Thursday, February 23, 2012

Follow on to ticket analysis

There were some things I didn't make explicit, and I wasn't always clear with my terms. Re-posting this here to try to fix some of that.

  1. I was working in demanded units, but I was sloppy and spoke of this demand as if it came from actual people in a 1:1 ratio. This is not what I meant to express. For example, the 91,000 tickets demanded by veterans if we assume scalpers have 5,000 tickets is not saying there is demand from 91,000 burners. It could be 30,000 burners asking for a little more then 3 tickets each. But were this the case, we'd all have more tickets. See point 4.

  2. As far as tickets per bid, and bids per person, this is why I worked in units of tickets demanded: A ticket is directly convertible to one participant. But one potential participant could generate many bids, and each bid can be for one or two tickets. But since we have reasonable ideas about participant numbers and ticket numbers, working in these units removes unnecessary complexity, keeps the problem rooted in available facts, and avoids inserting unnecessary assumption points (how many tickets per bid? how many bids per participant?).

  3. This is also done to shine a light on the demand amplifying impact of the lottery system: The structure of the sale makes participants amplify the demand signal they send to the market ("If I want two tickets and I have a 50% chance of being successful, I should bid for 4, because I'll probably get 2"). So the game, when played out, says everyone should increase their bids to infinity, as long as they believe in no liquidity risk ("But if I bid for 8, my odds of getting two go up, and if I have extras I'll just sell them. Maybe I should bid for 10. No, 12...").

  4. If everyone amplifies their bid by the same factor, and if demand and supply were truly close to equilibrium, then everyone should get the number of tickets they need (50,000 people bidding for 50,000 tickets all bid for 5 tickets, each has a 1 in 5 chance of success, and on average, everyone gets one ticket. If they all bid for 6, they have a 1 in 6 chance of success. No shortage.). As this seems not to be the case, (and far from it), then either demand greatly outstrips supply (oh the places we all want to go!), or some participants scaled up their demand by a factor orders of magnitude in excess of the average participant (scalpers...?), or some combination of both.

  5. My conclusion is that, while stated demand may have been amplified by the structure of the market (game), it doesn't seem to explain all the observable evidence, and so I have to conclude that scalpers were present. I reject my (null hypothesis) "weak" assumption that there was only tiny scalper activity.

  6. One area that would be interesting to explore is assessing the outcome via market simulation. Determine the proportion of [good burners who bid for only what they need; scared burners who bid for more than what they need; virgins; scalpers] that produces an outcome consistent with the results. I'd need some time and help to go down that road. But possibly a good exercise for testing future ticket distribution solutions.

Tuesday, February 21, 2012

Something doesn't add up

I've chosen to revive the blog for this special community service announcement:

The numbers coming out of the Burning Man official channels on the ticket situation seem preposterous.

They may be right, but they're awful hard to believe.

These are the official facts:

  1. 43,000 tickets have been awarded so far via pre-sale and lottery.
  2. 40% of the demand came from virgins.
  3. Among returning burners affiliated with projects ("key people needed to bring projects to the playa"), only 20-25% got tickets (JRS Vol 16 #11).
Let's apply some algebra, and some assumptions.

Let's assume A: 100% of "key people needed to bring projects to the playa" are returning burners.

Let's also assume for the sake of argument, B: there was little to no demand from scalpers. I know, big assumption. More on this later.

So via 2, A, and B, 60% of the total demand was from returning burners.

Let's assume C: the lottery was truly random and fair and all participants had an equal chance of getting tickets.

This means 60% of the tickets went to returning burners. 60% of 43,000 = 25,800.

(3) says the odds of getting a ticket for this group were 20-25%. Let's be optimistic and take 25%.

The odds of getting a ticket (P)= total tickets available (T)/ total tickets demanded(D).

We know this group's odds were 25%, and they got 25,800 tickets.

P = T/D
D= T/P = 25,800/.25 = 103,200.

BRC population cap = ~50,000.

So this implies, if there was no scalper activity, the demand just from returning burners was ~2x the total population of the city.

The same math applied to virgins yields 68,800 tickets demanded by virgins. More than an entire BRC of virgins.

Total demand for tickets = 172,000. About 3x the population of BRC.

