Economics in Office Space: Peter Faces the Consultants
Designing the Right Incentives is a Game Theory Problem
"Office Space" is a 1999 comedy film that satirizes the everyday drudgery of corporate office life. The story follows Peter Gibbons, an uninspired software programmer who, after a hypnotherapy session gone wrong, finds himself completely apathetic about his job at Initech Corporation.
There are several economic lessons from Office Space that are interesting to examine, and here we explore a scene where Peter Gibbons faces the “Two Bobs” - consultants looking to downsize efficiently.
The Bobs are taken aback by Peter’s comments, including “It’s not that I’m lazy, it’s that I just don’t care”. They take his attitude for genius and start to think about how to redesign incentive structures. This is a good example of how to apply mechanism design in the workplace
This clip gives us a good opportunity to talk about the economics and game theory topic of mechanism design. Mechanism design is a process of using game theory logic to design rules to get to a desired outcome.
Backing up - it might be helpful to think about what you’ve done with game theory before. When you think “game theory”, often you think that somebody hands you a problem and you solve it. But that’s not the real world, and mechanism design recognizes this. You have a desired outcome in mind, and you have to set up the “rules of the game” to attempt to get to the outcome.
It is applicable for lawmakers, managers, parents, coaches … basically everybody.
Watch the clip here: