The $50 That No One Wanted
One of entertainment’s most famous contractual extras was the M&Ms clause.
When the band Van Halen was on a concert tour, they never knew if a hall or arena could safely accommodate their complex wiring and heavy equipment. They worried about an inadequate electrical set-up or even a collapsed floor. Yes, their contract explained all they needed. But they never knew if anyone read it. So, they inserted an M&Ms clause. If the brown M&Ms were missing, then management probably was aware of their safety details.
This is the tiny section that had huge significance in a Van Halen 1982 World Tour contract:
That little Van Halen clause relates to a big teaching problem.
A High School Syllabus
As teachers, we are never quite sure if our students look at our assignment sheets. Consequently, they could be missing important instructions or crucial comments,
One teacher found out the sad truth after trying to give his students a pandemic treat.
On the second page of a three page syllabus, a professor at the University of Tennessee inserted the “key” to a $50 prize. On that page, students were given the location and combination of a locker that contained $50. When the professor returned to the locker at the end of the term, there sat the $50. Or, as he said, “My semester-long experiment has come to an end. Today I retrieved the unclaimed treasure.”
Our Bottom Line: Default Options
Whether it’s brown M&Ms or a $50 unclaimed treasure, we can confirm that many people ignore what they need to read. For that reason, behavioral economists tell us that benevolent default options are crucial. As Harvard law professor Cass Sunstein explained, we gravitate to defaults because they simplify our lives. Since defaults are almost like doing nothing, we select them.
An economist might add that default options are decision “nudges” that shape demand and supply. No longer do we have millions of consumers and producers independently affecting equilibrium. Instead defaults create the incentive to select a specific type of mortgage, a certain retirement plan, or a 20% taxi tip.
Unknowingly, van Halen and a Tennessee professor proved why we defer to defaults. They also confirmed that, unaware of the content of a default, we could experience an unhappy surprise.
My sources and more: It’s always so nice when a new story complements an old one. Today, this NY Times article about the syllabus connected perfectly to this 2016 Insider description of the Van Halen contract. Meanwhile, these comments from Cass Sunstein convey a brief overview, and these an in-depth discussion, of his wisdom about default options. On the same topic, but from a slightly different perspective, econlife based a post on decision fatigue.
Please note that today I included several sentences from a previously published econlife post.
Originally published at https://econlife.com on December 21, 2021.
