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November 28, 2006


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Jake Walker

In my experience, a policy such as this one usually has a clause which requires the person who is complaining to make their complaint known to the hotel, and to give them the opportunity to fix it before following up on the refund. It may also be limited to one night -- that is, if you do not make known an issue in any 24 hour period, you have lost your right to ask for a refund for that evening's stay.

Jake Walker

Here is an interesting article on a similar guarantee at a UK chain of inns:



Interesting. This reminds me of litigation in Germany a few years ago about the no-questions-asked money-back guarantee of American retailer Lands End (I think). The German Supreme Court held, if memory serves, that this policy was anticompetitive and therefore illegal in Germany. The assumption of the court must be that the signal is so credible that it is unfair -- if a retailer doesn't adopt a similar policy it will lose significant business. Some of the transaction costs that Ariel mentions may be lower in the case of an online (or, more quaintly, mail-order) retailer, e.g., no face-to-face shame, but others may be higher, e.g., having to spend time and money sending back products via the mail. I know LL Bean and others have this policy, and I've sent back my share of well-worn camp mocs, so I wonder whether there is a difference across products and services.

saul levmore

The article Jake Walker links us to reports .5% revenue cost for a hotel chain offering such a refund (for which the customer must simply state the reason for dissatisfaction so that the firm can monitor service and improvements) - but perhaps only half of this is attributable to the policy, because some refunds would have been given under an earlier, or perhaps any, policy. Staff morale seems to have much improved, but this may have been because of the novelty and excitement surrounding the initial program and the fact that it attracted attention. One way to look at this is that it is mysterious that the cost is so low. Why don't more people steal newspapers, insist that hotel rooms were substandard, and leave no tips in restaurants?

Another perspective is that a clever thing about the policy is its all-or-nothing character. It appears to send a signal about quality, but that is not much of a signal if the nature of the beast is that very few people will ask for a refund. I would be more impressed with an ex-post pricing policy, or refund. I have often been disappointed with a product, but rarely enough to think that after using it (an overnight hotel stay or a year of wearing moccasins from LL Bean, say), it would really be right to return the product for a full refund. But if the vendor said "if you are dissastisfied, just tell us why, and we will abide by your own assessment of what fraction of the purchase price we ought to return," I think revenue loss would be much greater. Just the other night I had a very expensive meal that was disappointing. With a Hampton/LLBean guarantee we would never have asked that the entire amount be forgiven, but I doubt that anyone in our group would have, ex post, agreed to pay the full price.

Sarah Sulkowski

I (well, actually, my mother) was a beneficiary of this policy once. We stayed at a Hampton Inn and complained when the telephone in our room didn't work. They fixed it, and we thought that was the end of the story. It never occurred to us to ask for compensation. But at checkout time, we discovered that they had comped us for the full cost of the room for that night. We offered to pay but were cheerfully refused. So, for what this tidbit of anecdotal evidence is worth, at least one Hampton puts its money where its mouth is.


The experience of software shareware authors illuminates one aspect of this. Shareware operates under the rule "Don't pay if you don't like the product." or, more accurately, "Pay only if you like the product." Almost nobody pays. Shareware authors frequently report tens of thousands of downloads of their products and only scores to hundreds of payments -- a payment rate of around 1%.

This suggests that a major factor at work is personal pride. If you have to tell a human being that you're too cheap to pay the price, you're less likely to do so. But if you can anonymously obtain the product and anonymously refuse to pay, then there's simply no incentive to pay.

Shareware authors have learned a panoply of tricks to improve payment rates, most involving some sort of constraint upon the full utility of the product that is removed upon payment. This does wonders to improve the payment rates. Unfortunately, it's difficult to use their methods with hotels. The analog would be: "you can sleep in the hotel room for free for one hour, but if you want to spend the entire night, then you must pay." That wouldn't work for either customers or hotels.


