outweighs the cost. Since the cost of eating eggs is close to zero in the case that they are community food, it stands to reason that I will continue to eat them until they cease to provide me any benefit at all (e.g. I'm totally sick of them).

Though unseen, this graph displays results that were fully realized by the members of our dorm as time went on. It then begs the question- is there a problem here? After all, what's wrong with eating more eggs and more bread if they're all being eaten?

The answer is yes, there is a problem. Because we're buying and consuming a lot of food that people don't actually want.

Even though the marginal cost *to me* is zero for eating another community egg, *somebody* had to go out and buy that egg, and the cost is imposed on them. When it's the egg man's turn to go out and buy 100 eggs for 8 dollars, only to have many of them be eaten by dorm members who barely want them at all, who end up valuing the lot at 5 dollars, he (the egg man) has performed an action that is of net loss to the dorm. It is rational for him to buy the eggs, because the rest of us have made sure to impose shame at a cost much greater than 8 dollars if he doesn't, but the end result is an irrational waste of resources.

This is a concept that no one else in the dorm fully understands, but the idea that massive community food expenditures like the ones we've been having probably aren't efficient is an idea that's resonating.

Much to the dorm's displeasure, other aspects of the Weekly Stuff chart fared badly as well.

The typical state of our sink, on a good day.

Also a good day.

Kitchen man rarely did the dishes, and the tables were exactly as messy as before. This is due to a couple problems:

1. The person who uses a dish or leaves out a mess is not the same person who has to clean it, meaning that dorm members have very little incentive to be resourceful about the messes they make.

2. There's only so much we can do as a group to inflict shame. We're not the government, so locking people up in jail or shooting them with a gun is off the table. This means on any given day that kitchen man is a little busy, if spending the time it takes for him to clean the amazing amount of mess six people can create in a kitchen costs more than the shame we can inflict, the messes will not be cleaned.

"Passable."

The refrigerator-- though technically the duty of kitchen man to straighten, was often disorganized and at oftentimes a complete mess. This brings to light another issue with community rules, which is that they are often hard to define. A "clean" refrigerator means one thing to someone who came from a house of perfectionists, and something entirely different to he who came from a house of chaos (you know who you are).

It is the nature of community jobs to be done to a bare minimum. Whatever one can get away with to avoid the consequence of shame.

"Highly questionable."

When it was suggested that perhaps Kitchen man simply had too much to do, we tried to divert work away from him and encourage a little personal responsibility through the creation of the "community standards" page (shown below). 

It details the process by which people are supposed to aid in dish washing and pick up to a certain degree. Kitchen man is still to do most of the work, but everyone should do their part with regard to their own things.

Once again, no significant improvements. It's nearly impossible to identify who ate with what dish when it's found in the sink, and so there's no way to accurately focus shame. When people ate from snack boxes and finished them off, the empty box wasn't really "theirs" anymore, because they didn't care for it, and so on the table or by the couch it would remain.

Our system is crumbling.

The Solution

Privatize, privatize, privatize.

I venture that all of our problems stem from "community." The irony stings in knowing that I made the Weekly Stuff chart and now in my lonesome advocate its abolishment, but there are many other changes that need to be made for optimum efficiency in dorm 232.

Let's start with community food, and why we don't need it.

If you'll recall, the initial reasoning behind the institution of community food was:

"We determined that milk, bread and eggs would be consumed by all of us on a weekly basis, so rather than have us each making our own separate runs to the store just down the road, we could have one person do it for all of us."

This turned out to be irrelevant for 2 reasons. Firstly, the store contains a great many products that each one of us uses on a regular basis. Everything from toothpaste to paper is a must-have, and as it turns out, each one of us makes a run about once a week anyway.

Secondly, there is a perfectly good community-less solution that has already manifested itself on multiple occasions: compensation. For one reason or another somebody needs to pick something up but they're too busy to do it, and a quick exchange between them and another guy lying around who does have time ensures a speedy delivery. "Go pick this up for me and I'll pay for your laundry" is perfectly applicable to eggs, or bread, or milk should a dire situation ever arise.

When I most recently suggested we abolish community food, a new concern arose: fridge space.

