Comments on: Psychology, economics, and the taxi http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/ Research, international development, foreign policy, and violent conflict Thu, 09 Sep 2010 04:27:36 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: friendyojmi http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-15348 friendyojmi Mon, 07 Jun 2010 16:37:43 +0000 http://chrisblattman.com/?p=3880#comment-15348 very informative blog.<a href="http://smiletravelinsurance.com" rel="nofollow">Smile Travel Insurance</a> very informative blog.Smile Travel Insurance

]]> By: Michael Keizer http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10881 Michael Keizer Thu, 31 Dec 2009 06:58:56 +0000 http://chrisblattman.com/?p=3880#comment-10881 After I had lived for a couple of months in Addis, I knew about ten drivers and where they would usually be waiting for customers -- and they knew me, and knew that I knew the regular price from my Ethiopian colleagues. This meant a minimum of haggling (usually less than a minute), a minimum of Ferengi premium, a maximum of enjoyment chatting with the drivers about what happened in their lives and with their families, and happy drivers who knew that they were assured that I would come to them first before approaching their colleaugues. It also netted me an occasional invitation for coffee at their houses, which was actually the best part of it all. After I had lived for a couple of months in Addis, I knew about ten drivers and where they would usually be waiting for customers — and they knew me, and knew that I knew the regular price from my Ethiopian colleagues. This meant a minimum of haggling (usually less than a minute), a minimum of Ferengi premium, a maximum of enjoyment chatting with the drivers about what happened in their lives and with their families, and happy drivers who knew that they were assured that I would come to them first before approaching their colleaugues. It also netted me an occasional invitation for coffee at their houses, which was actually the best part of it all.

]]> By: Anon. http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10785 Anon. Tue, 15 Dec 2009 00:30:03 +0000 http://chrisblattman.com/?p=3880#comment-10785 Depends how many taxis you're taking, doesn't it? If you're taking, say, 5-10 taxis a day for months, those 30 cents begin to add up, and frankly by using so many taxis instead of walking, you're already being pretty helpful to the local taxi driving industry. Depends how many taxis you’re taking, doesn’t it?

If you’re taking, say, 5-10 taxis a day for months, those 30 cents begin to add up, and frankly by using so many taxis instead of walking, you’re already being pretty helpful to the local taxi driving industry.

]]> By: Chris Blattman http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10743 Chris Blattman Fri, 11 Dec 2009 14:51:24 +0000 http://chrisblattman.com/?p=3880#comment-10743 Yikes. Did someone just call me 'shameless' and an Ethiopian 'famined' in the same sentence? Ah, the irony. I don't see any philosophical trouble with bargaining, and neither do the people on the other side. Paying a fair price for a service is a perfectly reasonable objective, especially when dealing with middle class merchants in a prosperous and temperate green city (e.g. Ethiopian cab drivers). Besides, I'm not try to eliminate the 'rich person premium' but the 'naive newcomer' one. I usually have a friendly chat and repeat business with the cabbies afterwards. After a week, I chat with them on the corner in a friendly way. That is my travel philosophy. Yikes. Did someone just call me ‘shameless’ and an Ethiopian ‘famined’ in the same sentence? Ah, the irony.

I don’t see any philosophical trouble with bargaining, and neither do the people on the other side. Paying a fair price for a service is a perfectly reasonable objective, especially when dealing with middle class merchants in a prosperous and temperate green city (e.g. Ethiopian cab drivers).

Besides, I’m not try to eliminate the ‘rich person premium’ but the ‘naive newcomer’ one. I usually have a friendly chat and repeat business with the cabbies afterwards. After a week, I chat with them on the corner in a friendly way. That is my travel philosophy.

]]> By: j http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10742 j Fri, 11 Dec 2009 14:42:59 +0000 http://chrisblattman.com/?p=3880#comment-10742 You are shameless. You get paid about 1,000 dollars a day and you bargain off half a dollar from a famined Ethiopian who wants to bring some food to his family. You are shameless. You get paid about 1,000 dollars a day and you bargain off half a dollar from a famined Ethiopian who wants to bring some food to his family.

