Still not the complete account of the batlle – middle segment is missing
(HT: Chris Blattman’s twitter feed.)
A blog about economics, politics and the random interests of forty-something professors
Still not the complete account of the batlle – middle segment is missing
(HT: Chris Blattman’s twitter feed.)
In a few years, this blog will focus on the concerns of “fifty-something” professors. Retirement communities in Florida and California will be the main topic of discussion. Before that comes the fiftieth birthday party. Should it be “celebrated” with a public gathering of some sort, ignored completely, or with some significant event involving just the nuclear family? In investigating the final option a few years in advance, expecting to be really decrepid by then and hence need a lot of help to move around, I looked at the National Geographic tours. They have a sophisticated pricing scheme:
Our trip costs are determined by group size. (As you can imagine, we’re able to secure lower per-person rates with
larger groups.) When you sign up for a trip, its highest cost will be noted on your initial invoice and then adjusted 30
days prior to your departure. If for any reason the group falls below the minimum number of guests, a small group
surcharge may be applied. (We have found that our guests prefer to pay a bit more rather than have their trip canceled.)
Please note that trip physicians, lecturers, and GeoEx staff are not included in the guest count to determine per-person
For an exotic trip to Turkey, this boiled down to: $9350 (6–7 guests), $7950 (8–9 guests), $7450 (10–11 guests), $6350 (12 guests).
The higher the volume, the lower the price. No penalty for booking early. But at these prices, I’m leaning towards ignoring the 50th landmark completely and putting the money down for a foreclosed home in Florida.
Professional soccer leagues tend to be dominated year after year by a small number of top teams. Major League Baseball on the other hand, has seen World Series appearances by the Detroit Tigers, the Texas Rangers, the Philadelphia Phillies, the Tampa Bay Rays, etc. It seems like any team can assemble a champion.
These two sports have very different production functions. A baseball team is basically a collection of individuals. Among team sports its the closest thing to an individual sport. A team’s output is basically the sum of individual outputs with very little complementarity. In baseball there is very little talk of one player making his teammates better. The production function is additive and, offensively, players are perfectly substitutable.
Soccer is at the other extreme where players are highly complementary. Scoring a goal is a total team effort. Even the best striker needs good chances. In soccer, the best players are more productive when there are other good players on the team. The production function is closer to Leontif.
These differences in production explain the differences in market structure. Consider competitive bidding for a top player in the two sports. In baseball that player’s marginal product is the same on any team he would play for so many teams will compete and any team could land him. In soccer that player’s marginal value is highest for the team that is already the best. The competition is going to be very weak and he is likely to sign with the best team.
In baseball competition levels the playing field. In soccer it tilts it even further.
It’s called Coffee Places Where You Can Think, and its right there. A word of caution though. Ariel is a connoisseur of coffee houses but his preferences are guided mostly by the atmosphere of the place and not at all by the quality of the coffee. Indeed his bad taste in coffee rivals only his bad taste in web site designs. So use this guide accordingly. (Here is a series of pictures of Ariel’s tin can of instant coffee traveling to exotic locales across the world.)
But the picture above is from The Mudhouse in Charlottesville, Virginia which is a place I can also highly recommend, having been there and had an exquisite cappuccino just last month with Federico Ciliberto.
We have coordinated on April 1 as the date where everyone gets to indulge their latent desire to say something false and hope that it gets believed. The problem of course is that as a result nothing you say on April 1 is believed. Credibility has a public good aspect to it and the social optimum would conserve enough of it so that at least some of us could feed our hilarious public deception jones.
(You might argue otherwise. By reducing credibility across the board we set the stage for the truly exceptional liars to show their stuff fooling people even though everyone was expecting them to do exactly that.)
It soon becomes tempting to start making up stuff on the day before April 1, and then eventually sooner. Whether, how, and why this unfolds depends on just what are the basic forces at work here, a question about which we can only theorize. We know by revealed preference that people want to say made-up stuff. But its more than that, you want people to believe it, pass it on and then get called out for believing a fake story. And the best kind of April Fools story is the kind that is ex post so obviously fake that the foolee looks especially gullible.