Milk gallons, the dorm mate reasoned, were both spacey and popular to buy. If each one of us bought a milk gallon every week, we could never hope to fit them all in the space we had. After all, nobody wants to buy half-gallons, since the milk to dollar ratio is significantly worse.

A legitimate complaint, to which I devised a new solution.

Rather than label milk gallons individually, we could *co-own* them. Consider a milk gallon labeled like so:

Of the remaining 2,822 grams of milk left in this gallon, the labeling indicates that I own 822 grams of it, and some Jared owns 2,000. When we purchased this gallon, I must not have needed as much milk. I would have payed him an amount of money relative to the percentage of milk I owned after the purchasing, and whichever one of us picked up the milk from the store would have received a premium from the other.

The following process is then used when I choose to drink from our gallon of milk:

1. Use as much as I want.


2. Weigh the milk gallon when I'm done using it, and make note of how many grams of milk are left.

3. Make a brief calculation to determine how much milk I drank.

4. Adjust the label to reflect how much of the milk in the gallon I now own.

This solves the problem of over-consumption in milk, since the marginal cost for me to drink milk is equal to the marginal cost of buying the milk (I'm the buyer), and also ensures that limited fridge space is conserved for everyone to leave milk there. In fact, since milk consumption would be reduced to reasonable levels, fridge space taken up by milk would be reduced.

The reasoning used here should apply equally to eggs, which can be marked individually. Bread doesn't suffer at all from this problem, for obvious reasons.

When I proposed my solution again, bread was officially removed from the Weekly Stuff chart community food list. Eggs and milk is a work in progress, with complaints on the other side regarding the inefficiency associated with having to mark up eggs and milk so intensely before and after use. It remains obvious that leaving these foods to the community poses a far greater harm, but if any readers can think of a more efficient labeling solution, I'd love to hear it. I'm considering a couple other ideas myself.

Allocating Space and Capital

In dorm 232, as is typical with dorms everywhere, all space, other than the rooms, is treated as "community space." Strangely enough, it isn't even thought of in this manner-- it's just assumed as the way things are. I attribute this to the way people are raised in American households throughout their pre-college education, but there could be other, deeper factors at play. All the same, many problems are solved when this space is owned by individual members of the dorm.

It's worth noting, firstly, that some spaces *aren't* worth distributing to individuals. The hallways, for example, are so infrequently used that they aren't really "scarce." Exactly as often as people desire to use the hallway can they use it, and between the six of us there is never a "traffic jam." Just as there is no price on air, and nobody owns it, there need be no price on hallway use, or ownership thereof.

In dorm 232, as is likely typical of other dorms, there are a dozen significant sources of capital owned by the community.

1. Couch

2. Kitchen table

3. Refrigerator

4. Stove

5. Oven

6. Microwave

7. Kitchen Sink

8. Dishwasher

9. Shower

10. Bathtub

11. Toilet

12. Bathroom Sink

All of these should be owned individually.

Note that they can be divided up in many cases-- no one person has to own the entire kitchen table, and I anticipate that no one person would. If each of us has a strong desire for some table space, and none of us has a great desire for more than a small amount, the table would be divided six ways.

Since we can assume that, in a state of community ownership, each one of us owns each item of capital to an equal degree, simply bid off each item-- the highest bidder gains ownership and pays the rest of the community an equal portion of the determined price.

For example, I could call a price of $10 for the couch. If you value it more highly then 10, you bet $11. When someone finally ends with the highest bet of $25, he pays each of us 5-- his dorm mates-- $5 dollars, and then obtains ownership of the couch.

Some items, like the table, can be divided six ways right from the start (assuming 6 random portions of table are essentially equal in value), and then if one desires more table space he can buy it off someone who desires the table space less, if such a person exists.

Keep in mind that if I own the couch, I have an incentive to allow other people to use it, for a fee, during the times I'm not using it. So resources are unlikely to go to waste.

The kitchen sink would never be loaded with dishes, because you can't leave your stuff on someone else's property. To use the sink and dishwasher you would pay a minor fee, and then return it to cabinet space that you own.

Refrigerator space would be used wisely because you wouldn't have much of it, and, if you could fit the stuff you have in less space, you could sell of the unused space to someone who wants more and make money.

This is the way in which problems are solved.