Wednesday, April 24, 2013

People Respond to Incentives

My family frequently blows through the limit our internet provider places on the number of gigabytes (GB) per month we get without extra fees. Frequent pleas from me had little effect. Warnings from our internet provider when we reached 75% and 100% of our allotment for the month were ignored. Then I came up with an economic solution.

Each computer in my house has a desktop network meter that measures internet usage for the month. Each member of my family gets an equal share of the “free” GB each month. Then any overage fees are shared by all of us in proportion to the amount we exceeded our shares.

Here’s an example. Suppose a family of 3 has a limit of 75 GB per month (25 GB each) and one month they use 5 GB, 35 GB, and 55 GB. The overuse is then 0, 10 GB, and 30 GB, respectively. If the overuse fee is $40, then the second person pays $10, and the third $30.

Making my family actually hand over cash seems to have made quite a difference. I no longer harp about internet usage, and we haven’t had any overuse fees since I put this plan in place. We’ve used small economic incentives to improve harmony.

15 comments:

  1. Incentive? Maybe the wrong term, penalties instead? I may ask you about this meter thingy, sounds like a good idea for my issues.

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    1. @Big Cajun Man: The incentive is to avoid the penalty :-)

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  2. Chuckle. That'll work for now but what are you going to do when a high bandwidth user starts to login to a low bandwidth users computer?

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    1. @Steve: Fortunately, my family just needs some gentle persuasion. I don't seem to be sheltering anyone who would blatantly steal.

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  3. Interesting. I suspect if I charged my wife overage fees (don't need to, but if I did) there would be a small riot; she loves her internet :)

    Kidding aside, we don't download much. I don't think we have ever surpassed our 60GB limit.

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    1. @Mark: Fortunately, I'm not going to be trying to collect from my wife. She and I are usually under 5 GB per month.

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  4. Amazing! the same "if you want it you can spend your own allowance on it" theory appears to be working with the children (almost-adults?) in your home. I'll have to remember this one for the future as I suspect those days are coming here soon.

    Steve, maybe you've forgotten how strongly the young feel injustice: they will spy on each other endlessly to report any attempts to sneak downloads on the other's bill.

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  5. Certainly possible - but also possible they'll collude and login to their parents computers knowing they can both profit from it . . .

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    1. @Steve: In theory this is possible, but a sudden spike in my wife's or my bandwidth use would be quite obvious. If my relationship with my sons was this bad, I'd just move.

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  6. I agree that incentives work. The most notable that I remember is the federal government moving bonuses. They will pay your cost of moving, but if you get your weight below a certain threshold, they give you cash for every pound below that threshold you get. Because so many people are over that threshold to begin with, just to get to that level is already saving a ton of money.

    That said, I think you need a better internet plan... I like Teksavvy for about $30/month for 300GB, or just a bit more $2-5 for unlimited.

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    1. @Alex: I looked into Teksavvy for telephone service, but it didn't work in my area. I never looked any further, but maybe it's time to check them out for internet service.

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  7. Hey, if that works for you and it seems that everyone is on board, then why not. We have 25GB we can use a month and we normally hit around 17. We don't download alot either.

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  8. This should not be a surprise. We all have a hard time spending our own money on stuff. If family or government or employers pay for what we use we will not worry about consumption. When we need to pull out our wallets we suddenly see the value. Replace band width use with medical care, sick days or a multitude of other "entitlements" and we may appreciate your solution on a wider scale.

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  9. Internet access is like electricity and water. I'd be inclined to get a better plan. Abundance vs scarcity.

    We have 250 GB/month from Rogers and manage to use most of it. A big chunk goes towards online backups (CrashPlan) and syncing (Dropbox). If you're shooting video, the GB add up quickly. I like archiving the raw files.

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  10. That's a pretty interesting way to manage the limit... but wouldn't it be better just to switch to a provider with no limit?

    I mean realistically if you pay for a 10Mbps connection you can download things at 1.192MiB/s. If you have a 75GiB limit you can download 76800MiB before hitting your cap. That means in 1074 minutes you are over your cap . . . under a day if you actually use what you pay for.

    The only things consumers can do to fight this type of idiotic billing is to switch. Do your part for the good of humanity!

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