Urwerk, a Geneva-based boutique watch maker, was founded only in 1995. Placed next to the hallowed names of the industry boasting lineages of at least century, if not two, Urwerk (a play on the German word 'Uhrwerk' which refers to the movement used in watches), is an infant.
Thus, when a creation from this watchmaker was named the best sports watch at a watch competition last year, the decision left some doubts, said Massimiliano Landi, professor of economics at Singapore Management University.
Landi, whose research areas include political economy and game theory, has been asked to design and oversee the implementation of a voting system for the Singapore-based competition, the Grand Prix d'Horlogerie Asia. This event, in turn, is the regional edition of the Grand Prix d'Horlogerie held at Geneva annually, described as the Oscars of the watch industry and of course a highlight of the industry's calendar.
Held for the first time in 2007 in Singapore, the Grand Prix d'Horlogerie Asia has been attracting a strong and steadily growing following, with a diverse of voices not shy about making their opinions heard.
Probably as soon as the results are announced, there will be people saying, 'why this and not that.' You can never make everyone happy. There is always someone who thinks that what you found isn't deserving, said Landi, a mechanical watch enthusiast himself.
What we do know from existing literature is that you cannot find the perfect voting scheme, said Landi. So, when Bernard Cheong - whose reputation in the watch circles very much overshadows the fact that he is also a medical doctor - invited him to share his expertise, Landi knew which aspects to address and avoid.
Big money, deep passion and complicated movements
First, a quick description on why the process of selecting watches is important.
Each year, luxury watch makers trot out their latest creations in glitzy black-tie events held in Switzerland - a country that needs no further introduction on the role it plays in this industry. Not many industries can invoke the same kind of money, prestige, commitment and passion as that of luxury watches. Hailed by its ardent followers as the epitomic combination of creativity, engineering, artistry and respect for tradition, luxury watches inspire a diversity of opinions.
Players of this industry range from global giants like The Swatch Group, Richemont and LVMH (with multiple brands in their portfolio) to smaller makers like Urwerk, as well as independent craftsmen who usually name their creations after themselves. Competitions like the Grand Prix d'Horlogerie are platforms for them to raise their profile and to win some prestige.
Now, this is not some mere fanciful and mindless pursuit of a handful of rich and listless Europeans. The watch industry is one keenly watched in this part of the world. Asia is emerging as an increasingly important market for luxury watches. In January this year, exports of Swiss watches, as a whole, rose just 2.7% to 976 million Swiss francs (S$1.27 billion). Look beyond this headline figure and you might see the significance of Asian markets - exports to Singapore surged 142.5%, those to China rose 87.2%, while Hong Kong, the single largest export market, was up 25.9%. In contrast, sales to United States dropped 34.4%.
One might ask, given Hong Kong's position as Asia's clear market leader, why wasn't the Grand Prix d'Horlogerie Asia held in the former British colony instead? Indeed, according to Landi, Hong Kong was one of the venue candidates. However, Singapore's high concentration of renowned connoisseurs and experts, many of whom devote time taking part and moderating well-followed forums on the subject and not just buying watches, are collectively one big reason.
They, as a group, make their presence felt, and one of them is Su Jia Xian, who is now a final year student at SMU's School of Economics. The 25-year-old, who has taken a serious interest in watches since he was 12, is recognised within the circle as probably one of the youngest watch connoisseurs in Asia if not the world. In the 2009 edition of Grand Prix d'Horlogerie Asia, Su was appointed Chair of the awarding jury.
With so many enthusiasts like Su in Singapore and Asia, it is not too difficult to imagine that the value of a particular watch will head north if it wins at the competition. Such awards will also bring prestige, big money, brand loyalty, and lots of heady debates. That is why it is important for the judging panel to select winners that can pacify the most number of interested parties.
Existing voting systems
Landi set off with a clear guideline: to come up with a voting system that can be perceived as transparent, easy to understand, easy to implement, easy to test, and of course - one that can produce an outcome - and not just that, to produce outcomes that avoid mistakes.
Some systems have pretty obvious flaws that render them unsuitable for the watch competition. For example, under a simple majority system, let's say one winner has to be chosen from five candidates. If all the votes are evenly split, there won't be a winner. If a watch garners 30% of the votes - the largest number - it can't be the winner because it is not the choice of the majority, because that means more than 50%, said Landi.
Under another system - what the Geneva competition is using; similar to how the Olympics Games score for events like diving and gymnastics - the panel of judges to give a score of one to ten. What are the weaknesses of such a system?