Last year sold out, and the population cap was around 50,000. Let's say the total demand last year was 60,000. This is still more than a doubling of demand in a single year. Yes, social media things happened to make it more known. Maybe our growth rate went nuts. But I find this hard to believe. Demand growth has been under 10% per year. To go from that to nearly 200% seems fishy to me.

Maybe I'm just a dismal scientist, but I think scalpers have most of the tickets. Here's the math:

Total demand is really nor just Virgins + Veterans. It's V + V + Scalpers.

While we can't solve for the total number of scalpers directly, we can use the numbers we know to put bounds on what it must be, given the facts.

The probability of getting a ticket remains constant for all parties in the lottery, and that was 25%.

.25 = 43,000 (tickets)/ (Vi + Ve + Sc)

so Vi + Ve + Sc = 172,000

If we assume that virgin demand and veteran demand really exist in a 2:3 ratio (40% vs 60%), then we can see how much demand must come from scalpers as the assumed demand from veterans changes.

For example, if there's no demand from veterans, then there's no demand from virgins, and it's all scalpers. 0 + 0 + 172,000 = 172,000.

If there's demand from 10,000 veterans, then there's demand from 6,667 virgins, and there's demand from 155,333 Scalpers. 10,000 + 6667 + 155333 = 172,000 which is the total demand required for the 43,000 tickets to yield lottery participants a 1 in 4 chance of winning.

So let's look at some more realistic and sad numbers. If there's demand from a full city of veterans (55,000: Plausible) that means there's demand from 36,667 virgins (scary, plausible). And 80,333 Scalpers (scary, sad), who would make up 47% of the total demand. And scalpers would be holding 20,000 tickets. Wow.

Let's try this another way: Let's assume scalpers were really a small part of this. Let's say they only have 5000 tickets. That still seems like a lot of tickets to be won by registering for 2 at a time, with only a 25% success rate. They'd have had to register 10,000 times, collectively. If true, veteran demand is for around 91,000 tickets, and virgin demand just over 60,000. 3 BRC's worth of real demand.

So what do I think is true?
  • Virgin demand is underestimated. These numbers make more sense when virgins and vets are at a 1:1 ratio or better. Maybe virgins feared this would happen, and wanted to be in the lottery as vets, hoping for a special advantage. Maybe scalpers were more likely to claim vet status. Who knows.
  • There is unaccounted for success. I don't think there was demand for 172,000 tickets. That seems insane to me, even if the Russian Mafia decided they were going to corner the BM ticket market. If demand was lower, then odds of success for applicants was much higher. This is a huge point of sensitivity. If odds are not 1 in 4, but 1 in 3 (odds up by 8%), then scalper demand for the same assumptions drops by 37%. I think success has been undercounted.
  • Scalpers have a metric shitload of tickets. There's no way around this. Even with the tiniest impact assumed for scalpers, and the most optimistic assumed success rate, the genuine demand would still be a whole city of veterans and another two thirds a BRC of virgins. And Scalpers still have 10% of the tickets. 4300 Burning Man tickets is a metric shitload in Imperial.

What to do:

Scalpers can scalp a Madonna concert because their activity doesn't impact the delivered experience for attendees. Madonna will go on stage. If she sings to an empty house, because scalpers bought all the tickets and couldn't sell them, then she still makes her money.

For an event like Burning Man, this is not the case. The attendees are the show. So for scalpers, it's a case of resource management. Cut down all the trees in the forest, and there is nothing to log next year. Cut down half the trees, and it's still bad. They have to find the optimal number of tickets to acquire such that there's still a Burning Man.

However, they were greedy. They cut down half the trees in the forest. This is not the long-term sustainable harvest rate.

By directing tickets to the key groups that need them, the BM organization is bailing out the scalpers. They're helicoptering in trees so that there's something to cut down next year. The scalpers can overfish with impunity. BM org will make sure there are fish next year, because they won't let the event fail this year.

This is bad.

