You are currently browsing jeff’s articles.
- Justice Stevens rules for the Earl of Oxford.
- What doesn’t taste good with bacon.
- In defense of puns.
The American Economic Association will begin awarding the Clark Medal every year rather than every other year as it has done since the prize was founded. Because the prize can be given only to an economist under 40, this raises the interesting question of who would have won in the off-years in the past had the prize always been annual. David Warsh comes up with a pretty good list.
Note that if it appears to you that the runners-up in recent years don’t match up to the heavyweight rejects from past years (Lucas, Tirole, etc.) keep in mind that the more time has passed the more hindsight plays a role. In 15 years time the true heavyweights of today will be revealed.
The Bad Plus is a unique piano trio that straddles jazz, rock, and classical and at their best combines all three. In their most recent album, For All I Care, they are joined by vocalist Wendy Lewis who sings on a number of rock covers. (Here was my review of the album.) Wendy Lewis is joining them on their current tour and Sandeep and I saw their Chicago show at the Old Town School of Folk Music on Friday 4/17 (the early show at 8PM.)
The show began with the trio alone playing some older tunes as well as the three classical pieces on For All I Care, Stravinsky’s Variation d’Appollon, Ligety’s Fem, and Semi-Simple Variations by Milton Babbitt. This was an enjoyable mini-set and worth the price of admission, although in my opinion the band was not in top form. The pianist Ethan Iverson was having somewhat of an off-night and failed to find the main groove on the improvised parts of “You Are” and “Dirty Blonde.” His trademark foundation-shifting flourishes lose their punch without a smooth and deliberate buildup from the point of departure. On the other hand, the classical pieces were all very tight and were the highlight of the show. There was one new tune, an Ethan Iverson composition entitled “Bill Hickman at Home.” This was a blues number with a very nice extended bass solo from Reid Anderson and some great playing from Iverson too.
Wendy Lewis joined halfway through the set and the band began with Lithium which also opens the album. She successfully navigated the tempo changes that add an additional slant to the Nirvana original and her usual flat delivery worked well in this tune as it did for Kurt Cobain. Up next was the Yes classic Long Distance Runaround, another very clever arrangement in which the jazzy instrumental part dissolves into a slow backdrop for Lewis’ powerful vocals. Unfortunately these were the last successful combinations until the fiery encore of Barracuda which was also the best tune on the album. The pretty chorus on Wilco’s Radio Cure could not recover from the dull, almost spoken-word delivery of the opening verses. (Fortunately, at the end of the song the trio left her behind with a searching group-improvisation that began with drummer Dave King mysteriously massaging his skins with his elbow, built up to Iverson’s hands flying all over the keyboard and finished with a very satisfied audience.)
The next tune, Blue Velvet (not on the album) was a puzzling choice. Wendy Lewis is a skillful vocalist and she can sing big on tunes like Barracuda, but her voice is not right for this song: too flat and emotionless. Finally, Comfortably Numb is one of the strong points of the album but on stage it was straightforward, uninspired rendition.
The Bad Plus are making some of the most innovative music in jazz today. They are to be commended for experimenting, however in my opinion this experiment did not pay off. I am looking forward to the next one.
You may have seen in the news that Ashton Kutcher was trying to sign up 1,000,000 Twitter followers and in order to make that goal he offered the 1,000,000th follower a copy of the game Guitar Hero. This is not a very good mechanism because the optimal strategy it induces is not to sign up (until 999,999 others do, which will not happen because they are also waiting.) Here is a story about the Kutcher mechanism. (thanks to Joe Spanier and Toomas Hinnosaar for the pointer.)
A better mechanism is the following. Set a deadline, say midnight. If at midnight there are fewer than 1,000,000 followers then each of the existing followers wins a prize and the prize that the nth follower wins is decreasing in n. Thus, the 1st follower gets a larger prize than the 2nd which is larger than the 3rd, etc. On the other hand, if before midnight the number of followers reaches 1,000,000, then give only the 1,000,000th follower a prize. And it can be a very small prize.
In this mechanism, there is no incentive to wait to sign up and as a result the goal is guaranteed to be reached and the beautiful twist is that the only prize given out is the small prize to the 1,000,00th.