All of these suggest that April 1 is the least ideal day for April Fools. So then we can ask why are April Fools pranks perpetrated on April 1 and not some other day? Is it because April 1 gives you reputational cover for reporting bogus stories? It sounds like a good theory, and if it were true we would not have to worry about March 31 Fools and the eventual Year-Round Fools. But it doesn’t seem to survive closer scrutiny. If my reputation for legitimate reporting is safe for that one day it must be because nobody expects me to do legitimate reporting that day. But then April 1 is the last day I would want to be dropping my April Fools.
Instead I think its something more subtle. The perfect April Fools prank works by first roping in the reader but then slowly revealing clues that remind her that its April Fools and you have been had. April 1 plays a crucial role in this development. The Reveal would not come with the same impact on any July 19. Indeed the best April Fools pranks tell you the date somewhere along the way. Its how you say to the reader “look at you, you forgot about April Fools, and I got you” without actually saying that. And it provides ammunition when he blindly passes the story on and his friends can say “check the date.”
So April Foolers need the following epistemic infrastructure for their pranks: 1) The possibility of surprise, 2) The expectation of surprise. And clearly it cannot be an equilibrium to have both of these if the source of #2 is to be contained in a single date April 1. Once there is too much of #2, there’s precious too little of #1.
And that’s when the pre-emption begins. By publishing your April Fool on March 31, you get more of 1), and still pretty much the same amount of 2). Until of course everybody starts doing that and the unraveling continues. (We are already getting close.)
There is one bright side to all of this. When everybody has come to expect that whatever you say on April 1 is false, you may indeed no longer be able to fool people into believing something you made up. But the flipside is a welcome opportunity for many wishing to come clean at minimum cost. You now have a day when you can tell the truth and have nobody believe you.
As we prepare to take Purple Pricing to the next level we are looking to hire a developer to help us build the software that will implement our Fan-Friendly pricing mechanism on a large scale. We need someone with experience building an engaging front-end that interfaces seamlessly with the variety of back-end ticketing systems being used by venues and teams. Scalability is a big part of it. And we plan to launch it with the upcoming college football and basketball seasons so its a relatively short horizon. If you are interested please contact us by email with your background/experience or otherwise please pass on this message to anyone who might be a good fit.
I am staying in Brooklyn over spring break. There is a certain Brooklyn look. I can’t put my finger on it but it seems to have some common elements: Only browns, dark blue and, of course, black clothing allowed. Jeans have to be skinny and cannot be stonewashed or comfortable. Shirts have to a little too tight and hair has to look greasy. A five day beard is ubiquitous for men. I fit in except I like my clothes loose fitting to accomodate my girth. Also, I lack the final piece of the Brooklyn outfit – a dog. Owners are allowed to release their suppressed color choices on their dogs which often sport an orange or red sweater.
Apart from the dogs, there is much to like here. We could not get into Chuko so we ended up in Zaytoons. The bread is spectacular and the food is quite good though a tad below the high standard set by Semiramis back home. But opposite Zaytoons is Mecca: the Ample Hills Creamery. One child insisted on dessert so we went in even though the rest us were exhausted. What a find – well, it was a find to us even if it’s well known in NYC. We had scoops of maple bacon, pistachio-squared, honey graham and honey snickerdoodle ice cream. Sometimes food brings you closer to God. This was such a case. We want to be closer to Her every day. We are planning a daily visit. We’ll be zealots by Friday when we leave.
I just flew to La Guardia from O’Hare. It is spring break so the plane was full. The United agent tried to persuade two people to take a later flight. Initially, she offered $300. No-one took the bait. She upped the ante to $400. Still no volunteers. Then, she raised the stakes to $400 plus a first class seat.
Maybe no-one was willing to delay their trip. Or perhaps now the blandishment was ever increasing, people were waiting for the better deal.
Obvious solution is to give insurance: if the deal gets better, the people who bit first get the better deal too.