We need to let it fail. We need to let all the art be small and feeble. We need a half empty city, half full of virgins who came great distances to be miserable, bored, and disappointed. In a dust storm. We need BM management to see the scale of the scalping, so they recognize it as a real problem, and take steps to defend their event from the forces that will arbitrage away their utopia, which has been left unguarded against the forces of the free market. We need the community to see it coming, and a panicked stampede of people desperately trying to unload tickets they know they're not going to use, because the know this year is going to be awful. We need the scalpers to realize they've just cut down the last Truffala tree, and to lose their shit, and their shirts as they try to minimize their losses and sell into the dieing market for tickets. We need to all suffer so that this never happens again.

My analysis is here.

Thursday, December 03, 2009


Originally uploaded by ken_is_a_verb
Burrito gigante for lunch

Monday, October 12, 2009


Originally uploaded by ken_is_a_verb
The boil of the belgian


Originally uploaded by ken_is_a_verb
Belgian in progress

Monday, October 05, 2009

Celebrating mediocrity

I noted with some interest a few weeks ago that our first regatta of the fall was about to institute a team points trophy. These are usually awarded based on a points system that considers not only where one placed in the event, but the kind of event. They tend to favor teams with breadth, or at least scale. And I freely admit that as a large organization, we do well in these. We have many people who race many events, and we tend to do well. I figured we'd be a lock.

Seems the points system in place for this regatta failed to consider one other important element: How many people were in your event?

Now it may or may not be fair to award more points for winning the 8+ than winning the 1x. One can argue that a club needs just one great rower to win the 1x, but needs 8 to win the 8+, and the award is for overall excellence.

But I think it stands to reason that one also ought to consider how many other boats were in the event. Winning the 1x is impressive: You're often racing 20 other people, sometimes more. In the 8+, sometimes there are 12 crews, but for some of these smaller races it's only 7 or 8. Granted, it takes 8 folks to field a boat, so there are naturally fewer entries. But I think some kind of relative hierarchy where

8> (4+ = 4- = 4x)> (2x = 2-)> 1x (if number of entries are equal)
Winning over more entries > winning over fewer (if same event class)
Winning > placing

Seems one of the local high school programs showed up. And they were the only high school that showed up. So for about 4-5 events, they were the only competitor. They won by default. And when you take first and second out of 2 in all the high school 8+ events, you get a lot of points, because there's no discount for racing no one.

Meanwhile, my club won and often took many of the other top spots in almost all the other events. Where we actually raced other clubs and crews. i.e. there was a non-zero probability of not getting first place.

Yet we didn't get the points trophy. Wow.

Petty of me, but I like putting more hardware in the trophy case. And it's nice to give the other clubs a chance to go home with one, I suppose, as we're pretty dominant.

But I thought we were out to celebrate excellence, not entering the under-subscribed events. And when you create a perpetual trophy, you want it to be more than just a self esteem award. Oh well, rant over.

Thursday, August 27, 2009

Real estate deals with talking fire trees

Continue to cause trouble.

"Imaginary sky daddy said all your stuff belongs to us".


Monday, August 10, 2009

How to shower behind a water truck at Burning Man

Getting clean on the playa is very difficult if you don't have access to a lot of water and a lot of infrastructure.

I've done the squirt bottle shower (always easiest if you have a friend to help you), the human carcass wash (if you don't mind a non-zero probability of being fondled by a stranger) and the wet-wipes (playa dust + near negative humidity renders these "dry-wipes" within seconds of their leaving their container. Also, they become MOOP).

The best free and easy way to get clean, in my opinion, is to get behind a water truck.

The water trucks travel the streets at irregular intervals spraying water in their wake to keep the road dust down. They move at a brisk walking pace. So one would think that all one has to do to get doused is to run up behind the truck, and stay in the stream. And while that's part of the solution, if one doesn't take care in how one does those things, one can get seriously maimed, or seriously messy. Why is it dangerous?

Because that water is turning the playa dust into a fine layer of playa mud which is atop a layer of playa dust which is atop a layer of hard as cement playa. It's making the functional equivalent of a vaseline-coated basketball court. And you think you can run on it. And you are wrong.