Coincidentally, just last week (before the Kutcher thing) I played this game with my intermediate microeconomics students where my goal was to sign up 150 followers in 2 days. I offered prizes ranging from $40 for the first follower down to $10 for the 149th follower and $1 to the 150th follower if I made my goal. If you look at the sidebar to this blog (scroll down on the left) and click through to my twitter page, you can see how I did.
Ever notice that food tastes better when your spouse cooked it (controlling for talent of course)? Why do leftovers often taste better than when the food was fresh? I believe the same phenomenon explains both of these.
A large part of tasting is actually smelling. You can verify this by, for example, eating an onion with your nose plugged. Our sense of smell tends to filter out persistent smells after being exposed to them for awhile so that we cannot smell them anymore. This means that when you are cooking in the kitchen, surrounded by the aromas of your food, you are quickly de-sensitised to them. Then when you sit down to eat, it is like tasting without smelling.
When your spouse has done the cooking you were likely in another room, isolated from the aromas. When you walk into the kitchen to eat, you get to smell and taste the food at the same time. That’s why it tastes better to you. The same idea applies to leftovers. It takes much less time to reheat leftovers than it took to prepare the food in the first place so you retain sensitivity to more of the aromas when it comes time to eat.
I believe that when recipes direct you to “allow the food to rest so that the flavors can combine” what is really happening is that you are induced to leave the kitchen and return with a renewed sensitivity. This also explains why dinners which you spent all day preparing are often disappointments. And it implies that when you have guests over for dinner you should entertain them outside of the kitchen so that they will enjoy the food more when it is ready.
I lost count.
Presumably the copyeditor at MSNBC is soon to be out of a job (via the Browser.)
It may be the biggest moment “for potty parity that we have seen, to have two big facilities open at the same time, and all these restrooms open at once,” said Kathryn Anthony, a professor of architecture at the University of Illinois and a board member of the American Restroom Association.
The new Yankee Stadium and Mets’ ballpark will adhere to new laws in place in New York City requiring two women’s toilets for every one men’s toilet. Read about it here in the New York Times (via The Browser.) Empirically, a woman’s visit to the stall lasts twice as long as a man’s on average so the ordinance is intended to equalize waiting times for men and women. A few thoughts come to mind (double-entendres noted in parentheses).
- This will actually overshoot (!). The waiting times will be equalized only at times of peak demand when queuing occurs. If women have more stalls than men, they will queue less often. As a result average waiting times will be lower for women than for men.
- We should not be equating waiting times anyway, we should equate the marginal cost of an additional fixture relative to the resulting reduction in average waiting times. Urinals are cheaper than stalls.
- There is a moral hazard problem coupled with an externality that is not being taken into account. When queuing is a possibility, the patron trades-off the instantaneous urgency versus the alternative of waiting for off-peak moments, for example avoiding the seventh-inning stretch. If prices could be charged, Ramsey pricing would dictate that prices would be positive only at times of peak-load (!). This is to encourage the less urgent to wait for the off-peak reducing the externality imposed on others. When prices cannot be charged, some level of congestion will be part of a second-best (number two !) incentive instrument.
- In queuing problems in general, it is efficient to first serve those whose needs require the shortest use of the facility because they impose the least externality on others. This principle points toward disparity in favor of men.
- I hope they have looked into this.
Robert Akerlof, the son of Nobel Laureate economist George Akerlof, was on the economics PhD job market this year from Harvard. It raises the question of which academic disciplines are the most recurrent within families. I see two arguments about the heridity of economics.
On the positive side, economics is a language and framework for thinking about things that come up in everyday life. It will be more natural and common for an economist parent to explain economic concepts to their kids than it would be for parents in other disciplines, even other social sciences. On top of that, being an economist probably shapes one’s style of parenting more than being, say, a chemist does and so there is an additional, covert, channel of transmission.
On the negative side, I sometimes think that what inspires someone to go for a PhD in some discipline is when they discover that it allows them to organize and understand things in a new way. If a child is raised to think like an economist at an early age, they will never have this kind of revelatory moment and so may never feel drawn to economics as an academic discipline.
Finally, the question of heredity conditions on the child going to academia at all. It could be that having parents who are economists make you less likely to get any sort of advanced degree.
It would be interesting to see the data.
It is back. Production was legalized in the US in 2007 after being banned for nearly a century based on bogus claims of psychedelic properties. The marquee ingredient in absinthe is wormwood but it typically includes other herbs such as anise and fennel. Out of the bottle it is clear, but the spirit is prepared by dropping in a cube of sugar which then drives the herb particulates out of solution producing the famous green haze. It is usually then diluted with 3 to 5 parts water but it is also a key ingredient in some cocktails. The most famous is the Sazerac, a classic from New Orleans.
