You ever have one of those group projects where you all need to find a time to meet, but some or all of the group members have packed schedules, so you pull out the whenisgood and it turns out the only times that work are 2-2:15 pm on Thursday or 6:30-7:30 am on Tuesday?

For this sort of scheduling problem, the best group members are those with lots of slack in their schedule - people who either have lots of time available, or have very flexible time commitments which can move around to accommodate a group meeting. But if my schedule is flexible, note that most of the benefits of that flexibility are captured by the group as a whole, not by me: my flexibility mostly allows the group to accommodate less-flexible members.

The slack in my schedule creates positive externalities for the group. I mostly control how much slack to create/maintain in my schedule, but a large chunk of the benefit goes to other people. This means I’m incentivized to create/maintain less-than-optimal slack in my schedule.

Once you look for it, this shows up in other guises too: many different flavors of slack create positive externalities for groups. In general, we should expect people to create/maintain less slack than would be socially optimal, and this in turn will make groups less functional. What do other forms of this look like, and what can we do about it?

Many Flavors of Slack

A few common forms of slack:

Financial: money not budgeted for anything in particular, or which can easily be spent on something else instead, is financial slack.
Time: time not scheduled for anything in particular, or which can easily be rescheduled, is time slack.
Space: space not used for anything in particular, or which can easily be used for something else, is space slack.
Emotional: capacity for excess stress is emotional slack.
Social: multiple social groups which one can fall back on, or the ability to make new friends quickly, provide social slack.

We can also separate short-term vs long-term slack for each of these. For instance, a bank may have lots of capital to invest, but limited liquidity, so they can’t move their capital around quickly: high long-term financial slack but limited short-term financial slack. Conversely, someone who has some savings on hand but is spending as much as they earn has short-term financial slack, but not long-term financial slack. Exercise for the reader: what would short-te...