Most traditional notions of honor, good manners, and the like seem to be aimed at addressing exactly these kinds of problems. For example, if everyone were like Mr. Pink, the entire profit model of waitressing would break down. Instead, most people tip, even when they don't expect to be repeat customers. Most of us don't take a bunch of papers out of the newspaper machine, even when we're able (and even when we're afforded the opportunity to do so). We don't show up at the all-you-can-eat buffet with a 5 gallon bucket, even when we're allowed to take home a take out box at Luby's.

In a world where people have no honor, no sense that getting an unfair advantage is beneath them and makes them feel so bad they'd rather not do it, everything breaks down. This is, to some extent, the theme of Francis Fukuyama's "Trust" book a few years ago.

I imagine, as an evolutionary biology thing, that this sense off trust is actually quite natural and regular. Without it, social life would be too difficult to sustain. If a bunch of ants can, through instinct, all find their way to the Snickers Bar you dropped and still share morsels with the Queen and the little baby ants, human beings, who are far more complex and equally social, can learn similar good habits. They have learned that it's important to (a) instill habits of cooperation and sociability at an early age (b) ostracize anti-social and selfish behavior and condemn such behavior in our selves.

Overlayed with this was a strong sense of the in group and the out group. Thus, people that can get together for a barn-raising, also could find themselves poisoning wells and burning down villages when an outside group threatened them and reconcile this all with some notion of "good behavior."

Adam Smith had this all figured out, at least implicitly, a long time ago in his companion works, "A Theory of Moral Sentiments" and "Wealth of Nations." He knew that these twin impulses, avarice and moral sense and sympathy, worked together to create wealth but also that self-interest did not devolve into an internecine struggle for scraps. Of course, culture and history plays a large part in all of this. In a nation of countrymen with some shared sense of Us and Them, it's easier not to rip one another off. A great deal of literature in the western world is concerned with teaching the beauty of this kind of cooperative behavior. Tales like George Washington and his Cherry Tree or Aesop's Fables. Breaches of hospitality have always loomed large in diverse cultures as a serious evil and have been condemned in song and story, e.g., Macbeth.

Fractured nations with strong subcultures and "diverse" groupings of people have less trust and must take more steps to ensure they're not hussled and ripped off by deals that only work among people with some honor and sense of shared destiny and kinship. The only reason this guarantee works is because most people staying at that kind of hotel have some decency to begin with and becaue America is a nation, even now, with relatively high degrees of trust. You will be less likely to find such trust in diverse settings; recall the mutual hostility of Korean shop-owners and African-Americans in South Central Los Angeles at the time of the 1992 riots. Surely their ethnic, cultural, language, and other differences had a great deal to do with it.

In other words, in a world with too much diversity, expect worse service and less trust.


Good comments, Mr. Roach, although your final sentence has a nasty punch. What constitutes "too much diversity"? Must we all be the same for peace to reign? How much heterodoxy is acceptable? Given the ever-expanding nature of our social, economic, and political connections, is it not necessary for us to strive towards reducing perceived diversity?


What constitutes "too much diversity?" There's no easy way to answer that. Some diversity is probably good. I like a Taco or a Falafel as much as the next guy. But diversity is not really that important or valuable for social fourishing, contra the gospel of multiculturalism.

As for the global economy, it's been here since at least the 17th Century and before that even through the Silk Road from China to Europe. When Europeans liked cinnamon and cummin and all that good stuff from the East Indes, no one ever thought, "Hey we need to quit believing in our religion and invite these people all to live among us, on the dole if need be, for us to continue trading with their kin and also to learn the errors of our ways."

It's notable, in fact, that in international trade the more coherent ethnic groups do well, especially when scattered overseas. Think about the Indian, Chinese, and Jewish diaspora experiences. In all of these cases, particularly in the case of the latter, certain high risk transactions are only able to be accomplished internationally because of high degrees of trust and the high risk of ostracism from a coherent trans-national, almost familial, ethnic community that will slam those who disrupt the tribe.

