Decision Auctions aka “How to fairly assign chores, or decide who gets the last cookie”

After mov­ing in with my new roomies (Danny and Bethany of Bee­minder), I dis­cov­ered they have a fair and use­ful way of auc­tion­ing off joint de­ci­sions. It helps you figure out how much you value cer­tain chores or ac­tivi­ties, and it guaran­tees that these de­ci­sions are worked out in a fair way. They call it “yootling”, and wrote more about it here.

A quick ex­am­ple (Note: this only works if all par­ti­ci­pants are of the types of peo­ple who con­sider this sort of thing a Good Idea, and not A Grotesque Par­ody of Car­ing or what­not):

Use Case: Who Picks up the Kids from Grandma’s?

D and B are both busy work­ing, but it’s time to pick up the kids from their grand­par­ents house. They de­cide to yoo­tle for it.

B bids $100 (In a reg­u­lar Nor­mal Per­son ex­change, this would be like say­ing “I’m elbows deep in code right now, and don’t want to break flow. I’d re­ally rather con­tinue work­ing right now, but of course I’ll go if it’s needed.”)

D bids $15 (In a reg­u­lar Nor­mal Per­son ex­change this would be like say­ing “I don’t mind too much, though I do have other things to do now...”)

So D “wins” the bid, and B pays him $15 to go get the kids from their grandma’s.

Of course.… it would be a pain in the butt to con­stantly be pay­ing each other, so in­stead they have a 10% chance of pay­ing 10x the amount, and a 90% chance to pay noth­ing, us­ing a ran­dom num­ber gen­er­a­tor.

This is made eas­ier by the fact that we have a bot to run this, but be­fore that they would use the high-tech solu­tion of Hold­ing Up Fingers.

We may do this mul­ti­ple times per day, when­ever there’s a good that we have shared own­er­ship of and one of us wants to offload their shares onto the other per­son. The goods can be any­thing, e.g. the last brownie, but they’re more of­ten “bads” like who will get up in the mid­dle of the night with a vom­it­ing child, or who will book plane tick­ets for a trip.
We find this an el­e­gant means of as­sign­ing loathed tasks. The per­son who minded least winds up do­ing the chore, but gets com­pen­sated for it at a price that by their own es­ti­ma­tion was fair.
Some other ways it can be im­ple­mented:
Joint pur­chase auction
The de­ci­sion auc­tion and var­i­ants are about al­lo­cat­ing shared or par­tially shared re­sources to one per­son or the other, or pick­ing one per­son to do some­thing. Once in a while you have the op­po­site prob­lem: de­cid­ing on a joint pur­chase.
Sup­pose Danny thinks we need a new sofa (this is very hy­po­thet­i­cal). I think the one we have is just fine thank you. After some dis­cus­sion I con­cede that it would be nice to have a sofa that was less doggy. Danny, be­ing ter­ribly ex­cited about get­ting a new sofa does a bunch of re­search and finds his ideal sofa. I think it is a bit over­priced con­sid­er­ing it is go­ing to be a piece of gym­nas­tics equip­ment for the kids for the next 6 years. Con­flict en­sues! I could bluff that I’m not in­ter­ested in a new sofa at all and that he can buy it him­self if he wants it that badly. But he prob­a­bly doesn’t want it that bad, and I do want it a lit­tle. If only we could buy the sofa con­di­tional on our com­bined util­ity for it ex­ceed­ing the cost, and pay in pro­por­tion to our util­ities to boot. Well, thanks to sep­a­rate fi­nances and the magic of mechanism de­sign, we can! We sub­mit sealed bids for the sofa and buy it if the sum of our bids is enough. (And, im­por­tantly, com­mit to not buy­ing it for at least a year oth­er­wise.) Any sur­plus is re­dis­tributed in pro­por­tion to our bids. For ex­am­ple, if Danny bid $80 and I bid $40 to buy a hun­dred dol­lar sofa, then we’d buy it, with Danny chip­ping in twice as much as me, namely $67 to my $33.
Gen­eros­ity with­out sac­ri­fic­ing so­cial efficiency
“The pay­ments are sim­ply what keep us hon­est in as­sess­ing that.”
If you’re think­ing “how mer­ce­nary all this is!” then, well, I’m un­clear how you made it this far into this post. But it’s not nearly as cold as it may sound. We do nice things for each other all the time, and fre­quently use yootling to make sure it’s so­cially effi­cient to do so. Sup­pose I in­vite Danny to a sing-along show­ing of Once More With Feel­ing (this may or may not be hy­po­thet­i­cal) and Danny doesn’t ex­actly want to go but can see that I have value for his com­pany. He might (quite non-hy­po­thet­i­cally) say “I’ll half-ac­com­pany you!” by which he means that he’ll yoo­tle me for whether he goes or not. In other words, he mag­nan­i­mously de­cides to treat his join­ing me as a 5050 joint de­ci­sion. If I have greater value for him com­ing than he has for not com­ing, then I’ll pay him to come. But if it’s the other way around, he will pay me to let him off the hook. We don’t ac­tu­ally care much about the pay­ments, though those are nec­es­sary for the auc­tion to work. We care about mak­ing sure that he comes to the Buffy sing-along if and only if my value for his com­pany ex­ceeds his value for stay­ing home. The pay­ments are sim­ply what keep us hon­est in as­sess­ing that. The in­creased fair­ness — the win­ner shar­ing their util­ity with the loser — is ic­ing.