Check out these pictures of bodysurfers ducking under waves.
I grew up body surfing and boogie boarding in Southern California. Riding waves is exhilarating and its the #1 reason you are there but there’s one other unforgettable experience that comes with it and that’s ducking under a passing wave.
A crashing wave is an awesomely powerful thing. So its such an incredible feeling of freedom that with just a little agility and perfect timing you can get yourself down below a 1 or 2 foot protective layer of water where all of that massive power can only just roll over you at most gently rocking you forward and back. And then you pop right back up to the surface to get ready for the next one.
With bodysurfing this is everything: ducking under waves until you are in position to catch just the right one. With boogie boarding there’s a little bit of paddling in between but the board is still small and light enough that when necessary you can get under even the most threatening wave.
But for sure the hardest thing about surfing is that this manoeuver is no longer available to you. For one thing you would be putting others in danger if you bail off the board and let the wave throw it around. But anyway the board is so bulky that the wave is going to drag you along with it.
Forget about learning to ride a wave. That’s as easy as anything else when you can get enough repetitions in. The bloody hard thing about surfing is that it can take months to get that many repetitions in because every time you fall you have to paddle back out through those waves. Yeah there are still tricks (turtle roll, duck dive), but even getting good enough at those for them to be useful takes weeks. The first few weeks you are lucky to get into position for 1 or 2 shots per session at actually catching a wave.
Chullo chortle: Kottke.
Dear Northwestern Economics community. I was among the first to submit my bracket and I have already chosen all 16 teams seeded #1 through #4 to be eliminated in the first round of the NCAA tournament. In case you don’t believe me:
Now that i got that out of the way, consider the following complete information strategic-form game. Someone will throw a biased coin which comes up heads with probability 5/8. Two people simultaneously make guesses. A pot of money will be divided equally among those who correctly guessed how the coin would land. (Somebody else gets the money if both guess incorrectly.)
In a symmetric equilibrium of this game the two players will randomize their guesses in such a way that each earns the same expected payoff. But now suppose that player 1 can publicly announce his guess before player 2 moves. Player 1 will choose heads and player 2′s best reply is to choose tails. By making this announcement, player 1 has increased his payoff to a 5/8 chance of winning the pot of money.
This principle applies to just about any variety of bracket-picking game, hence my announcement. In fact in the psychotic version we play in our department, the twisted-brain child of Scott Ogawa, each matchup in the bracket is worth 1000 points to be divided among all who correctly guess the winner, and the overall winner is the one with the most points. Now that all of my colleagues know that the upsets enumerated above have already been taken by me their best responses are to pick the favorites and sure they will be correct with high probability on each, but they will split the 1000 points with everyone else and I will get the full 1000 on the inevitable one or two upsets that will come from that group.
Do you favor or oppose taxes on bank depositors?
I am totally against it. First, deposits under 100,000 are insured. What happened to that insurance? How could the euro group agree to taxing deposits as small as one euro? What is the meaning of deposit insurance in the euro zone? Second, deposits include the savings of honest people who have paid their taxes and saved for retirement, to buy a home, educate their children or whatever. Why pay a hefty additional tax? And how would these people feel when they woke up on Saturday morning to be told, “Sorry guys, we are not letting you withdraw your money anymore, until we sort out how to take a big chunk away from you.” And why? Because two banks out of the tens operating in Cyprus made bad investment decisions three years ago to help Greece out of its crisis, and got hit by the troika. What’s the incentive that banks now have in the European Union to treat risky investments with caution? If one of them takes bad risks the others will pay for it; if it works well for it, it will keep the profits. A classic scenario for market breakdown.
Remember how Mr. Miyagi taught The Karate Kid how to fight? Wax on/Wax off. Paint the fence. Don’t forget to breathe. A coach is the coach because he knows what the student needs to do to advance. A big problem for coaches is that the most precocious students also (naturally) think they know what they need to learn.