In other high risk milieus--criminality for example--ethnic ties are almost essential. That's why you don't see these multi-ethnic crime families like you sometimes do in the movies, e.g., Oceans Eleven. It's more Godfather than all of that, i.e., monoethnic. If you don't believe me, go take a tour of your local prison or ghetto.

As for "perceived diversity," it's not going anywhere because it's an authentic perception. The eyes don't lie. It's easy enough to imagine some of these alien groups are "just like you" until you actually live among them and realize how different they are and, more important, how they can't really be trusted and don't really trust you. The multiethnic groups in America can only come together when those ethnicities intermingle and a new American identity emerges. In the working class slums, people still cleave to "their own kind" and petty ethnic rivalries are extremely common, even along very fine divisions, e.g., Salvadorans vs. Mexicans.

Maybe after a century of closed borders they'll all get along, just the way Irish, Poles, Italians, Russians, and Jews who were once rivals on the mean streets of Pittsburgh, NY, and Chicago now get along. They get along today, more or less, because they don't think of themselves as primarily members of these sub-groups but rather as Americans. In other words, unity and similarity is the key to social peace, not diversity. Ask any Serb/Croat/Bosnian/Kosovar about all of that.


Indeed, ethnicity is a major source of social conflict. My question concerns the likelihood that people need to develop a greater willingness to trust those who are different. Do I really trust that Bible-thumping fundamentalist? I'm not so sure -- those people have some pretty weird ideas. Or how about that Silicon Valley VC? I know these guys and only a fool trusts them. But Francis Fukuyama is right to point out the importance of the concept of "social capital" and a refusal to accept diversity reduces social capital. I'm not saying that we should trust untrustworthy people; I'm saying that society would be better off if everybody -- and I mean EVERYBODY, not just one group -- extended trust more readily and had weaker sense of "us versus them". America has been so successful largely because 300 million Americans are willing to extend trust to complete strangers solely because they share citizenship. If we could extend that social capital to larger groups, we'd be even better off.

How to accomplish this? Well, we could try to assimilate everybody as Americans -- don't laugh, we're actually doing it all over the globe. If we lead the way, we really can get people to follow. However, if we take a xenophobic approach and treat other nationalities as dirt, our subversion of national identities will fail. Given the rapid growth and intertwinement of economies, security interests, and so forth, we can't afford to waste time on this problem.


Re "However, if we take a xenophobic approach and treat other nationalities as dirt, our subversion of national identities will fail."

I respond:

Unfortunately what has happened with recent immigrant groups (since 1980s), contrary to the continental European immigrants of the 19th Century mentioned by Roach, who wanted to assimilate, learn English, and were thrilled to be in the land of the free, is the *immigrants treat the USA culture as dirt.* See, e.g., Miami since the 1980 Mariel boatlift. In Miami one can find entire swaths of land where nary a person can speak a word of English (not even "hello"), and these folks have an average time living in the USA of 20 or 25 years. The "new" (since 1980) immigrants, in large part, have done the exact opposite of the 19th century immigrants who helped build our great country. They refuse to learn English on purpose (now we have ballots in 3 languages in Miami), conduct their entire lives in their native tongue, don't consider themselves "Americans" (they are often South Americans), etc.

This state of affairs is not good for the future of our country.

That senator from Idaho or wherever who recently called Miami a third-world country and/or a place where one feels like one is not in the United States, and who is now getting slammed for it, was correct as to many areas of the city.


I was referring to this.

Colorado congressman calls Miami a third-world country:


Gov. Bush condemned his comments in a letter yesterday, but the congressman is correct.


Bush's view:



It's not just the immigrants who are different. I think it's natural enough people want to stick with their own kind, follow their old ways, and make a buck in America by shedding as little of their native identity as possible. They were assimilated through a combination of (a) aggressive public education efforts (b) self-confident and at times less-than-welcoming shaming and pressure by natives and (c) the natural effects of cutting off the flow for two generations between 1924 and 1965.