]]> By: Sho http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10727 Sho Thu, 10 Dec 2009 02:50:42 +0000 http://chrisblattman.com/?p=3880#comment-10727 <blockquote>no-one likes a rich person who is stingy</blockquote> Amen to that. I can understand why people don't like to feel "ripped off" but jesus, come on people. Let the poor taxi driver get lucky once in a while. The comment above, where someone is talking about how they bargain some Nigerian taxi driver down from 90 to 50 naira, is particularly galling. 90 naira is AUD0.66, 50 is AUD0.35. I can't believe any westerner would actually put in deliberate effort to stiff some taxi driver 30 cents. Who do you think that 30 cents means more to, you or him? Obviously you can't just act like a total naive fool in a developing country but let's remember these guys are just trying to feed their families. Anyone reading this site is unimaginably wealthy compared to a taxi driver in Africa and it's all just down to the cosmic toss of the dice. So spread it around a little - the drivers, and your karma, will thank you for it.

no-one likes a rich person who is stingy

Amen to that. I can understand why people don’t like to feel “ripped off” but jesus, come on people. Let the poor taxi driver get lucky once in a while.

The comment above, where someone is talking about how they bargain some Nigerian taxi driver down from 90 to 50 naira, is particularly galling. 90 naira is AUD0.66, 50 is AUD0.35. I can’t believe any westerner would actually put in deliberate effort to stiff some taxi driver 30 cents. Who do you think that 30 cents means more to, you or him?

Obviously you can’t just act like a total naive fool in a developing country but let’s remember these guys are just trying to feed their families. Anyone reading this site is unimaginably wealthy compared to a taxi driver in Africa and it’s all just down to the cosmic toss of the dice. So spread it around a little – the drivers, and your karma, will thank you for it.

]]> By: josh http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10724 josh Wed, 09 Dec 2009 22:31:46 +0000 http://chrisblattman.com/?p=3880#comment-10724 Senegalese have got to be the world's most talented hagglers. In Dakar I felt like I was swordfighting without a sword. Senegalese have got to be the world’s most talented hagglers. In Dakar I felt like I was swordfighting without a sword.

]]> By: Nelson http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10718 Nelson Wed, 09 Dec 2009 15:02:17 +0000 http://chrisblattman.com/?p=3880#comment-10718 In Beijing, cabbies would try to negotiate fares with foreigners, even though all of the cars had meters. No matter how much a driver would protest the final negotiated price, I quickly discovered that a negotiated price was always higher than the meter price by a factor of several hundred percent (of course). The way to beat this was simply to insist on the meter. If a cabbie refused, walking away would normally induce him to change his mind. In Beijing, cabbies would try to negotiate fares with foreigners, even though all of the cars had meters. No matter how much a driver would protest the final negotiated price, I quickly discovered that a negotiated price was always higher than the meter price by a factor of several hundred percent (of course).

The way to beat this was simply to insist on the meter. If a cabbie refused, walking away would normally induce him to change his mind.

]]> By: Paul http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10709 Paul Tue, 08 Dec 2009 15:52:22 +0000 http://chrisblattman.com/?p=3880#comment-10709 Totally agree with the above comment. Works beautifully in Beirut. Totally agree with the above comment. Works beautifully in Beirut.

]]> By: scott http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10685 scott Mon, 07 Dec 2009 17:13:06 +0000 http://chrisblattman.com/?p=3880#comment-10685 In Canada, you *can* bargain, but you have to ask for the manager first ;-) The current level of inflation in a country must surely be taken into account. As globtrotteress indicates, round figures are important. Is it advisable to attempt to dodge the foreigner premium entirely? An African taxi ride remains more of a relational transaction than a Western equivalent (hence the need to smile) and no-one likes a rich person who is stingy. In Canada, you *can* bargain, but you have to ask for the manager first ;-)

The current level of inflation in a country must surely be taken into account. As globtrotteress indicates, round figures are important.

Is it advisable to attempt to dodge the foreigner premium entirely? An African taxi ride remains more of a relational transaction than a Western equivalent (hence the need to smile) and no-one likes a rich person who is stingy.

