Drink driving, experience goods, and video games

Some Canadian developers are making a computer game which simulates driving home drunk. They and police think it will be a great educational tool, showing teenagers how dangerous it is to drive while intoxicated. I’m not sure if I completely agree.

Assume that this game will realistically represent driving while drunk. As some people do get home when driving drunk, there must be some probability of getting home without crashing. Since teenagers can play this game over and over again, they can get better at not crashing in the game, which may make them think that they are less likely to crash when they actually drink and drive. Now it might do this, or it might just give teenagers a false belief of being good at drunk driving (given that the road and obstacles will be different on your home road). However, if our teenagers are rational this shouldn’t be the problem (as they will update their beliefs appropriately), the problem is that drunk driving is an experience good with negative externalities.

People who haven’t gone drunk driving don’t know how likely it would be that they would crash, they are uncertain (they don’t know the probability density function and so base probabilities on arbitrary beliefs). Once someone has consumed drunk driving, they gain information, and they know what the risks are when they drive. Now if current social advertising his mis-led teenagers, to believe that the risks are greater than they truly, a situation with no computer game may be preferable to a situation where kids have played the game.

Although full information is usually preferable, teenagers decision to drink drive has a negative externality which is the damage they cause when they crash. By showing kids the true probability of crashing, we increase their consumption of drink driving (assuming that their prior belief was that it was more likely they would crash) to the point where the social cost outweighs the social benefit of their driving activity.

However, there might still be scope for the game and full information. If we can ‘tax’ the negative externality, we can bring the quantity of drink driving down to the socially optimal level. This would require having police fining people when they catch them drink driving. The fine would have to equal [‘cost of outcomes’ x ‘probability of outcomes’]/[probability of being caught and fined]. In this case the driver takes on the full social cost of their drunken activity, and so will only consume the socially optimal amount. The problem with apply this rule come from quantifying the costs. If a drunk driver kills someone, what is the cost of that in monetary terms?

Ultimately, given the difficulty of quantifying outcomes, I think this may be the case where mis-information (at least a focus on the negatives) may be the best way to improve social outcomes. Discuss 🙂

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  • satsumasalad

    I also think that experiencing drunk driving without suffering negative consequences, particularly truly representative negative consequences (eg physical injury or expensive damage to equipment or belongings ) will further encourage the participants to believe there’s nothing wrong when *they* drink and drive.

  • David Baigent

    Agree with satsumasalad,

    The very least consequence of unsuccessfully running a computer game which simulates driving home drunk, should be complete melt down of the computor running the game.

    Make that melt down with real sparks and smoke = totally irreparable.
    Heh, a reality hit.
    The Canadian developers need a brain scan to see if there is anyone home in there.

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  • Matt Nolan

    True, but the police and game developers may have a point if they believe that teenagers currently under-estimate the difficultly and risk associated with driving when drunk. By providing a computer game, they can clearly articulate the difficulty of driving when drunk, and infer some of the risks.

    Now deep down I think its a stupid idea, that is what I said in the blog post. But if we believe that teenagers under-estimate the difficulty of drunk driving (and so under-estimate the probability they could crash), then there could be a case for this form of education.

  • rauparaha

    I think it’s interesting, Matt, that you raise the issue of too little drink driving occurring. You specify an ‘optimal’ tax on the activity which implies that it could be over taxed and thus under consumed. However, the rest of your post suggests that you might be opposed to even some minimal level of drink driving. In that case, why not just impound peoples’ cars on the spot and give them an exorbitantly large fine? Surely if you want underconsumption then over ‘taxation’ is the answer? If you don’t want to over tax it then what is wrong with correctly informing people about the risks? If they erroneously believe the risks to be higher than they actually are then surely we’ll get too few drink drivers on our roads. What you’re saying just doesn’t really seem consistent to me, sorry.

  • Matt Nolan

    I agree that a ‘tax’ (in this case a fine if you are caught by the police) is the appropriate mechanism in the case when you can quantify the costs, that is why I said:

    “In this case the driver takes on the full social cost of their drunken activity, and so will only consume the socially optimal amount.”

    However, the problem I have is trying to quantify these costs, which is why I said:

    The problem with applying this rule comes from quantifying the costs. If a drunk driver kills someone, what is the cost of that in monetary terms?

    As a result, I suggested that it might be easier (or cheaper) from a policy perspective to keep people mis-informed, or exaggerate the risks associated with drunk driving. If that is the case, this game will give the teenagers full information, which, since there is an externality involved is not socially optimal.

    What I’m suggesting is like a third best equilibrium, it might not be as efficient as taxing the buggers, but it might be more practical from a policy perspective.

  • rauparaha

    Ah, I see. So the misinformation is a substitute for penalties? Cos quantifying the cost of a life is not all that hard: people implicitly do it all the time when they take risks that endanger others. Traffic funding authorities must constantly use a cost-of-life figure to decide which road safety improvements to make.

  • Matt Nolan

    Thats a good point, they must implicitly value life.

    However, I wonder whether authorities actually price life correctly when they make fines etc. Authorities always seem to say that they want to stop all people dieing on the road, but if that was their only goal why don’t they stop people driving?

    If we can quantify life, then we should use fines, most definitely. But if authorities are unwilling to directly quantify life and work out the efficient fine, I’m scared that they will set fines too low (as they might find it harder to justify a high fine unless they can directly quantify the cost of life). If this is the case, the equilibrium with full information but a suboptimal fine may be worse than an equilibrium where we pump people full of mis-information and make them scared to drink and drive. Mis-information is a great way of creating appropriate social norms 😉

  • rauparaha

    That’s true, but it’s hard to tell whether fines are too low without the numbers. It wouldn’t be possible for them to make a lot of safety related funding choices without pricing life so they must have some valuation of it. Whether it’s correct and consistent across agencies I have no idea.

    There must also be costs to a campaign of misinformation though. First, it is difficult to misinform people when they have access to both outside information and the means of testing the information you’re giving them (cars and alcohol). Secondly, it has long term consequences for the credibility of the government if it is found to have deliberately misinformed the population.

  • Matt Nolan

    I agree that their is a means of testing the information, however I think a person would have to repeatedly drink drive in order to discern something close to the true probability distribution associated with drink driving. Furthermore, government policy to make individuals scared of drink driving may be sufficient to prevent them using outside means to find information.

    I can see how mis-information would affect government credibility, but if people never discover that it is mis-information, or if they believe that the government was mis-informed, then there is no reason for it to influence the credibility of government safety programs.

    Car safety ads are mis-information, they only show us cases when we crash and die from drink driving, not when we make it home, or stop half way home and roll into a paddock throwing up. By showing the horrors over and over again, they make people relate drink driving to dieing, even if the probability of dieing was very low.

    Ultimately, I would like it if fines were set to account for the true average probability of all the different outcomes, with some quantification of human life (say the average production left of someone in the middle of their lifecycle). I think that fines for drunk driving would probably be higher, but hey who knows they might be lower. However, if this is impractical, I’m happy to scare people with lots of drink driving ads, but a computer game that provides people with a realistic drink driving experience might counter the usefulness of such a campaign.