The last time I was in New Orleans, absinthe was not yet widely marketed and the Sazerac was still being made with the substitute spirit Herbsaint. Did you ever notice that Herbsaint is nearly an anagram for Absinthe? I don’t think its a coincidence. But I think they missed a big chance with Thesbian. Like Herbsaint, its not a word (clearly it should be) but its an exact anagram.
Here is a recipe for a sazerac from wikipedia:
One old fashioned glass is packed with ice. In a second old fashioned glass, a sugar cube and 3 dashes of Peychaud’s Bitters are muddled. The Rye Whiskey is then added to the sugar/Bitters mixture. The ice is emptied from the first old fashioned glass and the Absinthe is poured into the glass and swirled to coat the sides of the glass. Any excess Absinthe is discarded. The Rye-Sugar-Bitters mixture is then poured into the Absinthe coated glass and the glass is garnished with a lemon peel.
Here is Gary Vaynerchuck tasting and reviewing three absinthe brands.
On Friday the 13th of February, the City of Chicago saw the first of a planned series of parking meter rate hikes which will eventually quadruple the hourly parking rate in the downtown area. This is happening because last year the City of Chicago sold the cash flow from parking fees for approximately $1 billion to a private investment fund. (No doubt soon to be securitized and tranched into Meter-Backed Securities. Quick: tell me how to price CDS protection against the event that Daley renegs once the billion is spent.)
The deal enables Chicago Parking LLC to raise fees according to a set schedule over the next ten years. After that, further rate increases must be approved by the City Council. The contract expires in 75 years.
Why would the City go for such a deal? Yes it is starved for cash and parking meters currently hard-wired at 50 cents an hour in most of the city are long overdue for an uptick. But this just argues for a fee increase, it doesnt explain why the meters should be privatized.
The economics of privatization are straightforward in this case. The city seeks bids for the parking meter cash flow. A bidder offers an upfront payment and a schedule for price increases. The upfront payment will be no less than the present value of the cash flow as determined by the new prices. Competition will ensure that the payment will be exactly this cash flow. This means that the high bidder will be the one who demands a price that maximizes the present value of cash flows. In other words, the monopoly price.
Remember from your textbook microeconomics that the monopoly price is associated with inefficiently low quantity. Zero marginal cost doesnt make this any less damaging, in fact it implies that on many streets there will be empty spaces all day long. Cozy, inviting parking spaces will be utilized by nobody.
Again the city could set the monopoly price on its own, so we still have the puzzle of why, if the City is willing to allow monopoly pricing it has to use a private entity as its agent. The answer is not because the City wants its cash up front. Apparently it does want its cash up front but it could always just borrow against the parking cash flows.
The only answer I can come up with is a commitment problem. The City could certainly borrow against the cash flows and set the monopoly price but then the City itself would be the target of the uproar that will soon occur when drivers in the city realize that their cars are now worthless. The political pressure would force the fees to be kept low and the City would then have to find another way to finance its parking debt. In fact, foreseeing this, no lender would be willing to lend the full present value of monopoly cash flows.
By contractually delegating the fee-setting to a private agent, the City effectively commits never to lower fees so that the monopoly cash flow is guaranteed and the City can extract it all in an upfront payment.
From Coffee Culture, Jerry Baldwin’s blog at The Atlantic:
A few specialty roasters in the US have begun to experiment with putting robusta into their espresso blends. The typical reasons are to make it more like Italian blends or make a thicker crema. I do understand the preference for the texture of a good crema, but I don’t understand sacrificing flavor to achieve it.
whoa, I thought I was a coffee snob but I never would have thought to ask the robusta question. Wikipedia says this about robusta:
[Robusta] is easier to care for than the other major species of coffee, Coffea arabica, and, because of this, is cheaper to produce. Since arabica beans are considered superior, robusta is usually limited to lower grade coffee blends as a filler. It is however often included in instant coffee, and in espresso blends to promote the formation of “crema“. Robusta has about twice as much caffeine as arabica.
back to the Coffee Culture article:
Why try to make espresso “more Italian” when specialty roasters in Italy are either abandoning robusta completely or have developed 100 percent arabica blends at the top of their product range? Torrefazione Mexico in Milan, Illycaffe in Trieste, and Caffe Kimbo in Naples are just a few of countless roasters who are 100 percent arabica or, “prefer the excellence of a 100 % arabica blend,” as Kimbo says on its website. Even Lavazza, the Folgers of Italy, has 100 percent arabica blends that are at the high end of their offerings.
