Rather than an elasticity explanation I would suggest a two part
tarriff. The initial charge grabs the consumer surplus, MC is close to
zero for soft drinks (mostly water) so p=MC is optimal. Fabio's real
question, however, is why do some restaurants choose one policy and
others another. This
Pierre writes:
"I am not sure I understand why, with DNA technology, it can be that
Y'X."
For essentially the reasons Chris notes. Take the simplest case.
You think no innocents ever get on death row. DNA evidence shows that
this view is false. You now know that some innocents get on
FYI,
Two new journals will beginning publishing in the autumn, (cribbed
from the August 5th Economist p.69). The will be published
electronically and will offer 8 week turnaround times. Each journal
will publish papers in four classes, gold, silver, bronze and standard.
Gold is AER
Bill,
Putting aside interpretative issues, it seems that the model you
ascribe to Harris is not very plausible as it implies a radical
disconnect between child and parent culture. As I read you, you suggest
child culture passes down from child generation to child generation and
parents
I am giving a talk today in which I point out that virtually every
moral theory implies open borders are moral and immigration controls
immoral. Here are the theories I deal with.
1) Natural Rights ala Nozick, Rand etc.
2) Utilitarianism
3) Contemporary redistribute the wealth liberalism
List regulars may recall a side discussion that occurred some time ago
on the possibility that polio vaccination loosed the AIDS epidemic on
the world. As Robin pointed out the case is made in a big book by
Edward Hooper. As I mentioned then, some samples of the oral polio
vaccine from
Let me second Bill's point. It's because decision heuristics are
usually so useful that we can be lulled into following them when doing
so is downright irrational!
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA,
Lawrence Summers and Brad De Long, among many others, are arguing
that the productivity/investment/high-tech boom of the mid to late
1990's was caused by Clinton's reduction of the deficit. Summers and De
Long basically argue that *all* of the deficit reduction went into
investment. Neither
Amazon has backed down on its "price discrimination" scheme (and made
thousands of dollars in refunds) discussed here earlier. Price
discrimination in quotes because according to Amazon they were merely
offering different prices on a random basis to figure out the profit
maximizing point.
In the presidential debates the other night, Harry Browne, the
libertarian candidate (did you think I would waste my time watching Bush
and Gore?), said that the way a free society would handle war is to
offer a prize to the person or persons who assassinated the leader(s) of
the opposing
Bill,
Regarding looking at the ballots, remember there are two issues of concern, the
supposedly large number of Buchanan votes and the double-punched ballot - the latter
has nothing to do with the former (i.e. the double-punched ballots are spoiled and do
not contribute to Buchanan's
Alex,
The real meaning of Arrow's theorem is that group choice is not *at
all* like individual choice. You are correct that the theorem states
that only a dictatorial choice function is consistent with Arrow's list
of assumptions such as IIA. But the point is that when you abandon
these
Of the studies on the web page I noted this is by far the best and most
comprehensive
http://elections.fas.harvard.edu/
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
http://www.lasvegassun.com/sunbin/stories/archives/2000/nov/10/511018638.html
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Email: [EMAIL PROTECTED]
Bill,
I thought the recount that had been done so far was a machine
recount in all of the counties - thus only yesterday was the last of the
67 counties reported. My understanding is that the hand recount in the
four counties you mention has yet to be done and may not ever be done if
Harris
I do not want to get into a debate on the morality of patents - there
is plenty of that in the Armchair archive. On the economics here are
some notes and references written for another purpose which may be of
interest.
Patents can *reduce* investment in RD in *theory* as well as in
Bill,
As I read Landsburg the Klenow-Bils idea is that if at time 1 the
rich own 100% more microwaves than the poor at a 25% higher price then
at time 2 when the poor own 100% more microwaves than at time 1 the
quality-adjusted price (unobserved) has fallen 25%. What they need to
assume is
In response to Ray,
Non-working women are likely to have husbands who earn more than the
husbands of working women (all else equal) - this says the probability
of a woman working increases with a *decrease* in *husband* income. But
the finding is that the probability of a woman working
Robin,
Note that you can't be better off "refinancing" since your payments
continue to be $7000 a year - thus consumption never rises and your
puzzle must involve an illusion! So where is it? Run your example in
reverse. You borrow $70,000 at 10% paying $7000 per year forever. The
What do you mean by "gauge for" international trade? (By the way, if
you have read Krugman, Obstfeld, Appleyard etc. you are unlikely to get
a better answer here but it will help if you make the question clearer.)
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The
RE our discussion on the mails the post office has hired Fed Ex.
http://www.washingtonpost.com/wp-dyn/articles/A43459-2001Jan10.html
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX:
Fabio,
The situation in CA is, as I understand it, as follows.