Let's say, if there are two watches, which are both strong candidates: do I give 10 points to one, and one point to the other? asked Landi. By doing so, a judge can potentially create a gap of nine points between two strong, serious candidates - a biased skew because of the sheer absolute difference in the points. There is no viable control over how different the judges can score for the same watch. The opinion of just one judge can potentially sway the outcome drastically.
Landi's implementation, the approval voting system, has several features customised for the competition. For example, there will be two groups of judges. First, watchmakers submit their candidates for each of the various categories, and the first group of judges will proceed to select the finalists.
Then, a second group of judges will be tasked to choose the winning watches from the list whittled down by the first group. According to Landi, the reason why two separate groups of judges are used, rather than having the same panel vote for both rounds, is to have a clear, conscious separation of power.
Each judge can approve as many watches as he or she wants from the list of watches put up for competition. Under this system, judges will award one point each for the watches that he or she approves and if not, zero. The points will then be tabulated. Obviously, the winning watch is the one with the highest number of votes. In the case of a tie, the process is repeated.
At this juncture, it is useful to note that the judging panels for the Geneva competition is made up of people who are somewhat related to, or personally involved in the watch industry. In contrast, the judging panel in Asia comprises people of other professions - acknowledged as watch experts in their own right, nevertheless. They know about watches because they buy them, they collect them, said Landi.
Beyond the elimination of any pre-conceived biasness in the judging panel, Landi feels that the approval voting system used here - with its score of only either 0 or 1, will help keep things simple.
You don't give 1, 2, or 3 (points); you draw a line, and say, 'this, I am confident to see as winners; this, not so.' It is very simple. People look at it and can understand it. It doesn't look too easy to manipulate, because the worst you can do, is to give 0 points to a watch that deserves 1, rather than 1 point to a watch that deserves 10 points, said Landi.
To be sure, there are other viable voting systems too. One such example is the pair-wise comparison method. Under this system, Watch No. 1 will be pegged against Watch No. 2, 3, 4, 5 and so on. Then, Watch No. 2 will in turn be pegged against 3, 4, 5 and so on. For soccer fans following their favourite teams, this system will not be unfamiliar, even though they know this method as round-robin, or, less elegantly but more bluntly: all-play-all. The watch that ends up with the highest number of points is the winner.
Approval voting used elsewhere
Clearly, while luxury watches are something that draws admirers all over, not everybody can afford to amass collection, much less participate in such competitions. That does not mean that the voting system devised by Landi is thus confined to this arguably niche pursuit. The approval voting system can be applied in other situations too.
For example, when there are more than two choices, the so-called plurality voting system is sometimes used. While they have the choice to pick just one just one from a field of three or more candidates, such a voting system might led to an undesired result - to the detriment of the voters themselves.
Case in point: Ralph Nader, long-time American political activist, was said to have drawn away crucial votes from Al Gore in the states of New Hampshire and more critically, Florida, in an episode that eventually handed George W. Bush the presidency in the 2000 elections.
For supporters of Gore and Nader alike, Bush is the least desired outcome. Nader, a serial candidate, took 2,882,955, or 2.7% of the total votes. Bush Jr. took 50,456,002 votes - lower than Gore's 50,999,897 votes. However, under America's electoral college system, Gore won 266 electoral votes, 5 votes shy of Bush's 271. What tipped the balance was the voting in Florida, where Bush won by only 537 votes.
By winning Florida, Bush took the 25 electoral votes, consequently setting in motion an eight-year presidency marked by wild spikes of popularity following 9-11 that tapered off almost right after he won his second term. This episode remains divisive today as it was 10 years ago. Historians with a penchant for what ifs will likely spend more time analysing this remarkable chapter in democracy.
By voting for Nader, these people decreased Gore's chances of winning. So, in the end, they got Bush - which was their worst outcome. So there might be a situation where if you vote according to how you feel, according to what your preference is, you might end up hurting yourself, said Landi.
Thus, a more strategic view ought to be taken, and a relatively simple and straightforward way of doing so is through an approval voting system. You vote for your favourite candidate, and then, your second favourite candidate. It is a way to express your preference in way that might not hurt yourself, he added.
Controversial (some say botched) US presidential elections aside, approval voting can be used by professional or industry organisations when they elect their representatives. It is short, it is not complicated, said Landi - the perfect balance to an otherwise complex environment, like the watch industry.