Expected Loss = E[(a)(Tricks)**2 + (1-a)(Leftover Candy)**2]

The asymmetric risk inherent in Halloween is unhealthy. Which is more costly in expected value terms, running out of candy and having to turn out the lights and pretend you aren't home to try to avoid getting tricked, or having too much candy on hand and having to eat the leftovers? (This is a priori, before you are sick from eating the candy, and it also assumes you already have an ideal amount of candy on hand, i.e. the term leftovers refers to deviations from this optimum. It also assumes that bringing the leftovers to work and dumping them on others won't be appreciated, even if the candy does disappear rather quickly.) For me, the answer is clear, the loss from tricks is weighed more heavily than the loss from leftover treats. I think I even subconsciously overestimate the size of the safety cushion, i.e. the value of the parameter a is near one.

As the night went on and it was clear I had way too much candy, I tried to solve the problem by increasing the number of items each trick or treater got. But not enough so there was any chance of stocking out. If I could have determined who the last trick or treater was, they would have done very, very well. But by increasing the payoff as the night wears on, I have to worry that each year thereafter the last trick or treater will arrive later and later as they game each other to increase the payoff per house visited, so maybe that isn't such a good idea after all.

I do know this. Right now the incremental value of one more 'Fun Size' Snickers bar is less than zero, though of course the value will reset itself in due time. I might be able to stand one more bag of peanut M&Ms though.

Comments

[paine]

ghouls will be ghouls
and love it whatever way it bites
but like richard kimbell
there's no rest for
the mind of
homo economicus halloween--nsus

[save_the_rustbelt]

We had a rain storm before the children could finish, so the inventory is overstocked. And no one tricks in a downpour.

Goobers for breakfast, Goobers for lunch, Goobers for dinner!! Raisinettes for dessert.

In an amazing feat of bad timing, I see the doc today, and the gods of cholesterol may be angry.

[pgl]

Greg Mankiw had a post on the inefficiency of Halloween - nothing Christmas is even more inefficient. Baa Humbug!

[Ken Houghton]

Hallowe'en has the potential for addressing inequality measures; would anyone expect Mankiw to approve?

Xmas, otoh, lacks efficiency because it allows that there might be a reason for immediate gratification. Better someone put it into the SocSec fund to finance tax cuts for Mankiw and his friends.

(FYI, I read pgl's "nothing" as "noting" and "Baa" as "Bah.")

[Ken Houghton]

sorry; that should be "inequality levels."

[robertdfeinman]

Two suggestions:
1. Give money instead of candy next year.
2. Take your excess candy into your classroom and give it out to the students, either impartially or as "rewards". Even grad students are kids at heart.

I usually end up with excess (and also go and buy cut priced candy the day after). I consume one item per day and my purchase usually lasts me until the next holiday. Now that companies make Christmas packages one doesn't even have to wait to Valentine's Day for the next cycle...

[donna]

It's important to buy only candy you like (if you want to eat the leftovers) or that you don't like (if you don't).

This limits the disutility....

[JRossi]

It's amazing the amount of candy kids get these days. My kids got 2 or 3 fun-sized bars at each house. One guy gave them each a regular sized bag of skittles--my five year old ate his bag in 11 minutes. Thirty houses and they're set till Easter, not to mention Valentine's Day, which became a big deal for kids while I wasn't paying attention.
Never run out of candy--very bad form. Take the extras to work and give them to the chubby coworkers.

[dd]

You can use candy as an ingredient in many baking recipes. Crushed candy bars are terrific in cookies (think candy cookies instead of chocolate chip), brownies (milky way/snickers/m&ms), cupcakes or sheet cakes. Just remember to lower the heat when baking. It's also great as an ice cream topping or as a topping on frosted cakes or cupcakes.
Also many types of candy freeze very well. So just toss those extra bags in the freezer and use them later for baking.

[David]

Left over candy makes for great bribery while still giving you cover from adverse effects: you didn't mean to buy too much, after all. It seems to help with pesky course evaluations too :)

[Patricia Shannon]

I printed out this article. Do I need to send a royalty somewhere :)

[Michael M.]

One thing is clear. Risk aversion is a good thing for candy sellers! It's kind of like the health insurance market. The kids are the patients, you're the insurance company intermediary, the candy is the service, and the candy sellers are the care providers. The kids are exercising moral hazard by turning up late to get more candy, which in turn makes you either increase your candy budget, thereby driving up candy demand and costs further, or deny them service. If you were European, you could nominate a single-payer candy buyer/distributor in your neigborhood for Halloween, ration the candy, and divide costs among your neighbors! But somehow I think that would defeat the spirit..