Wholesale electricity was sort of deregulated (more on the sort of
later) but price caps remain at the retail level. Currently, wholesale
electricity prices have soared and the two largest utilities PGE and
So.Cal Edison
Fabio,
It's difficult to build a power plant in CA for the same that gas
prices are higher here than anywhere else (special processing and
additives are required in CA fuel) and you can't bring in a car from
another state without it passing special CA tests, i.e. CA has long been
hostile to
Bryan,
You don't need altruism to get a crowding-out effect if people are
initially contributing towards the public good as part of a Nash
equilibrium. In the Nash Equilibrium people contribute to the public
good but less than the optimum amount (the case where people contribute
nothing is
Wei wrote "Reading Jonathan Rauch's _Government's End: Why Washington
Stopped
Working_ (http://www.amazon.com/exec/obidos/ASIN/1891620495) made me
wonder how special-interest lobbies solved the public goods problem."
See Mancur Olson's The Logic of Collective Action and The Rise and Fall
of
A recent article in the NYTimes raises some interesting issues in
monetary economics. (Might be fun for class discussion.) The article
has been emailed to this list under separate title.
--
Provincial governments in Argentina are short of pesos so they are
paying their workers in
Marc,
Look at Kelvin Lancaster's old book Consumer demand; a new
approach also do a search on econlit looking for product
characteristics and demand, you should come up with quite a bit of
recent material. I have also seen the Dixit-Stiglitz utility function
adapted for this purpose,
When a good is made illegal consumers react by squeezing more consumption into a
shorter period of time in order to minimize the chances of getting caught per unit of
pleasure. Thus, it is a common observation that adults drink more often than
teenagers but
in less quantity (Thus, I have
The San Francisco Chronicle reports today that there was an
unusually large number of puts placed on United and American airline
stock in the day before the terrorist attacks.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/09/18/MN63703.DTL
Apparently, strong-form efficient market
The President has authorized some 15 billion dollars to bail out the
airlines and now travel agents and a host of others are asking for help
also. Question: Is there any economic defense for this sort of action?
After all, if the demand for air travel has fallen then isn't the
optimal
Bryan Caplan wrote:
A lot of Soviet citizens, similarly, (retrospectively) claimed they were
happiest during World War II, when something like 1-out-of-8 perished!
Selection bias!
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Brian,
The first idea that Since they won't be living in the places more
than 5 or 10 years they don't care if the place is ugly to most people
or shoddily constructed. This leaves the rest of the population with
only ugly and shoddy houses to choose from when they eventually need to
move.
if you are interested in
teaching economics at the undergraduate level, going into policy work,
or working for government.
Alex Tabarrok
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568
Holding spending constant, it is certainly true that some taxes are
better for growth than other taxes. To summarize a large literature
taxes on capital tend to be very bad for growth because of positive
externalities associated with capital, taxes on income are better and
something like a
I've often made the point that the main benefit of subsidies for
renewable energy sources is to increase price competition on OPEC
thereby resulting in lower oil prices and greater oil consumption. I
like the irony.
More generally, the economics of subsidizing a substitute for a
Here is a chunk of William Saletan's analysis from Slate, It is very
supportive of Fabio's tipping interpretation.
http://slate.msn.com/?id=2058705
Alex
In the north, the Taliban's enemies failed to advance. In the south,
they failed to speak up. The American press suggested that the war had
Hello? If the history of the twentieth century is not an undeniable
argument against the hypothesis that the market for social science is
not efficient then what is?
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA,
Sorry, double negatives confuse me. I mean of course that the history of
the twentieth century (Marxist-Leinism, communism, fascism etc.) is an
argument against the efficiency of the market in social science.
alex
Alex Tabarrok wrote:
Hello? If the history of the twentieth century
Why not deny the empirical fact - given all we have for data is a
second-hand report about a newspaper column! Indeed, the ease with
which the clever people on this list are able to generate explanations
that go either way seems to me to be a bad sign for evolutionary
psychology.
Alex
--
Dr.
Stiglitz would have liked to get the prize for the Modigliani-Miller
theorem but that one was already taken.
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Email: [EMAIL
Speaking of prizes, Cato has just announced a biennial Milton
Friedman Prize for the Advancement of Liberty. The award will be a cash
prize of $500,000 to one individual for significant achievement in the
advancement of liberty. The first prize will be presented May 9, 2002.
Any
*Warning* the following message contains shameless promotion.
Milton Friedman, Armien Alchian and William Baumol recently blurbed
a book that I edited that is forthcoming on Oxford University Press
called Entrepreneurial Economics: Bright Ideas from the Dismal Science.
I would like to say
I think Robin exaggerates the extent to which social science would be
easier if we could just ask people why they do things. To be sure,
there is a tradition in economics that survey results about intentions
and ideas (as opposed to age and income!) are not to be trusted. I agree
this
Anyone see survivor last night? When asked to pick a number between 1
and 1000 (presumably the closest number to the one in the questioner's
head would win her vote) the first contestant chose 3 and the second
chose 886! Incredibly poor strategy on both contestants part especially
when a
Here is another reason, that just occured to me, why survey
questions may not help us as much as we would like even on those
questions where they are relevant. In economics we are typically
interested in what matters at the margin and this may be difficult to
discover in a survey question.
Sure, if you take your own pictures you get the negatives. But if you
hire a profesional photographer for say a wedding or if you have a
portrait done they are insistent on keeping the negatives.