]]> By: Amelia Kendall http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10683 Amelia Kendall Mon, 07 Dec 2009 16:40:48 +0000 http://chrisblattman.com/?p=3880#comment-10683 The Morocco taxi bargaining fraction and rounds estimate made me laugh - I lived there for two years and took taxis quite often. It's so true; the infinite rounds of bargaining - I found that we would often continue to haggle about the end price as we were rocketing down the road. A sense of humor is key - as is a good understanding of the context - I think you can often decrease the rounds and even the starting price by speaking in the local language and using as many colloquialisms as possible. Sharing a cab with a local is always a good idea as they cannot overcharge the local - or up your half or whatever. It's been a long time - thanks for making me think of those memories. The Morocco taxi bargaining fraction and rounds estimate made me laugh – I lived there for two years and took taxis quite often. It’s so true; the infinite rounds of bargaining – I found that we would often continue to haggle about the end price as we were rocketing down the road. A sense of humor is key – as is a good understanding of the context – I think you can often decrease the rounds and even the starting price by speaking in the local language and using as many colloquialisms as possible. Sharing a cab with a local is always a good idea as they cannot overcharge the local – or up your half or whatever. It’s been a long time – thanks for making me think of those memories.

]]> By: Matt http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10682 Matt Mon, 07 Dec 2009 16:39:27 +0000 http://chrisblattman.com/?p=3880#comment-10682 Justin - I think what bothers Westerners more about the non-institutionalised "corruption" is the DWL from time spent bargaining. I think many of us would gladly pay a premium for the sake of just not having to argue. Case in point: http://www.youtube.com/watch?v=w9SFTWme6Z0 Justin – I think what bothers Westerners more about the non-institutionalised “corruption” is the DWL from time spent bargaining. I think many of us would gladly pay a premium for the sake of just not having to argue.

Case in point:
http://www.youtube.com/watch?v=w9SFTWme6Z0

]]> By: Justin Kraus http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10681 Justin Kraus Mon, 07 Dec 2009 14:53:47 +0000 http://chrisblattman.com/?p=3880#comment-10681 Actually I was referring to "J"'s comment about how it would be interesting to try and relate taxi bargaining practices to corruption or government efficiency across countries. I hope my comment didn't come across as some sort of attack. My point was just that Westerners tend to ignore institutional corruption (metered taxis that purposefully take longer routes) while making a big deal of, or at least being neurotically fascinated by, non-institutionalized bargaining practices (non-metered taxis) that feel, or seem (to us at least) to indicate some sort of corruption. Actually I was referring to “J”‘s comment about how it would be interesting to try and relate taxi bargaining practices to corruption or government efficiency across countries. I hope my comment didn’t come across as some sort of attack.
My point was just that Westerners tend to ignore institutional corruption (metered taxis that purposefully take longer routes) while making a big deal of, or at least being neurotically fascinated by, non-institutionalized bargaining practices (non-metered taxis) that feel, or seem (to us at least) to indicate some sort of corruption.

]]> By: D. Watson http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10680 D. Watson Mon, 07 Dec 2009 14:26:26 +0000 http://chrisblattman.com/?p=3880#comment-10680 We need to combine Blaise's and Justin's observations. If drivers have a pre-arranged amount, they have an incentive to get you there as fast as possible. If you're going by meter, there are incentives to take a longer route and yet not too long (for fear of losing business). There have been a few taxis where I tried to convince the guy to let me out early because even _I_ realized he had gone the wrong way to pick up a one-way street and would have to go around a few more blocks to approach the hotel from the right direction... in DC. We need to combine Blaise’s and Justin’s observations. If drivers have a pre-arranged amount, they have an incentive to get you there as fast as possible. If you’re going by meter, there are incentives to take a longer route and yet not too long (for fear of losing business). There have been a few taxis where I tried to convince the guy to let me out early because even _I_ realized he had gone the wrong way to pick up a one-way street and would have to go around a few more blocks to approach the hotel from the right direction… in DC.