Lavazza: the Folgers of Italy. (cap tap: The Browser.)
I collect examples of Kludges. Luis Rayo has sent me a very nice one.
In mammals, for instance, the recurrent laryngeal nerve does not go directly from the cranium to the larynx, the way any competent engineer would have arranged it. Instead, it extends down the neck to the chest, loops around a lung ligament and then runs back up the neck to the larynx. In a giraffe, that means a 20-foot length of nerve where 1 foot would have done. If this is evidence of design, it would seem to be of the unintelligent variety.
Apparently, some evolutionary biologists take this to be evidence of our fish ancestry.
“The circuitous path of the left recurrent laryngeal nerve in humans is evidence for their evolution from a fishlike ancestor… because the nerve remained behind this arch but still connected to a structure on the neck, it was forced to evolve a pathway that travels down to the chest, loops around the aorta and the remnants of the sixth aortic arch, and then travels back up to the larynx. The indirect path does not reflect intelligent design but can be understood only as the product of our evolution from ancestors having very different bodies.”
The latter quote is from “Why Evolution is True” by Jerry A. Coyne.
Legalization of marijuana has gained some momentum recently in terms of conspicuous support in the press, expansion of medical marijuana freedoms, and relaxation of enforcement (see especially this article.) The argument is often made that the tremendous expense in terms of lives and money of the war on drugs does not justify whatever moral benefit there is of minimizing drug use.
But legalization would only make the drug war more costly. The reason is simple. Legalized pot does not reduce the incentive of government and its lobbyists to fight back the illegal market, in fact it only adds to that incentive.
The effort spent prosecuting the war on drugs is determined by a balance between the marginal cost of additional enforcement and the marginal benefit of reduced consumption. When pot is illegal, that marginal benefit comes from the (perceived by lobbyists) moral and cultural virtue. When pot is legal, the marginal cost of enforcement is the same but to the moral benefit would be added the financial stake in licensing legal producers and taxing consumption.
The government’s revenue from licensing and taxation of marijuana sales relies on foreclosing the black market which would not be subject to taxation and therefore would clear at a lower price. Government policy under legalized marijuana would be shaped by basic economics. The effort in fighting the black market imposes a cost on illicit producers which acts effectively as a tax. The level of that tax determines the market price in the black market and this is the maximum price that the legal market can sustain. If we start with the level of enforcement currently in place, this translates to a certain tax revenue that the government would earn were it to legalize pot and keep enforcement at its current level.
But raising the level of enforcement would allow the government to raise taxes on the legal trade. Since the marginal cost of enforcement was already equal to the marginal benefit based on moral considerations, the additional marginal benefit from increased taxes means that the government will increase enforcement.*
If you favor legalization of marijuana for libertarian reasons (or if you are just hoping for cheaper weed), you should instead push for a relaxation of enforcement without decriminalization (as the Obama administration is reportedly acquiescing to.) Decriminalization would give the create a vested interest in the drug war that would be hard to undo.
(*Theoretically, it is possible that, say, excise tax revenue would be increased by increasing consumption at the margin rather than decreasing. This would be true only if the current level of enforcement is already holding the black market price above the monopoly price. It is hard to believe that this is true today. )
I learned to juggle 3 balls when I was about 10. Its a great trick when you are 10 but it really comes in handy when you are a parent as endless entertainment for your kids. But now mine are getting bored and they are demanding 5 balls. Juggling 5 balls is pretty close to impossible. But with a little technology, learning to juggle 5 could be easy.
What I want is a ball that is sturdy enough for juggling but can be filled with helium in varying concentrations. Juggling a helium-filled ball would be something like juggling in low gravity. Which means the balls would fall slowly and 5 balls would be easy. With just the right concentration of helium, anyone could do it. Then, the helium concentration is gradually reduced. At each step, the difficulty increases just a little bit making it easier to master juggling the heavier and heavier balls. Finally, its all atmospheric air, and you are juggling 5 balls in no time.
