Monday, March 19, 2012

Credit checks and employment

An article from the Fort Collins Coloradoan caught my eye, in part because it deals with a similar issue to the "avoid ghetto" GPS app: whether giving more information can make people worse off.

The article discusses efforts by Colorado lawmakers to prohibit businesses from running credit checks on prospective employees and using the results in hiring decisions. Obviously, the reason employers run these credit checks in the first place is because they think the people with better credit tend to be more responsible and thus better workers, as well as being less likely to steal from the till. The argument for banning such checks is that they can create an "unemployable class" of people because people can't improve their credit without income and can't get a job unless they have good credit, and also that it's possible to have bad credit even if you are financially responsible (say because of a layoff).

The readers' comments are predictable. Most of them say that it's just wrong for employers to "discriminate" based on credit checks, while there is a minority view that the government should not have a right to tell businesses how they can make hiring decisions. (I would like to point out the comment by Jeff Emmel, in the first category, which blames the problem on "too many people chasing too few jobs." If true, this seems to negate the idea that credit checks are the problem. If there are N people looking for a job and there are M openings, then at least N-M people will fail to get a job, regardless of what methods are used to screen applicants.)

Here is my analysis. A traditional economist would likely say something like the following:

If credit checks really provided no useful information about the quality of an employee, businesses would have no reason to use them. Any business that did use them anyway for whatever reason would face a competitive disadvantage in the marketplace because they would be screening out qualified employees, and a business that didn't use credit checks could gain an advantage by grabbing all the good employees that were rejected by others. Thus, if the practice really has no benefits, there is no need for a law against it; it will die out naturally. If it doesn't die out, that is evidence that it is in fact providing useful information.

Of course, exactly the same argument was made with race, gender, etc. discrimination laws, and look how that turned out. But this case is different. The difference with racial discrimination was that customers had a preference against minority employees so businesses reacted to that, but we needed to get minority employees into restaurants and stores so that people would learn to overcome their prejudice. In this case, customers neither know nor care about the credit histories of the employees with whom they interact. Also, credit checks are a relatively new thing in employment, so unlike the issue with race discrimination, we're not starting from a status quo where everyone discriminates so nobody has a chance to realize what they're missing out on.

One could argue that it really is true that people with poor credit tend to not be as good workers, but that there's a public benefit to giving those people jobs that outweighs any harm done to employers. This position is not unreasonable; after all, someone who is consistently poor does cost society money to maintain because they are more likely to need welfare and other social services. But it is important to realize that this argument only applies if there is a greater public benefit to giving a poor-credit person a job than giving whoever the replacement would be a job. And most importantly, if there really is a public benefit to giving particular people or classes of people jobs, a better way to do it is with subsidies and incentives targeted at that group and let businesses decide whether the incentive is worth the cost, rather than through the indirect way of banning credit checks.

However, I can also think of several counter-arguments to the above.

1. It may be true that the practice will die out eventually if it is not providing useful information, but that could take a significant amount of time. In the meantime, many people will still be affected.

2. Let's say that half the people who have poor credit really are financially irresponsible, but the other half have poor credit for reasons completely out of their control. Then it makes sense from the businesses' perspective to avoid the risk, but the innocent half is still caught in the crossfire. (However, the arguments in the last paragraph above still apply.)

3. Suppose that it is possible to "manipulate" your credit rating*. Then everyone will manipulate their rating in order to get a better chance, but of course all this manipulation is a zero-sum signaling game, so it's a waste of effort. (If everyone manipulates their rating up by X points, then everyone is still in the same order so it gives exactly the same information as before, but nobody ends up better off.)

4. As for the comparison to racial/gender discrimination laws, there's another consideration which cuts the other direction. One problem originally identified with racial/gender discrimination laws was that it's essentially impossible for a business to prevent itself from obtaining information about an applicant's or employee's race or gender. Thus, for instance, a business might want to fire an unproductive worker but might have a difficult/expensive time proving in court that the firing was not because of race/gender, so it might decide not to. In contrast, it is very easy for a business to avoid obtaining information about an employee's credit history, so this is a non-issue.