]]> By: Mathias S Kirkegaard http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10679 Mathias S Kirkegaard Mon, 07 Dec 2009 13:38:05 +0000 http://chrisblattman.com/?p=3880#comment-10679 Justin Kraus wrote: "As one of the comments shows, there is often a tendency to see the existence of bargaining as a form of corruption or at least as an indicator of something untoward in a developing country especially because as Westerners our bargaining positions tend to be shit in such circumstances. Our reactions are usually first to get pissed off and then, if we are smart or simply have to deal with it for extended periods of time (like Mr. Blattman), to (neurotically) analyse, smile, and accept." I think he was referring to my comment, so I thought I should comment. First of all: I was smart. I found the fast and cheap way to get around it, and the smart way was not to follow the local customs. And then it somehow was. In the Hausa community it is somehow the norm to seem annoyed about bargaining. My Nigerian friends were very impressed with my way of dealing with the questions. I even got lower prices than them, and much faster! It was 3 months of experience at work. I was taking the motorbike-taxis, and they are known to be a little dangerous. At the end of the trip, I gave a small bonus If the driver was driving safe (or at least less crazy than the rest). They seemed happy about that. There are no white tourists in the Jos-area in Nigeria, and white people are in general treated like rock-stars. At the roadblocks where the police charge a fee (corruption), they are just waving you through if they see a white man in the car. My minibus (8-seater with 15 persons) was once stopped by an angry-sounding policeman waving his AK47 and demanding money. After maybe a minute discussing with our chauffeur, the policeman suddenly saw my white face among the passengers. He started behaving like a little teenagegirl that have just met Justin Timberlake. Kind of funny. Being a white guy, it was apparently possible to cut corners in the bargaining proces, just by saying: "This is not a bargaining - I know what I want to pay, and I know it's enough for you to take me there." Justin Kraus wrote: “As one of the comments shows, there is often a tendency to see the existence of bargaining as a form of corruption or at least as an indicator of something untoward in a developing country especially because as Westerners our bargaining positions tend to be shit in such circumstances. Our reactions are usually first to get pissed off and then, if we are smart or simply have to deal with it for extended periods of time (like Mr. Blattman), to (neurotically) analyse, smile, and accept.”

I think he was referring to my comment, so I thought I should comment.

First of all: I was smart. I found the fast and cheap way to get around it, and the smart way was not to follow the local customs. And then it somehow was. In the Hausa community it is somehow the norm to seem annoyed about bargaining. My Nigerian friends were very impressed with my way of dealing with the questions. I even got lower prices than them, and much faster! It was 3 months of experience at work.

I was taking the motorbike-taxis, and they are known to be a little dangerous. At the end of the trip, I gave a small bonus If the driver was driving safe (or at least less crazy than the rest). They seemed happy about that.

There are no white tourists in the Jos-area in Nigeria, and white people are in general treated like rock-stars. At the roadblocks where the police charge a fee (corruption), they are just waving you through if they see a white man in the car. My minibus (8-seater with 15 persons) was once stopped by an angry-sounding policeman waving his AK47 and demanding money. After maybe a minute discussing with our chauffeur, the policeman suddenly saw my white face among the passengers. He started behaving like a little teenagegirl that have just met Justin Timberlake. Kind of funny.

Being a white guy, it was apparently possible to cut corners in the bargaining proces, just by saying: “This is not a bargaining – I know what I want to pay, and I know it’s enough for you to take me there.”

]]> By: jmdesp http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10677 jmdesp Mon, 07 Dec 2009 11:31:43 +0000 http://chrisblattman.com/?p=3880#comment-10677 I notice Ross advice here. In Egypt, the taxi price of waiting taxis at the airport was more extortion than just a normal rip-off, and even trying to bargain as much as I could, I could only lower by 10% the price that was twice the normal ferengi premium price I had been told before. After a while I understood the rules : - coming from the airport. You have to take a taxi, there's not a lot of them, and you won't spend hours negotiating. Extortion level price. - going to the airport. They are many, many taxis, but they know at the end you have no choice and won't pass taking a taxi to go take your plane. Rip-off level price. - strolling the town : Here at least you have the power. Many, many taxis, and they know it's quite optional for you to take them. Dirt cheap level price *if* you bargain properly. I notice Ross advice here. In Egypt, the taxi price of waiting taxis at the airport was more extortion than just a normal rip-off, and even trying to bargain as much as I could, I could only lower by 10% the price that was twice the normal ferengi premium price I had been told before.

After a while I understood the rules :
- coming from the airport. You have to take a taxi, there’s not a lot of them, and you won’t spend hours negotiating. Extortion level price.
- going to the airport. They are many, many taxis, but they know at the end you have no choice and won’t pass taking a taxi to go take your plane. Rip-off level price.
- strolling the town : Here at least you have the power. Many, many taxis, and they know it’s quite optional for you to take them. Dirt cheap level price *if* you bargain properly.