How to do it:

  1. Listen for the trucks. They give a little warning "toot toot" of their truck horns to warn those in front of them that they're coming.
  2. Get ready to get wet. You can be naked, or semi-clothed. Strip to what you intend to have on under the water. It's hard to run and strip at the same time, and if you do, you're likely tossing your clothes into fresh playa mud. This makes the net cleanliness gain negative. Strip first.
  3. Shoes off. Despite what you're going to hear about not running on the mud, once under the water, you are on the mud. And it will clog your footwear into an unholy mess of recently rehydrated clay-like mud. Again, net clean of your person doesn't increase. Muddy bare feet are much easier to clean back at camp than muddy playa footware. Go barefoot. And don't try to run in flip flops. Seriously, what do they do for you? Barefoot.
  4. Run for the truck, but not in the street. The very edge of the street, at the limit of the truck's spray radius will be very to semi-dry. It will therfore not be "as slippery as greased pig shit" (as my grandma says). So you can run on it. RUn for the truck on the dry part. Also, stop running on the dry part: many people slip and fall when they try to decelerate from a full sprint while cutting in behind the truck. They try to change speed rapidly on playa mud. They fall on the mud, hurt themselves, get filthy and fail to recover in time to get clean. Bad move. Instead, run a little past the truck, decelerate, then step behind it.
  5. Don't bring soap. You're about to get doused in gallons of luxuirous water. Your soap, no matter how biodegradable, is not a natural part of the fragile playa habitat. Your need to increase your experience of clean by the infinitesimal amount that water truck + soap yields over water truck alone does not outweight the playa's need not to have soap dumped on it.
  6. Be quick. There will be others wanting in. Share. Get your head while directly under the spray, then step aside to work the rest of yourself.
  7. Walk home. Running is bad. Also, you can greet your fans who were cheering for you as you ran naked down the street for a shower.

Tuesday, August 04, 2009

More on the organic food revelations

I'm happy to take environmentally friendly actions. As this author does, I often find the case for why something is good for the planet to be woefully lacking in fact-based argumentation.

Lagunitas Imperial Stout

Is perfect. It's very much what I want my stout (that I make) to be: Toasty and dark, but balanced by chewy malty sweetness. Some sugar in your coffee. And like most good beers it unfolded as it warmed up. Much more malty sweet.

What would make it more awesome? Maybe cranking up the body a bit more, thinking lactose sugars here. Go cream stout. But that's just my personal preference. It's a very well put together beer. I endorse it.

Wednesday, July 29, 2009

But my carrots had high self esteem!

Seems "organic" food has no significant nutritional benefit over conventionally farmed food.

DDT is an organic compund.

Of course, hippies mean "organic" not in the sense that chemists do, but then I struggle to know what is and is not "organic".

I think DDT is pretty

I fairness, this doesn't argue that keeping modern chemistry out of the food creation process isn't better for the environment. It just shows that buying your kids organic cheerios won't make them smarter from all the extra "nutrients" in the "organic" food. It also doesn't weigh in on the potential consequences of trace exposure to synthetic compounds used in conventional farming. Whatever they may be, I'm not worried. And it also doesn't weigh in on whether the organic food tastes any better. I do find that often it does.

Yay for science weighing in.

Friday, July 10, 2009

Well said, dude with sharpie

Not saying I'll never buy jewelry for a woman ever again, but how many times have I seen women comparing/ showing off rings as proxy for showing off the earning power of their husbands? How often have I seen women more obsessed with the ring than the life commitment? Modern weddings seem a ritualized homage to female power. Handing over two months' earnings in the form of a shiny rock is a form of surrender.

It's the symbolic beginning of the time and asset transfer the man makes in marriage. And in return she grants him exclusive access to her coochie.

The ad itself shamelessly equates love with materialism. Small ring? Maybe he doesn't really love you.

For shallow whores everywhere, indeed.

Wednesday, July 08, 2009

My new nephew

Wednesday, July 01, 2009

Rosa Parks of 2009

Dan Choi:

Seems the military is now "just following orders" drumming you out, given the laws. Seems no one in the chain of command has the guts to declare the policy unjust, wrong, and stupid in a time when we need folks with your qualifications and willingness to serve. Shameful day, but you've done the right thing.

Once the law is reversed, we'll work to see these kinds of discharges reversed. Good for you for setting yourself up as an example of how wrong the policy is. Sorry you couldn't get a better result.

Tuesday, June 30, 2009

Skype: The final frontier

My dad, on nearly the other side of the planet (10 hrs difference) has discovered Skype, and found me today.