If Mr. Miyagi told Daniel that he needed endless repetition of certain specific hand movements to learn karate, Daniel would have rebelled and demanded to learn more and advance more quickly. Mr. Miyagi used ambiguity to evade conflict.
An artist with natural gift for expression needs to learn convention. But she may disagree with the teacher about how much time should be spent learning convention. If the teacher simply gives her exercises to do without explanation her decision to comply will be on the basis of an overall judgment of whether this teacher, on average, knows best. To instead say “You must learn conventions, here are some exercises for that” runs the risk that the student moderates the exercises in line with her own judgment about the importance of convention.
David Pogue’ followers have been worried about e-book resales and their impact on authors. I also offered my speculations on the same topic. Pogue went to the trouble of looking at the patents and finds:
[The] patents also give the publisher or bookstore the right to impose a minimum price for reselling an e-book. That limit could drop over time, as Apple’s patent makes clear: “As another example, all digital movies must be sold for a minimum of $10 until six months after their respective original purchase date. After the six month period, all digital movies must be sold for a minimum of $5.”
Both proposals suggest that publishers could also limit the number of times a digital item can be resold: “A threshold may limit how many times a used digital object may be permissibly moved to another personalized data store, how many downloads (if any) may occur before transfer is restricted, etc.,” says Amazon’s patent. “These thresholds help to maintain scarcity of digital objects in the marketplace.”
It would be fun research project to work out the optimal scheme: how many new e-books should be produced each period, how should they be priced, how should the “second-hand” e-books be priced etc. Might be easy in the full commitment case. The limited commitment case might be more fun….
this a screenshot, from a few minutes ago (ed: last week), of bwin.com. the bets here are on goals in regular time of the barcelona-milan to be played in a little while. barcelona lost 2-0 in milan so barcelona needs at least 2 goals to force extra-time/penalty kicks. this is for the champions league.
as you can see from the screenshot barcelona winning 1-0 pays 10, 2-0 pays 7.5, 3-0 pays 8.75, while 4-0 pays 12.
what can we learn from this non-monotonicity? gamblers anticipate that barcelona’s extra incentives to score the 2-0 goal make it a more likely event than the 1-0 result (even though they have to score an extra goal!). once they have scored the 2-0, those extra incentives vanish so we are back to the intuition that a result with more goals is less likely.
How could this effect play out in real time? Here’s a model. It takes effort to increase the probability of scoring a goal. An immediate implication is that if the score is 0-0 with little time left, Barcelona will stop spending effort and the game will end 0-0. Too late in the game and it becomes so unlikely they can score two goals that the effort cost isn’t worth it. But if the score is 1-0 they will continue to spend effort beyond that point. So there is some interval near the end of the game where the conditional probability of scoring a goal is positive if the score is 1-0 but close to zero if the score is 0-0.
I would be interested in seeing some numbers calibrated to generated the betting odds above. We need three parameters. The first two are the probability of scoring a goal in a given minute of game time when Barcelona spends effort, and when it does not. The second is Barcelona’s rate of substitution between effort and win-probability. This could be expressed as follows. Over the course of a minute of play what is the minimum increase in win probability that would give Barcelona sufficient incentive to spend effort. These three parameters will determine when Barcelona stops spending effort in the 1-0 versus 0-0 scenarios and given this will then determine the probabilities of 1-0, 2-0, 3-0 etc. scores.
We have a visitor this weekend so we did the obligatory trip to Millenium Park, took pictures under the Bean etc. It was freezing cold so we only lasted half an hour before heading to Nellcôte for brunch – I hung tough under pressure to go to Big Bowl. But by the end of the meal, my initially reluctant companions agreed Nellcôte was a big success.