As for Erasmussimo's argument, it's a bit fantastical. People trust fellow Americans largely because they're trustworthy. Trust is extended when it makes sense to do so. We trust our family, our friends, our neighbors, our co-workers, members of our community, members of our religion, and citizens in our country roughly in declining order of importance based on our similarities. Does any real American really trust an illegal alien? A strange looking recent immigrant? A guy from a totally different social milieu? No. And we don't because it makes sense not to do so, just as we trust when it makes sense to do so.

We can sing John Lennon's "Imagine" all day long, but reality has a way of catching up with us. Just ask Reginald Denny or the Korean Grocers targeted by Al Sharpton or, for that matter, the enormous numbers of victims of crime by illegal aliens.

We certainly should act gallant, welcoming, and decent to people that are legally in this country. It's hard to learn a new language and adapt to a new culture. I believe Americans' decency and welcomingness has proceded to absurd lengths, because instead of gently instructing them on our native folkways and language, we instead want to pretend we're not a people like any other with common habits, language, clothes, etc. We are a nation like any other. We need to protect that identity and insist that newcomers adhere to it. Otherwise, not only will that identity disappear, but our collective lives will be made less efficient and pleasant through the lack of trust engendered by the balkanizing diversity that is mindlessly praised by liberals, academics, and other pseudo-intellectuals.


Vice, just FYI, Tom Tancredo is well known in Colorado (and to others familiar with the state's politics) as a xenophobic bigot. The only reason he is still in office is because of the incredible power of incumbency. I would not put much stock in much of anything he says. He's one of those liars who jumped on the term limits bandwagon back in the day, promising not to serve more than three terms. Well... guess who's finishing up his fourth term now?

Sarah Sulkowski

What I loved (and continue to love) about the U of C: true freedom of thought and speech. What I found (and find) disturbing: the willingness of some to interpret that freedom as a license to celebrate bigotry. This thread isn't quite there yet, but it's on its way.

Whatever happened to the Hampton Inn discussion, anyway?


Mr. Vice, there is little difference between Miami today and New York City at the turn of the last century. Indeed, even before then the complaints about the "foreigners" in various sections of NYC were perennial. They had taken over, they refused to learn the new language, yadda yadda yadda. Guess what? Their children began the process of assimilation and their grandchildren completed it. Exactly the same thing is going on in Miami. You just need a little patience. The immigrant generation NEVER assimilates, and even the first locally born generation tends to retain strong ties to the motherland. It's not until the third generation that you see people breaking away from the ghetto.

Mr. Roach, you raise a number of interesting and discussable issues, but I can't help pouncing on this statement: "We are a nation like any other. We need to protect that identity and insist that newcomers adhere to it." What, precisely, is that "identity" that you wish to protect? A love of baseball? I don't care for baseball -- does that make me unAmerican? A gustatory preference for hamburgers and hot dogs? Sorry, I really try to minimize the amount of fat in my diet -- surely that doesn't compromise my status as an American, does it?

I would suggest that there are only two absolutes about the American identity: the English language and the Constitution. The former, despite much wailing and gnashing of teeth from those with little appreciation of history, is under no threat. Yes, immigrants don't speak English. Surprise, surprise, they were brought up in a foreign country where they speak a different language. Yes, they prefer to speak their native language. I'm in Hamburg just now and gollygee, I sure appreciate that everybody here speaks English (well, everybody except the train and bus workers). People tend to have a lot of inertia when it comes to changing their languages. My old friend Erasmus had this little jewel in his collection of adages: "like teaching an old man a new language". Our modern version, much inferior in my opinion is, "like teaching an old dog new tricks." People don't give up their native language easily. But don't worry -- we don't need to force them. The economic benefits of English are so huge that the second generation makes a major effort to learn it and the third barely bothers retaining the old language.