This article doesn’t answer that question, but it does explain why scratching relieves the itch. Check it out (via MindHacks). Apparently scratching turns off activity in nerve cells, but somehow the nerve cells knew you were itchy because they do not shut off in response to a scratch when you are not itchy.
Did you know that just reading about itchiness can make you itchy? Did you scratch while reading this?
Can you resist an itch until it goes away? Try it! (Deep breathing seems to make it go away faster.)
April 10 (Bloomberg) — The U.S. Federal Reserve has told Goldman Sachs Group Inc., Citigroup Inc. and other banks to keep mum on the results of “stress tests” that will gauge their ability to weather the recession, people familiar with the matter said.
The Fed wants to ensure that the report cards don’t leak during earnings conference calls scheduled for this month. Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government’s plan to release the results in an orderly fashion later this month.
Assuminng the stress tests were done, there now exists hard evidence of which banks are healthy and which are not. There is no more cheap talk. And once non-cheap talking begins, there is no option to remain silent:
“If you allow banks to talk about it, people are just going to assume that the ones that don’t comment about it failed,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.
All information would be revealed before the actual results are. Instead, Treasury wants to control the revelation of information. What could it have in mind? Wouldn’t investors see through any scheme to manipulate expectations by picking the order in which information is revealed? And isn’t pooling the original problem stress tests were supposed to solve?
Addendum: Calculated Risk infers that there must be some very bad news for the banks behind this. I tend to agree. One scenario is that the failing banks will be disposed of before revealing any results.
Something I watched recently made me want to write on a topic that I have no interest in and only passing experience with, but which is intriguing once you think about it for a moment. I decided I would blog about the first such thing I could come up with. After thinking for more than a few moments the first thing I came up with fitting this description was:
Barbicide. It’s that blue liquid that every barber/hair salon uses to store combs and scissors, presumably to disinfect it in some way. Before reading that Wikipedia article, some obvious questions about Barbicide come to mind:
- Is there really no competition for Barbicide? How do they maintain their monopoly? There doesn’t seem to be a monopoly on the combs or the scissors, just the blue liquid that cleans them.
- Why always blue? Presumably it is some kind of branding. Does Barbicide have a patent/copyright on that particular shade of blue?
- The name suggests that it is a special chemical agent for killing some kind of mythical organism whose name has the root Barbi-. But I don’t believe that. In fact, I believe that Barbicide is just de-natured alcohol colored blue. But I must be wrong right?
- How often do you have to change a jar of Barbicide?
The wikipedia article didn’t answer many of these questions but it did say something about 3. In fact barbicide
… is a United States Environmental Protection Agency-approved hospital disinfectant. It is a germicide, pseudomonacide, fungicide, and viricide. In addition, it kills the HIV-1 virus (AIDS virus), Hepatitis B, and Hepatitis C.
And it raised new questions. Like, is it true as “Barbicide techinicians claim” that
it is the only disinfectant of its kind which holds its power and color over time; all of its competitors’ products eventually turn green or brown.
? That at least tells me that there are indeed competitors and presumably they are all blue (at first.) I checked the Barbicide Material Safety Data Sheet, a document prepared by OSHA and confirmed that alcohol is the primary active ingredient, although it also contains Dimethyl Benzyl Ammonium Chloride (DBAC), and Sodium Nitrite. I checked the Wikipedia page for DBAC and found some uninteresting (to me) facts like that it is a
nitrogenous cationic surface-acting agent belonging to the quaternary ammonium group
and some interesting facts like that it is toxic to fish. Apparently it is not patented. So Barbicide must be a patented formula combining these chemicals in some specific proportions with other, presumably blue, chemicals.
I went to the homepage for Barbicide. Did you know that a jar of Barbicide is in the permanent collection at the National Museum of American History at the Smithsonian Institution? Now you do. King Research, which produces Barbicide also makes other products, for example a drain cleaner that apparently excels at breaking down hair clogs. Natch.
I found this discussion forum where exactly my question 4 was raised and after many forum members professed ignorance, a call was placed directly to King Research who suggest replacing it every day, or when it gets cloudy. This surprised me because when you factor in the claims of the Barbicide technicians, it seems to suggest that the competitor’s product turns brown or green in less than a day. Well, no wonder they can’t compete.