5. It may be possible that there is a public benefit to giving jobs to certain classes of people - which tend to overlap with the people who have lower credit scores - but the first-best solution of "subsidies and incentives targeted at that group" is impractical due to other constraints such as political feasibility. So banning credit checks could be a good "second-best" solution.


Perhaps surprisingly (but maybe not), very few of the comments in the article itself or the reader's comments directly address any of the questions above. I wonder why?

*This "manipulation" need not be anything shady or illegitimate. The only thing relevant for this analysis is that the "manipulation" has no relevant effect other than improving your credit score. Given all the advice about "how to improve your credit score" that you can find all over the place, it's very likely that this type of "manipulation" is possible.

Saturday, March 17, 2012

Crusade of Legends

Last weekend I participated in a new LARP called Crusade of Legends. It didn't have nearly as much fighting as most of the other LARPs, but it was interesting in its own way.

When I got there, I had originally planned on being an NPC (non-player character) - in other words, I would play the monsters. I hoped to learn more about the game before deciding which character class to be. However I soon discovered I didn't want to do that, as after about an hour and a half of playing an NPC, I had spent about an hour and 25 minutes of that time just waiting in the "NPC" camp waiting to be called out. So instead I decided to switch to being a player character, and I created a character - a "sorcerer" who combines magical powers with melee combat - and rejoined the game.

Next, I got caught up to speed on some of the events of the day. I had learned that I had just missed an enthralling speech by the governor about taxes, and that there were goblins threatening the town. Speaking of taxes, the governor also told me that I would have to pay a piece of silver in order to become a citizen, and only citizens were allowed to brandish weapons in the town. (The money system is 1 gold = 10 silver = 100 copper, and all new characters start off with 5 silver.) I asked what happens if I wasn't a citizen and a goblin attacked me, and he said in that case I would have to retreat and find a citizen who could defend me. So I decided to just pay the money to become a citizen, and continued on.

Soon there were rumors of intrigue going around. A group of adventurers had gone into a "white maze", and when they came out they refused to talk about what they had seen. Also, there were stories about a "lich king" that was threatening the village, and the governor as well as a select group of guards were planning on going there to negotiate. Also, there were apparently some "shades" that were planning on coming out at night, and only special "magical light" spells and weapons could harm them. Of course I didn't have that, being just a new character, so I wasn't able to participate in any of these battles.

I did go out in search of adventure for a little while - someone else had told me he found a mysterious gem - a component for certain kinds of powerful "formal magic" spells - lying on the ground. We searched around for more such components, but the search was fruitless - there were no more components, and we didn't run into any goblins or other monsters. As night fell, I went back into the tavern, to have dinner and drinks (not alcoholic ones, of course) and learn more about the events of the day. I heard the governor and treasurer talking about the town's finances - apparently they were in debt to the lord from whom they bought the land to set up the town. They were discussing a proposed tax of 2 copper per month per citizen, or a total of 4 silver per month for the total population of 20 citizens. Also, the captain of the guard needed guards for the night. He needed two guards in each of three shifts - 8:00 PM to midnight, midnight to 4:00 AM, and 4:00 AM to 8:00 AM, and was paying 2 silver, 6 silver, and 4 silver respectively for each of those shifts. I wasn't exactly sure how the town as going to get the total of 24 silver (actually, 36, because I think they ended up hiring three guards instead for each of the shifts) with only a total tax revenue of 4 silver, but apparently there is some other source of money I didn't know about. Also, I learned about a protection spell that could be cast on the tents and the tavern in order to allow us to sleep in peace - the way it worked was the spell could be cast at any time, and the protection would be in effect from 2:00 AM to 9:00 AM. I asked why they needed overnight guards if they had the protection spell, and he said that it was necessary because the enemy might have ways of dispelling the protection spell. Sitting outside in the cold for 4 hours overnight didn't really appeal to me, so I decided not to take the guard job.