For me, though, the defining characteristic of the American nation is the Constitution. If you are loyal to the Constitution, then you're 100% American in my book. It doesn't matter if you wear a sombrero instead of a cowboy hat, a sari instead of jeans, worship anybody other than the Jesus Christ, or prefer sushi to ketchup. All those things, in my mind, are completely irrelevant to our national identity. And that is this country's greatest strength.


I'm surprised for someone who has travelled that you don't notice that people that are broadly liberal minded and speak English are quite a bit different than Americans and that there are broad commanlities of values, experiences, expectations, habits, and the like of Americans that make us much like any other nation. In other words, we are (or at least were) monocultural even though we were multiethnic and multiracial. I should note two important things about the fin de siecle Americans that you think are much like the Latin-dominated Miamians of today: the flow of their ethnic peers was cut off more or less completely in the 1920s, and they were somewhat coercively assimilated through self-confidant public schooling that aimed to instill in them American values, habits, styles of dress, language, etc.


Mr. Roach, your first comment about my not noticing differences between people seems to me nothing more than a snide shot; I don't see what relevance it has to this discussion. Moreover, it's garbled. Americans aren't 'broadly liberal minded" and don't speak English? Perhaps some rephrasing would clarify.

I dispute your claim that the American nation is monocultural. It has NEVER been monocultural! Are the Amish not Americans? What about the nisei? The Chinese Americans? Are Jewish Americans of the same culture as residents of East LA? Are Montanans and New Yorker City residents of the same culture?

As to the assimilation of immigrants a century ago: the important point is that it took a generation for the process to even get rolling. The original immigrants never assimilated; their children started the process of assimilation and their grandchildren completed it. The same process is underway today in Miami. In 50 years' time this silly hand-wringing over the Cubans in Miami will be forgotten, and Miami will be celebrated for its "special character" and its "fine Cuban cuisine" (much of which will have been created in Miami).


Roach, I'm also confused at this:

"people that are broadly liberal minded and speak English are quite a bit different than Americans"

So... um... those of us who speak English and are broadly liberal minded aren't Americans? I'll admit to some occasional ill feelings toward my government, but as far as I know they haven't revoked my citizenship yet...


I suppose I was a tad unclear. After "liberal minded" you can insert [who hail from other countries].

As for regional differences, they exist, but a brief jaunt overseas will remind you of how much you have in common with such people. Certain foreign-speaking locales--Chinatowns, East LA, large swaths of Miami--are not recognizably American. They are no more American than Amsterdam or Juarez or Bejing.


Mr. Roach, I disagree with your belief that immigrant sections of our country are "no more American than Amsterdam..." etc. In at least one profoundly important way, these places are MORE American than Peoria or Portland. These people have bet their lives on the American dream. They have staked everything on the belief that, with hard work and spunk, they can make something of themselves. All the studies show that they are less interested in government assistance than the average American, that they are fundamentally more self-motivated and self-reliant than the average American. In this important respect, they truly are 100% American.

I suspect that someday Americans will come to realize just how valuable the contribution of immigrants has been. The European empires took only the resources of their colonies, but America takes something much more precious: their human capital. We vacuum up the most entrepreneurial, the most hard-working members of other societies. I'm not complaining -- it's great that there exists a society that rewards hard work and dedication and I'm glad that people from all over the world take advantage of that opportunity. But to decry this social movement, to complain about immigrants, is to misunderstand the enormous value they bring to our nation. They are the lifeblood of American entrepreneurialism, the ongoing injection of human talent that makes our economy so fast on its feet. Sure, we get some losers in the crowd -- but there are plenty of crooks and lowlifes in lily-white communities, too. Judging them by their clothing or eating habits is the most superficial of approaches.


I hope Erasmussimo is correct, and I suspect he is. Perhaps I do need more patience.