Finally, I assumed that somewhere there must be a dark side to all of this, so I googled “Against Barbicide” and “Barbicide Controversies” and after many such attempts I finally came across the following transcript of a case from the Third Circuit Court of Appeal in which Barbicide was allegedly improperly used to sanitize a tub used in a pedicure:
Ms. Detraz demonstrated that Virgin Nails did not follow proper sanitization procedures when cleaning its equipment, specifically the pedicure tub in which Ms. Detraz immersed her feet and lower legs during the pedicure. Virgin Nails used Barbicide, a disinfectant, to clean the whirlpool tubs attached to the pedicure chairs.
So, I learned a lot and it is not all for naught. I think that I might actually have an interesting topic of conversation the next time I get my haircut.
In one study, college students were given one of two menus. One menu featured French fries, chicken nuggets and a baked potato; the other included those same items as well as a salad. The French fries, widely perceived as the least healthful option, were three times as popular with students selecting from the menu that had the salad as they were with the other group.
Its not clear from the article if they also ordered (or intended to order later) the salad (fedora flick: Lone Gunman.)
One of my favorite blogs, Mindhacks, has a post about perfectionism and depression. An article from the Boston Globe is quoted.
“Perfectionism is a phobia of mistake-making,” said Jeff Szymanski, executive director of the Obsessive Compulsive Foundation, which is based in Boston. “It is the feeling that ‘If I make a mistake, it will be catastrophic.’ ”
Striving for perfection is fine, said Smith College psychology professor Randy Frost, a leading researcher on perfectionism. The issue is how you interpret your own inevitable mistakes and failings. Do they make you feel bad about yourself in a global sense? Does a missed shot in tennis make you slam your racket to the ground? Do you think anything less than 100 percent might as well be zero?
I think this is a somewhat superficial interpretation of perfectionism. Its too easy to say that someone is a perfectionist because they are afraid of making mistakes. De Gustibus. I think the deeper source of perfectionism is more subtle and also easier to rehabilitate.
Ironically, perfectionists are not people who have high standards. Instead, I think a perfectionist is someone who doesn’t trust his own judgement. There is only one way to do something perfectly, but there are infintely many ways to do it imperfectly. Sacrificing perfection means making a decision about which imperfection to allow. So striving for perfection is just a cover for shrinking from decision.
On the other hand, people who are comfortable with imperfection are people who know what works. People who lack confidence in their judgement of what works insist on perfectionism because that covers all the bases. And these people never get the opportunity to learn what works because their perfectionism prevents them from experimenting.
Of course perfection is usually impossible but what happens in this case to the perfectionist is that their final product is what’s left when they give up rather than what they carefully planned. This usually doesn’t work and this further deteriorates the perfectionist’s confidence in his ability to do the second-best.
Smart classroom + YouTube + Golden Balls.
Golden balls indeed.
When my wife, a rational agent, is preparing to welcome our monthly visitor, she is confronted by a preliminary wave of unwelcome hormones. The proximate effect of these hormones is to make her a tad more grouchy than she normally is about otherwise mundane events. But because my wife is a rational agent, presumably she is able to forecast this effect and account for it. In other words, when she has the impulse to feel perturbed about some minor calamity she reasons that her impulse is likely an artificial response brought on by the fluctuating chemistry in her brain. And this reasoning would lead her to moderate her emotional response.
Indeed I have witnessed my dear wife execute exactly these calculations. When this happens, the household is always most appreciative. Sadly, it doesn’t always happen.
My theory therefore is that what is happening is not a uniform variation in the hormonal level, but rather a spike in hormonal volatility that forces my wife into a signal-extraction problem that is inherently prone to error. For example, when her absent-minded husband leaves the lights on in the kitchen and she detects, in response, an oncoming alteration in her mood, she must determine whether this minor offence is something she would ordinarily be upset about. My theory is that hormone volatility makes it hard to know exactly the current hormonal level and therefore difficult to back out the baseline appropriate degree of aggravation (in this case, i would argue, none at all.)
And thus hormones, an otherwise purely nominal variable, can have real (cyclical) effects.
Will Wilkinson smokes pot and he likes it. Bold. This does seem like the right time to go public, so here goes:
I practice yoga and I like it.
Economists have many repositories of data and we are relatively good at sharing data we find. So it is easy to find out what data is available. It is not easy to find out what data is not available. If somebody goes looking for the ideal dataset for some question and discovers that it is unavailable, that result should be made public so that others don’t have to duplicate their efforts.
So we need a repository of non-existent data.