You are greeted with the highbrow (Sunday NYT) and the lowbrow (US Weekly). At least when we went, the room was not super full so you could easily have a conversation. The restaurant is named after the French villa where the Stones partied while they recorded Exile on Main Street. Somehow the decor manages to pull off that kind of ambience despite (because of ?) having Anthropologie style sofas and armchairs arrayed in the lounge area. Most of the food was good – the lobster hash, sunnyside up egg pizza, and whole wheat pancakes received rave reviews. Only the french toast got any criticism whatsoever – it was considered to be if anything too sweet and desserty. But, for me, the thing that tipped the whole experience over the top was the plate of cheese, salami, home made jams, brioche, fresh madeleines etc that they bring to the table while you read decide whether Charlize Theron or Kim Kardashian looked better in the yellow dress they both happened to wear (Charlize in my opinion).
I resigned as Editor of BEJTE last month, along with the other Editors. The journal was sold by Aaron Edlin to DeGruyter Publishing. Speaking for myself, there were two issues:
1. Commitment to open access: Initially, DeGruyter were going to charge for articles and access. We thought we convinced them that this would be a terrible idea, especially as BePress was a pioneer in open access publishing. And we joined as Editors in the old model. I showed the DeGruyter people the Theoretical Economics webpage. Editors at other BePress journals resigned when initially DeGruyter stuck to its guns with a policy of charging for articles. This seemed to move them towards our position. However, the journal webpage still confusingly quotes prices for individual purchase while having a link to Free “Trial” Access. Why is there a link for purchase if the journal is open access? Why the world “Trial” if the journal is committed to open access? So, the message to us was confused.
2. Execution: Along with the transfer of ownership came a transfer of software. BePress actually had quite good software. DeGruyter switched to software sold by Thomson Reuters (perhaps the same software as used by AER, but I am not sure?). They hired just two guys to manage the transition. They were totally overwhelmed. Emails went unanswered. Authors were confused. The software screwed up submission and resubmission of articles so there were constant emails from exasperated authors. There was no intellectual work and all the work was operational, helping DeGruyter fix its problems.
These two problems led to our resignations last month. Although we are still listed as Editors, we have in fact resigned.
Ely (n.)The first, tiniest inkling you get that something, somewhere, has gone terribly wrong.
That’s from The Meaning of Liff, a dictionary of should-be words written by Douglas Adams and John Lloyd. It was published 30 years ago this week and Heski Bar-Isaac points me to this very fun discussion of the words and the book from the BBC. You should especially listen to Stephen Pinker’s thoughts on Liff which comes at about the 15:30 mark.
In late January, Amazon received a patent to set up an exchange for all sorts of digital material. The retailer would presumably earn a commission on each transaction, and consumers would surely see lower prices.
But a shudder went through publishers and media companies. Those who produce content might see their work devalued, just as they did when Amazon began selling secondhand books 13 years ago. The price on the Internet for many used books these days is a penny.
On Thursday, the United States Patent and Trademark Office published Apple’s application for its own patent for a digital marketplace. Apple’s application outlines a system for allowing users to sell or give e-books, music, movies and software to each other by transferring files rather than reproducing them. Such a system would permit only one user to have a copy at any one time.
Meanwhile, a New York court is poised to rule on whether a start-up that created a way for people to buy and sell iTunes songs is breaking copyright law. A victory for the company would mean that consumers would not need either Apple’s or Amazon’s exchange to resell their digital items. Electronic bazaars would spring up instantly.
In principle, a resale market is good for the orignal seller. A buyer is willing to pay more to buy the product in the first place if he can recoup some of the cost by reselling the product later on. If the original seller can design the resale market, setting the terms of trade and the quantity traded, the resale market has to increase profits. The main difficulty is that the current owners of e-books say will compete with the original seller for new business. But if the price of resale and perhaps even the quantity is set by the original seller, the competition can be controlled while increasing revenue.
The main problems come with the inability to control the resale market. Today’s ebook buyers compete with the original seller. Ebooks do not depreciate so there is no vertical product differentiation. Price competition will be intense. This reduces the profits the original buyers can make from resale and thus also the higher price the original seller can charge. The original seller also faces competition from the books she sold in the past and this reduces her profits. But then how are authors or publishers going to make any money?