Instead, I spent the night in the tavern listening for more information. I also found a deck of cards lying on the table, so I played a gambling game with a fellow patron (which I will talk about in another post). But I did get to see some interesting stuff going on. A "Grand Inquisitor" and her minions came into the tavern to find out what we knew about the "malediction" that was apparently sweeping the lands, but she also aroused some suspicion when she asked us not only about the malediction, but also about our respective fighting styles. Also, the governor temporarily kicked us out of the tavern without explanation for a meeting that was going on inside the tavern, and while we waited outside one of the other people kicked out tried to convince us to go back in, assert our rights, and demand an explanation. The meeting ended before we decided whether to do this, but we later learned through the grapevine that the topic of the meeting was fairly innocuous (something about a "traveler's guild" that wanted to set up shop) and not anyone plotting against us or anything (although we didn't really understand what was so secret about it).

Also, a couple interesting issues came up. Apparently, two priests had abandoned the god to which they originally worshiped and tried to switch to a different god for the purpose of getting the powers of the new god to help defend the town against the "lich king" and potentially other threats (I wasn't sure of the full details). However, after abandoning the first god, the priests discovered that they needed to make a "blood sacrifice" to gain the new god's power. Somewhat surprisingly, it was fairly easy for them to find people who were willing to be sacrificed*. However, they were later put on trial for murder, and the magistrate got together a vote of the town's citizens, who voted to change the law to allow for legal blood sacrifices (as long as the victim is willing, of course). This decision was not without controversy as some thought that blood sacrifices were inherently evil. Another in-game legal issue came up the next morning, when an orc charged into town brandishing a sword and demanding the return of a special glove (again, I was never sure what was so important about the glove). Some citizens quickly ambushed and killed the orc, and there was some discussion over whether or not that act was legal self-defense. The magistrate said that it was, but another citizen said that it wasn't, because, as he pointed out, the town laws define assault as "an action to harm" someone else. Thus, according to this definition, assault would require actual harm, so for instance if you swung your sword at someone and missed, it wouldn't be assault. Thus, the orc had not yet committed any crime, so it was not legal self-defense to kill him. Thus citizen said that if the magistrate meant for a situation like this to be self-defense, he should change the law to include something about "intent to harm" in the definition of assault.


Overall, I thought that this game was very different than any of the other ones I have participated in. One negative about this game was that it seemed like I wasn't able to participate in most of the action - I observed a lot of interesting things (as I described above) but I didn't get to do much actual fighting, and I never got a chance to go into the maze, go to the negotiations with the lich king, participate in the discussions about finances or the traveler's guild, etc. In some sense this seems like just the nature of the game - you can't expect to just walk in and participate in high-level discussions about (in-game) politics in the way that you can just walk in, pick up a (foam) sword, and start fighting. I also noticed that most of the fights were very one-sided - any monsters that attacked us just died within moments, and never posed much of a threat. (This is in contrast to when I played Nero, where there were a lot more monsters that came in waves, so we really felt besieged and had to manage our resources well to defend ourselves.) In the car going back, I pointed that out, and was told that the point of the monsters was to advance the story, not really to pose a threat. I was told that it was a good idea to come back, because as I participate more "plots would develop around me" and I would get more of a chance to participate in the action.

I probably will go back, although I'm not sure exactly when. There was a lot of exciting stuff that happened, but whether this is a game that I want to stick with long-term really depends on whether the promised "plots" actually materialize, and how good they are. Also, I learned that there is a Nero gropu that is running an event March 23-25, and I will try to make it to that one. Nero seems like it might align more closely with what I want, because it has the "you're in character for the whole event" thing as well as lost of role-playing and story, but also has a lot more combat.

That's enough for this post, but I'll try to post more posts in the next couple days where I explain the gambling game I learned as well as more discussion of the legal issues mentioned above.

*In this game, if you die, you can easily get resurrected at a resurrection circle. On your third and subsequent deaths - and the deaths do accumulate from event to event - you have to draw a bead from a bag and risk getting permanently killed and having to make a new character, but the level of combat is low in this game so it is relatively easy to avoid getting killed if you are at risk. Also, it is possible, if you are a human character, to purchase a special power that allows you one "free" death per event.