We need a centralized market for matching co-authors. I want to be able to go there with an idea and find a co-author who has some expertise in the area. I guess there are some obvious difficulties. For one thing, the researcher with the idea would worry that his idea would get stolen if he went shopping it around publicly. Also, potential co-authors would have little incentive to invest in an idea brought to the market by someone else as it would be public knowledge who was the creative partner and who was the “research assistant.”
I suppose the second-best solution is a blog.
Uber-twitterer and oenephile of the Proletariat Gary Vaynerchuck has just signed a million dollar deal with Harper Studio who will publish 10 (!) books by the hitherto unpublished, self-proclaimed non-reader. As reported here (bowlerbow: EatMeDaily), this represents an experiment in the terms of book contracts by the fledgling division of Harper Collins which was built on the premise that contracts delivering massive advances to the author and retaining sales revenue for the publisher are no longer part of a viable business model.
Publishing contracts must solve a thorny bilateral incentive problem which arises as a result of the timing of investment by author and publisher. The author commits effort up front writing the book and then the publisher is expected to commit resources editing and marketing the completed manuscript. The problem is to provide incentives for one party without dampening the incentives for the other. The traditional advance/residuals contract solves this problem because the residuals give the publisher incentive to market the book and maximize sales leaving the advance as the compensation for the author. The accompanying shift of risk from author to publisher is efficient because the publisher handles many books simultaneously, effectively creating a diversified portfolio.
The book market has famously weakened and it is becoming rarer and rarer for sales to justify the large advances that were hallmarks of existing contracts. This means that a larger fraction of the author’s compensation must come directly out of book royalties, undermining the incentive and risk-shifting benefits of the old structure. To adapt, publishers are seeking authors who already have an established “platform” such as a blog or other online community. Such authors are less averse to residuals because their ready-made audience makes the prospect less risky. Vaynerchuck would appear to fit the bill perfectly. His video blog, winelibrarytv attracts more than 80,000 viewers per day and as of today he has 177,000 followers on Twitter.
But when authors receive a large share of sales revenue, how can publishers be motivated to do the footwork of marketing the book to generate those sales? To some extent an author with a platform can do his own marketing but if word of mouth were all that was required to turn a book into a hit, there would be no reason for the publisher in the first place. Here is where the second novelty in the Vaynerchuck deal comes in: the long-term relationship. The contract marries Vaynerchuck and HarperStudio for 10 books. If HarperStudio can make his first book into a hit, it makes Gary into a star and it stands to reap the benefits on not just the first book but the 9 more to come.
“On the back end” as Gary would put it.
If somebody looks better from the side than the front it is a good sign that they have a poorly calibrated self-image. Mirrors make it easy to manipulate the way we look from the front but it’s much harder to affect our appearance from the side.
For the game theorists in the room, the difference must boil down to whether we have random matching across populations (case 1) or within a single population (case 2.)
With zero government spending, billions of dollars of stimulus could be created by an act of congress
…if Congressional Democrats succeed in lifting export controls that classify satellite technology as weapons and have handicapped American manufacturers since the last days of the Clinton administration. House hearings on the controls are to begin Thursday. Proponents of change are optimistic, pointing to a campaign pledge by President Obama and the support of respected figures like Brent Scowcroft, national security adviser to Presidents Gerald R. Ford and George Bush.
See the article here. Of course there are many illegal markets that would generate stimulus were they to be legalized. Here are some of the big ones.
- Drugs
- Guns
- Prostitution (except in Nevada)
- Gay prostitution (even in Nevada)
- Gambling
- Trade with Cuba
- Liberalized immigration
Al Roth calls these repugnant transactions and discusses them frequently on his blog. The demand for stimulus means that the cost of being morally opposed to these transactions increases and the margin between what is repugnant and what is not slides outward. (Tyler Cowen worries half-seriously that economists are evil when they try to persuade others to think in these terms.)
Food for thought here is how these are ordered on the repugnance margin. If the motive is stimulus then what matters is not just how repugnant they are but how repugnant in proportion to the untapped economic activity that would be unleashed. My guess is by that measure the ranking is (from first to be embraced to last) 6>2>5>3>7>1>4.
I suspect that repugnance has a ratchet effect in that if, say, prostitution is embraced for pragmatic reasons such as stimulus, it will never return to repugnancy even when those pragmatic motives fade away.
Cheap Talk 