]]> By: Ross http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10676 Ross Mon, 07 Dec 2009 09:31:48 +0000 http://chrisblattman.com/?p=3880#comment-10676 Blaise: "A taxi which is stopped is more expensive than one you stop (no explanation)" I would imagine that the drivers of stopped taxis are trapped in a sunk cost fallacy. My top taxi tip: When you arrive at an airport, go by foot from the Arrivals concourse to the Departures concourse. Collect a (very happy) taxi there, save yourself roughly 50% of the price of a waiting taxi. (Plus you know they are a real taxi, you just saw their last Westerner fare arrive unmolested) Blaise:

“A taxi which is stopped is more expensive than one you stop (no explanation)”

I would imagine that the drivers of stopped taxis are trapped in a sunk cost fallacy.

My top taxi tip: When you arrive at an airport, go by foot from the Arrivals concourse to the Departures concourse. Collect a (very happy) taxi there, save yourself roughly 50% of the price of a waiting taxi. (Plus you know they are a real taxi, you just saw their last Westerner fare arrive unmolested)

]]> By: Andrew Farrand http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10675 Andrew Farrand Mon, 07 Dec 2009 09:25:38 +0000 http://chrisblattman.com/?p=3880#comment-10675 Yes, right on about Morocco. Bought some carpets a few weeks ago in Essaouira and the bargaining took an hour! In my experience here, knowing Moroccan Arabic can sometimes help, but it can sometimes raise the seller's expectations of your skills - in some ways it can put him on his guard. I usually go with Arabic, but occasionally try English just to see what will happen, and have managed to get lower prices before by doing so. Yes, right on about Morocco. Bought some carpets a few weeks ago in Essaouira and the bargaining took an hour!

In my experience here, knowing Moroccan Arabic can sometimes help, but it can sometimes raise the seller’s expectations of your skills – in some ways it can put him on his guard. I usually go with Arabic, but occasionally try English just to see what will happen, and have managed to get lower prices before by doing so.

]]> By: Ranil Dissanayake http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10674 Ranil Dissanayake Mon, 07 Dec 2009 06:26:41 +0000 http://chrisblattman.com/?p=3880#comment-10674 Glad to see you had the same experience of Morocco as me. While generally one of my favourite places in the world, my pathological hatred of being hassled brought me to the brink of nervous breakdown in Marrakesh, when someone combined it with my morbid phobia of snakes by throwing a viper around my neck and asking for money. Fes is still in my top five places in the world though. Glad to see you had the same experience of Morocco as me. While generally one of my favourite places in the world, my pathological hatred of being hassled brought me to the brink of nervous breakdown in Marrakesh, when someone combined it with my morbid phobia of snakes by throwing a viper around my neck and asking for money.

Fes is still in my top five places in the world though.

]]> By: Globetrotteress http://chrisblattman.com/2009/12/06/psychology-economics-and-the-taxi/comment-page-1/#comment-10673 Globetrotteress Mon, 07 Dec 2009 05:55:05 +0000 http://chrisblattman.com/?p=3880#comment-10673 In Abidjan, I used to take the meter but I discovered: 1) meters often are biased - usually they run 15-20% faster than normal, 2) locals bargain, and the bargained price is lower than the one with the meter. So now I bargain for known rides, and bargain or take the meter for unknown ones, depending on my bargaining mood. Another interesting issue, maybe peculiar of this country, is that the meter goes up by 30 F CFA, starting from 100 F CFA (i.e. it runs 130, 160, 190 etc), so you end up with having to pay 630 or 1320 and they never have the change (of course) and usually charge you to the higher 50 or 100. My policy now is that if it's over 25 I'll pay to the higher 50, if it's lower than 25 I'll pay to the lower 100. Sometimes taxi drivers are not so happy but it's usually considered fair enough. And smiling will always make things easier. In Abidjan, I used to take the meter but I discovered: 1) meters often are biased – usually they run 15-20% faster than normal, 2) locals bargain, and the bargained price is lower than the one with the meter. So now I bargain for known rides, and bargain or take the meter for unknown ones, depending on my bargaining mood.
Another interesting issue, maybe peculiar of this country, is that the meter goes up by 30 F CFA, starting from 100 F CFA (i.e. it runs 130, 160, 190 etc), so you end up with having to pay 630 or 1320 and they never have the change (of course) and usually charge you to the higher 50 or 100. My policy now is that if it’s over 25 I’ll pay to the higher 50, if it’s lower than 25 I’ll pay to the lower 100. Sometimes taxi drivers are not so happy but it’s usually considered fair enough. And smiling will always make things easier.

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