One other solution relies on commitment – the commitment to sell very few books. In the first period, very few Grishams are produced and a commitment is made that no more will ever be produced. Anyone who wants to read it will have to buy one from the lucky people who currently own one. The resale market will sustain high prices and the author will be able to charge a high price for the first editions. Grisham ebooks will be proudly displayed like Picassos. The Koch brothers mansions will each have a Kindle room with readers nailed to the wall. Paul Ryan will be able to walk up, switch it on and see a Grisham flicker up on the screen. Authors and publishers will boast of the price they got at auction not the millions sold in the first few months.
Or, of course, it will be impossible to commit, particularly when the cost of production is zero. Grisham will be forced to tour as relentlessly as Miley Cyrus, reading out unreleased short stories to rapt audiences of deeply unfulfilled practising lawyers.
Many laws that restrict freedoms are effectively substitutes for private contracts. In a frictionless world we wouldn’t need those laws because every subset of individuals could sign private contracts to decide efficiently what the laws decide bluntly and uniformly. But given transaction costs and bargaining inefficiencies those blunt laws are the best we can do.
Some people might want to sign contracts that constrain themselves. For example I might know that I am tempted to drink too many Big Gulps and I might want to contract with every potential supplier of large sugary drinks, getting them to agree never to sell them to me even if I ask for it. But this kind of contract is plagued not only by the transaction costs and bargaining inefficiencies that justify many existing planks in the social contract, but in addition a new friction: these contracts are simply not enforceable.
Because even with such a contract in place, when I actually am tempted to buy a Slurpee, it will be in the interest of both me and my Slurpee supplier to nullify the contract. (It doesn’t solve the problem to structure the contract so that I have to pay 7-11 if I buy a Slurpee from them. If that contract works then I don’t buy the Slurpee and 7-11 would be willing to agree to sign a second contract that nullifies the first one in order to sell me a Slurpee.)
These considerations alone don’t imply that it would be socially efficient to substitute a blanket ban on large sugary drinks for the unenforceable contracts. But what they do imply is that it would be efficient for the courts to recognize such a ban if a large enough segment of the population wants it. (And this is no way intended to suggest that one Michael Bloomberg by himself constitutes a large enough segment of the population.)
“It’s disturbing because I don’t know what it means about whether they could look at my own e-mail,” said Oliver Hart, an economics professor. “We need to have a discussion and a better understanding of the policy.”
He and other professors said the searches would prompt him to conduct more business through private e-mail accounts outside of Harvard’s reach.
If one activity is being monitored by the Principal, then the Agent switches to another one. The only problem is that Google looks at the other one.
There’s someone you want to hook up with. How do you find out if the attraction is mutual while avoiding the risk of rejection? That is simply not possible no matter how sophisticated a mechanism you use. Because in order for the mechanism to determine whether the attraction is mutual you must communicate your desire to hook up but she’s not that into you, well you are going to be rejected.
But rejection per se is not the real risk. Because if she rejects you without ever actually knowing it, you will be disappointed but you won’t be embarrassed. The real cost of rejection comes only when rejection is common knowledge between the rejector and the rejected.
So to design a mechanism that maximizes the number of hookups you need to give people maximal incentives to reveal whom they want to hook up with and to do that you need to insure them against common-knowledge rejections.
And that’s where Bang With Friends comes in.
Bang With Friends is a Facebook app, coded by a few college kids in a weekend, that facilitates no-risk hookups with people on your friends list. You say you’d like to bang them, and no one ever knows, unless they happen to say that they’d like to bang you, too.
Now this indeed takes care of one side of the incentive problem, but I worry about the other side. Suppose I want to know who wants to bang with me even if I don’t have the same lust for them. I can find out by putting all of my friends on my Down To Bang list. The only cost I pay for this information is that all of those who are down to bang with me will be told that I am down to bang with them. In some cases this could be lead to some embarrassment and awkwardness but I imagine some people would pay that price just to find out. And anticipating this possibility everyone is again reluctant to be truthful about who they do want to Bang for fear of being caught out this way.