He had it half working. I could see him, and he me; he could hear me, but I couldn't hear him. But wild gesticulation and a broken IM conversation let me know my info was getting through.

I'm impressed. As I've gotten older, come to know myself a bit better and found myself in a position to observe my dad with new eyes, I've recognized that I got some of the things I like best about myself from my dad. And I'm realizing my dad's got some things I'd still like to emulate.

Dad's not afraid of the new and different. He's genuinely curious. And he may not be the first kid on the block to try or do a new thing, but his trying it has nothing to do with how many have or have not come before. Dad's curious, excited, and willing to jump in with both feet, in earnest. He'd rather try and fail than not try. He's better at that than I am. I like to know my odds of success are higher than my odds of making a fool of myself. But we're both curious, and both not afraid to figure something out on our own. I think I get my scientist's curiosity and fair mindedness from him.

So there's dad, doing his first web video chat in the year 2009, and the sound's not working, but he's happy that it's 75% working, and thrilled to see me. I'm sure he'll sort it out. I'd have been frustrated it didn't work perfectly. He seemed happy it worked at all, which is a much better perspective.

The world gets even smaller. Fine with me.

Monday, June 29, 2009

Trying to have an opinion

Seems we're going to solve health care in the US, now. Or at least the federal government is about to pass a whole bunch of laws (or at least wants to) that will impact how we collectively experience health care in this country.

And as a citizen, I'm trying to form an opinion on what, if anything, should be done.

Not easy.

The issue isn't simple. There's the market forces vs. public subsidy debate, which Nobel winning economists are fighting about. I'm normally on the side of market forces to sort things out, but recognize Krugman's point: If you leave market forces to sort this out, some people go uninsured.

In case the reasons for this aren't transparent, think of it from the insurer's point of view: Whom would you select for customers? Put another way, for whom would you volunteer to pick up the health care tab for the next year, assuming you like holding on to your money: 25 year old male triathletes, or 67 year old obese lifelong smoking women? Under what circumstances would you agree to cover the expenses of the fat smokers? If they have a 10% chance of needing $500,000 in lung cancer care, and you charge them enough to cover their expected costs, few will be able to afford $50,000 per year. And so they remain uninsured. You're not being a dick, you're just not being a chump.

So the insurance market, when left alone, is like the credit market: some people don't get any.

I'm not bothered by this in the credit market. I'm really not sure how I feel about it in the health insurance market.

Part of the current problem is the government picks up some of the worst segments of the market, the poor and the old, through Medicare and Medicaid. So if you're not poor, but you're not rich, and you're not well, you're screwed. Private firms, rightfully, do not want you as a customer at prices you can afford.

I suppose that, if we as a society decide everyone gets health care, then we all end up paying for it one way or another, either through public funding and higher taxes, or higher premiums on private insurance once government mandates all must be accepted and rates must be capped. If you can't charge Fatty McSmokerpants what she really costs, you charge Bobby O'Triathalon the difference.

Which doesn't seem to provide any market based financial incentive not to be a burden on the system. Yeah, jack the tobacco tax through the roof, and that'll start. But hard to tax couch sitting and TV watching and half-gallon-of-double-fudge-brownie-in-one-sitting eating. Hard to subsidize interval training. So I'm troubled by the lack of market-created incentives that seem to materialize once those truly burdensome to insure no longer feel the pain they create for everyone else. If you have all you can eat health care for "free" (you don't directly detect the incremental cost of your incremental consumption), why wouldn't you see the doctor every time you had a sniffle, unless you had to wait 8 weeks for an appointment?

If I think about it another way, there will always be a private option. Those with means will always have access to a higher level of service. If I have a bajillion dollars and I want to hire an endocrinologist to adjust the iodine in my table salt every morning, after giving me a full body MRI, I can do that, if I'm willing to pay for it. The question becomes, what is the public option, how is it paid for, and who is likely to have that be their only option? And there are legit concerns that a subsidized public option will cause Bobby O'Triathalon to pull out of the private pool, into the lower cost public pool (tax payer wins, private firm loses) causing private firm to have to raise rates to cover the remaining folks, forcing more into the public system, etc.

And maybe that's not bad. Or maybe it is. I don't know.

Not simple.