Tuesday, March 6, 2012

Oil subsidies

The article "Time To Put An End to Big Oil Subsidies" by Allen Greenberg, in the Northern Colorado Business Report, draws a contrast between farmers, who have stated their willingness to forgo subsidies in a time of high deficits, and oil companies, who want to keep their subsidies. While I generally agree with Greenberg's position that oil subsidies should be reduced or eliminated, there is one sentence in there that does not make much sense: "it should be easy to recognize that subsidizing a profitable business simply makes no business sense." This does not seem correct to me. The point of subsidizing something is to increase the maount of it, so it can potentially make sense to subsidize anything you want to increase the amount of - whether it is currently profitable does not enter into it. (In particular, assuming efficient markets, in an equilibrium condition any productive activity has a net profit of exactly zero on the margin - if the marginal profit was positive, people would do more of it; if the marginal profit was negative, people would be doing less of it. Putting in a subsidy makes it more profitable, which leads people to do more of it until it's not more profitable anymore.)

Also, a policy of only subsidizing activities which are currently unprofitable could easily have perverse effects. For instance, companies might deliberately try to be less efficient so that they would be "unprofitable" and thus deserving of subsidies.

EDIT: Link to article is here.

Sunday, March 4, 2012

Returning to the battlefield, part 2

This weekend I went to both Dagorhir and Amtgard. I had a pretty good time at Dagorhir, although unfortunately the "new angle on the action" had to be postponed due to technical difficulties.

My experience at Amtgard was far more mixed, however. The play-test had to be cancelled because the people who were supposed to be running the play-test were coming down from Wyoming, and it was too windy for them to make the drive down here (apparently part of the interstate was closed, because the wind was so powerful there was a risk of blowing cars off the road). Fortunately there wasn't much wind down in Fort Collins so we were able to do some fighting. Unfortunately there weren't that many people there, so all we could do was some ditch fighting (melee only). So that wasn't my favorite. Apparently this Amtgard group mostly doesn't like doing battlegames unless there are lots of people there, and they rarely get that many people except during the summer. But I did tell them about some of my ideas for some battlegames that you could do with fewer people, and they thought that my ideas could be good and that I should run for Champion so that I can put my ideas into practice (currently there is a bit of a "power vacuum" and they don't have any Champion at all).

I also got to look at some of the new 8.0 rule changes (even though I didn't get a chance to play with them) and there are lots that look interesting. Arrows are much less effective against armor, but archers also get lots of special arrows and powers (like "Reload", which lets them "go insubstantial" and go around the field unhindered to retrieve their spent arrows) that make up for that. Another big difference is that they are planning on removing most, if not all, of the abilities that require you to pretend not to notice things. For instance, in the current version there is a "Teleport" spell that allows you to move to somewhere else on the field, and you "cannot be noticed" while in transit. I strongly dislike these abilities for the following reasons:

1. There is too much room for interpretation regarding what is and is not permissible. (If you see someone teleport, and they are moving toward a game objective, are you allowed to go toward that game objective to defend it on the assumption that even though you didn't notice him, you could guess they are going for the objective? Or can you not go defend the objective at all?)

2. There is too much room for argument on whether a particular action was legal. (Did he go over there to get away from the teleporting guy, or because he was going to attack someone else?)

3. It's actually very difficult to behave exactly the same way as you would had you actually not noticed him. (If you hear someone behind you, you'll naturally start paying attention that direction just by instinct.)

4. It rarely leads to interesting game play. For me, at least, the interesting game play part of these types of "secret movement" mechanics is the guessing and keeping you on your toes: Where do you think he went? What could his plan be? how can you protect yourself from all the possibilities? But if you actually know where he went and just have to pretend not to, that whole "mind game" aspect is lost. The question becomes not "Can I anticipate what he will be doing" but rather "Can I justify doing what I want to do without reference to knowledge of where he is moving towards?"

In general the whole thing makes me think of those philosophical paradoxes about what it means to "intend" to do something (because you can't move somewhere for the purpose of responding to the teleport, but you can do it for some other reason). Which isn't necessarily what I want to think about in the heat of the action.

I'm really looking forward to Crusade of Legends next weekend. I think that they will do a lot more of the things that I actually like (with spellcasting and powers and such) and they are more story-based, so it's more likely there will be interesting things to write about on this blog.