One way to mitigate the problem is to replace the flat list with a ranking of your friends from most to least Bang-able, and then establish a hookup only with the friend who is highest on your ranking among those who want to Bang back. Then if you do decide to pad your list, you will put the reconnaissance Bangage low on your list. Of course this will allow you to find out those friends who put you highest on their ranking, but at least this is less information than you can get with the existing system.
The Walt Disney Co. recently announced its intention to “evolve” the experience of its theme park guests with the ultimate goal of giving everyone an RFID-enabled bracelet to transform their every move through the company’s parks and hotels into a steady stream of information for the company’s databases.
…Tracking the flow through the parks will come next. Right now, the park prints out pieces of paper called “FastPasses” to let people get reservations to ride. The wristbands and golden orbs will replace these slips of paper and most of everything else. Every reservation, every purchase, every ride on Dumbo, and maybe every step is waiting to be noticed, recorded, and stored away in a vast database. If you add up the movements and actions, it’s easy to imagine leaving a trail of hundreds of thousands of bytes of data after just one day in the park. That’s a rack of terabyte drives just to record this.
Theory question: Suppose Disney develops a more efficient rationing system than the current one with queues and then adjusts the price to enter the park optimally. In the end will your waiting time go up or down?
Eartip: Drew Conway
The new standard, which was agreed to at a meeting of the International Air Transport Association in October, will allow airlines to ask customers searching for airfares through travel agents or Web sites to first provide their names, frequent flier numbers, contact details and other information before presenting them with prices. A few airlines are expected to test this approach this year, and it could be widely adopted in a few years, according to the trade group. A majority of the group’s 240 members, which include most American airlines though not Southwest, voted for the standard.
Industry officials say the standard, which they call “new distribution capability,” is simply a way for airlines to better tailor their services to the needs of their customers. For instance, an airline might offer a package that includes free checked baggage, an aisle seat and a 10 percent discount to frequent fliers. And customers would be able to compare competing bundles from different airlines. They also say customers will still have the option of shopping anonymously for basic fares if they choose not to provide any information about themselves.
Thank God for Southwest.
Mutually Assured Destruction did not succeed in bringing the Democrats and the Republicans back to bargaining table to renegotiate the sequester. So, a reporter facetiously suggests locking up everyone in a room till an agreement is reached.
This is not so facetious as it seems – the sequester was meant to create agreement because the spending cuts were a hostage that no-one wanted to lose. Schelling thought about this sort of thing but the obvious reference is Oliver Williamson’s “Using Hostages to Support Exchange”. So, let’s go the whole way and think about who we would have to hold hostage to give good incentives for Congress to renegotiate the sequester. We would have to have one Democrat and one Republican to give both sides a hostage to release.
First off, John Boehner is not a good candidate for the Republican hostage. The real sequester leaves the Republicans divided – the defense hawks hate it but the deficit hawks want it. Similarly, a significant fraction of the Republican House caucus would just love to leave Boehner hostage. They are not going to negotiate a grand bargain to get him out. Extrapolating this logic to the Democrats, it is pretty clear Hillary Clinton would be a great hostage – all the Democrats would want to release her. This intuition further suggests Hillary will be great candidate in 2016, should she want to run. She would unify Democrats behind her and is a centrist so she would be a good candidate in the general election. My intuition is that Biden does not generate the same enthusiasm for hostage release.
So who is a good Republican hostage? Reagan, if he were still around, would be great. Who is today’s Reagan? Let’s face it, Jeb Bush does not inspire – Republicans would leave him hostage to get a good deal to free Hillary. Ditto Chris Christie. Rubio? Ryan? If Rubio were left hostage, the Republican Party would not lose a “thought leader” as we say in b school. They could pretty much survive without him intellectually. McCain is a leader on immigration reform, Rubio’s key issue. Sure, they lose diversity but not leadership. Ryan on the other hand is a leader when it comes to fiscal matters. No-one is the House can take his place and the Senate budget experts may have expert opinions but lack charisma (e.g. Portman).
So, Ryan should be the Republican hostage and he should be locked up with Hillary Clinton until a “grand bargain” is reached.