Unfortunately for me, I live in Miami NOW, and what gets me depressed is when I see 8-year-old little Cuban-American kids who speak Spanish and can barely speak English (barely at all), for the sole reason that their selfish Cuban parents make a very, very strong, concerted, purposeful effort to make them speak only Spanish and not learn English, apparently ignorant of your point about learning English being good for their kids' economic future. I guess I'll have to wait for those kids' kids.

How will my community be in the intervening 30 years, when I can't go to a Home Depot or a Target or a Walgreens and find an employee who can speak to me in English? I ride the metrorail (our above-ground pathetic attempt at mass transportation downtown) almost daily and I give directions to folks (which exit to take, etc.) in Spanish an average of twice per ride.

I'm a native and don't "need" to learn Spanish, but I can speak a fair bit of Spanish, enough to communicate with these folks. Why can't they at least speak as much English as I can speak Spanish, having lived in the USA for 8 or 10 years? I guess they are old dogs, so to speak.

I do understand your point about generations, however. Indeed most of the "kids," including young adults, speak perfect English with no accent, have assimilated, etc., and only speak Spanish for their parents' and grandparents' sake.
And their kids, the third generation, will be completely [North] "American."


The major immigration phenomenon of recent times is Latin American immigration. They are worse on every index of social flourishing--illegitimacy, crime rates, education rates, wealth etc.--and their children are in some instances worse off even than first generation immigrants.

Here's one of many articles on higher rates of crime among illegal immigrants:


That said, even if immigrants were equal in every respect, the very fact of them being different would create some of the frictions and other problems I discuss above, simply because their increased diversity would increase social friction and decrease trust.

I do wonder, though, at the risk of you whining some more about my tone, how much experience you have with Latin American immigration? I've lived in three cities with enormous Mexican populations: Chicago, Dallas, and Houston. While all those cities are fine places to live, large swaths of them are dangerous, dirty, less healthy, less educated, and generally less desirable places than they were even a few years ago because of large poor immigrant populations.

On your other point, there is evidence that legal immigrants have higher rates of welfare participation than natives, so the dated cliche about the entrepreneurial immigrant doesn't seem to stand up to scrutiny. Here's one study, that shows Latin American immigrants in particular have fairly low rates of entrepreneurship:


Even if some are these "super-American" immigrants, perhaps we shouldn't take millions a year from a neighboring country where 2/3 or more of these immigrants don't even have a HS diploma. I didn't think low education and menial labor is the essence of America. Is it?

Incidentally, I always resent this notion that somehow an immigrant can be "more American" than Americans who are born here, without having contributed anything to American life other than, perhaps, ensuring we get a cheaper meal at restaurants and a cheaper car wash. It's doubly offensive that these same people, liberals that is, often want to write out rednecks, country folk, Christian fundamentalists, rich WASPs and who knows who else as inauthentically American because they're uneasy with these strange-sounding foreigners who are becoming more numerous every day and who show their Americanism often by flying a foreign flag, not learning English, and sometimes by committing crimes against native-born Americans.

But I guess all those Mexicans running off with TVs and dry-cleaning and groceries during the LA Riots were figments of my imagination.


"That said, even if immigrants were equal in every respect, the very fact of them being different would create some of the frictions and other problems I discuss above, simply because their increased diversity would increase social friction and decrease trust."

Hmmm... so DIFFERENCE makes trouble then? Trouble isn't the result of other things, like racism or xenophobia? Difference = trouble and mistrust?

Roach, now I'm confused. I took you to be one of those "viva la difference" folks who think that the differences are what makes life interesting and exciting and dynamic. Or do you prefer your girlfriends to be "mannish" (or at least, as much so as you)?

Indeed, it seems to me, given your assertion several times on this blog that men and women are inherently different in a variety of ways you've thus far declined to elaborate upon, that the logical conclusion of what you're saying is that men and women should either distrust each other, or become more alike. In fact, given your belief in inherent sex difference, doesn't this imply that homosexual relationships would be the most naturally trusting and concordant?

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