Arthur Robson wrote this on Facebook:
If am peacefully working out, and someone else arrives in the gym, they usually grab the TV remote to bathe in the inane chatter of preternaturally perky news shows. What if I were to arrive while they were watching TV and switched it off?
Which is a good point but still I think that a case can be made that it is morally allowed to turn on the TV but not to turn it off.
If you walk into the gym and the TV is on, that fact is a strong signal that somebody is watching it and would be harmed if you turned it off. On the other hand when the TV is off you have much less information about what people are paying attention to. You only know that nobody turned the TV on. This is consistent with everybody being indifferent to the TV being on and off.
The point being that a utilitarian calculation based only on the signal of whether the TV is on or off will always make it strictly more permissible to turn the TV on than to turn it off.
But note that the inference is a function of the moral code. And if people are following the turn-on-but-not-off code then the TV will be on even if nobody is watching it.
So what we need is an equilibrium code: a code that works even in equilbirium when it is expected to be followed by others.
Congratulations to our colleague Aviv Nevo on his appointment to this position which Thomson-Reuters says will make him the top non-lawyer at the Department of Justice (there’s a joke in there somewhere).
Aviv joined our department the same year I rejoined and we both wanted the same office. Highest seniority in our department determines priority for choosing offices and to break the tie there was a coin toss. I was in Boston and couldn’t actually witness the coin toss but they tell me I lost.
So Aviv got the office, but he also got seniority which means he is in line to be chairman before me. I am sure he will be back with us in time to take his turn.
Imagine a genie which randomly imposes across-the-board budget cuts unless Congress votes to stop them before they happen. This would be a good genie.
Its easy to blame the other side for not coming to an agreement. The genie’s cuts will happen because both sides will blame the other for not reaching an agreement to stop them. This is different than proposing and approving of cuts yourself because you would get the blame for that.
And of course a random genie is blameless.
It’s not a first-best genie. The cuts are random and across the board. But because of the asymmetry of blame they wouldn’t happen otherwise.
Sadly its not even a real genie so the cuts never happen. But Congress and President Obama have now learned how to replicate the genie: impose the cuts on a future congress. From the point of view of the future congress the previous congress is essentially a random genie.
The previous congress, not being an actual genie, nevertheless avoids blame because everyone expects the next Congress to do the sane thing and replace the sequester with something sensible.
All we can hope now is that the current Congress looks at this sequester “debacle” and concludes that in order to make it work as intended the next time the threatened cuts have to be even bigger.
One at a time, 30 men and 30 women entered the simulator and strapped on a set of goggles that transported them into a digital cityscape. A woman’s voice then explained their mission: A diabetic child is stranded somewhere in the city, and you must find him and deliver an insulin injection.
With a whoosh of air, the subjects left the ground – either controlling their flight by a series of arm motions, like Superman, or as a passenger in a helicopter. As they scoured the city, wall-mounted speakers gave the impression of wind whistling by; powerful speakers in the floor produced vibrations to simulate riding in a helicopter. The experiment was set so that two minutes into the simulation, no matter what mode of transport, the subject found the sick child.
After removing the virtual reality goggles, each person then sat with an experimenter to answer a few questions about the experience. This questionnaire, however, was a ruse: During the interview, the experimenter would “accidentally” knock over a cup filled with 15 pens. She would wait five seconds to see if the subject would help her pick them up, and then begin collecting the pens, one pen per second, to give the person another opportunity to come to her aid.
The people who had just flown as Superman were quick to lend a hand, beginning to pick up the pens within three seconds. The helicopter group, however, picked up the first pen, on average, after six seconds (one second after the experimenter began picking them up herself).
The superhero group not only pitched in first, they also picked up about 15 percent more pens on average. While everyone who flew like Superman picked up some pens, six participants who rode in the helicopter failed to offer any help at all.
So, video games where you play the superhero help you behave like a superhero. I’m off to play Zelda for the next couple of hours. Then, I’ll go to work and see if I am (even) nicer to everyone than I am normally.