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
Tbe adverse selection story, really a price discrimination story,
assumes monopoly power in the photography market. But there is free
entry into photography and hundreds of photographers easily available in
the phone book thus price should fall to MC which implies that
photographers should be
this number and send
me back the factors - if the factorization took even a few micro-seconds that
would not be an issue for non-spammers but would shut spammers down.
Alex Tabarrok
You can find lots of data on life-expectancy and health broken down by
age, race, hispanic origin and much else at tbe National Center for
Health Statistics
http://www.cdc.gov/nchs/about.htm
after a quick search, however, I couldn't find anything on country of
birth, let alone age of
for Valentines or something like
that.) This sort of waiting seems much more amenable to a Becker type
explanation involving non-linearities and prestige factors.
Alex Tabarrok
Every major religion supports organ donation.
Alex
of the best pieces on pricing organs.
Alex Tabarrok
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Email: [EMAIL PROTECTED]
The organ shortage issue can be broken down and analyzed from a
number of different perspectives. My view is that the key issue is
*not* the supply of organs per-se but rather the *supply of people who
sign their organ donor cards*. Take care of this and the other problems
are of
Concerning Robin's point about the details of the relative coonsumption
models, Steven Landsburg made the same point in a review of one of
Frank's books in The Independent Review
http://www.independent.org/tii/content/pubs/review/TIR42Landsberg.html
Here are a few excerpts
But
Campaign financing regulations inevitably protect incumbents -
incumbents already have huge advantages so challengers need relatively
more money to compete, thus campaign finance laws raise rival's costs.
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent
(In response to Gustavo)
The real problem is not how to get money out of politics but how to get
politics out of money.
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Fabio mentioned the long string of unprofitable airlines in an
earlier post. The Feb. 17, 2002 NYTimes Magazine had a good piece by
Rich Lowenstein this. Among others, the following points caught my eye:
One reason the major airlines find themselves in this predicament is
that they use huge
Gustavo wrote Let's assume for a minute that: (A1) It costs the
manufacturer the same $8 000 to produce 1 long-lived car as it costs
them to produce 1 short-lived car.
(A2)...Since the manufacturers' profit per unit is more or less
proportional to the
cost of production (call this
Yes, in 1968 the exchange closed on Wednesday's in order to deal with
backlog. French and Roll (1986) find that variance of stock returns on
days when the market is closed is much lower than on days when the
market is open which suggests that trading itself, rather than say
information
Robin Hanson wrote:
Alex Tabarrok wrote:
Yes, in 1968 the exchange closed on Wednesday's in order to deal with
backlog. French and Roll (1986) find that variance of stock returns on
days when the market is closed is much lower than on days when the
market is open which suggests
There are actually two issues 1) Is the market efficient? and 2) Can
someone, using public information, systematically earn higher returns
than those on a suitably risk-adjusted market basket?
These issues are related but they are not the same. If the market
is efficient the answer to
Most observers have always been very surprised that there never was a
big demand for socialism in the United States - even at the height of
the depression. The New Deal was very much driven by the Executive
branch not by Congress - thus I think things could have been quite
different had
Jason wrote This could (and in my observation does) mean that
non-academics jobs are looking for other characteristics that are hard
to test for- good people skills and leadership ability.
Yes, as I tell my children, Son, don't worry about those grades -
even a C student can become President
The real problem with grade inflation is not the reduction in
information that might be used by employers. As with regular inflation,
the real problem is that grade inflation is not uniform - some
departments and some professors are more subject to inflation than
others. In particular, grade
In response to Fabio's comments: If you just start by saying what's
the optimal number of math or english PhDs then obviously you are going
to get nowhere. A better procedure, however, is to say that the current
situation is non-optimal if it is based upon arbitrary factors.
In
This came across my desk - I thought others might be also interested.
Alex
UNSELFISH CAPITALISM
Capitalism has been criticized for centuries for its single-
minded pursuit of self-interest. It is often claimed that
pastoral and agrarian societies foster social cooperation and
sharing, while
Hi Bryan,
Thanks for your hospitality. I regret that we did not have the opportunity to
speak more but time had to be allotted to the big wigs. Most important
benefit of being at GMU I did not know before the trip? All economist DD game -
excellent!
Cheers
Alex
I am a dunce and I have inadvertently given Bryan's secret away. I promise, however,
not to reveal the names of the other participants (especially if they
send me large wads of cash - you know who you are.) My apologies to all.
Alex
Alex Tabarrok wrote:
Hi Bryan,
Thanks for your
This came across my desk today, thought others might be interested.
Alex
FREE-MARKET ECONOMY ON CORAL REEFS
Market forces appear to be at work on coral reefs, where fish
that perform a cleaning service risk losing customers if they get
sloppy. Scientists studying these fish conclude that
In the Austrian economics tradition the point of the argument has always
been that indifference is impossible to observe in action. Choice
always implies ranking - thus indifference curves are verbotten.
See Bryan's SEJ article for a critique. Note that the Austrians,
i.e. those who take
Bill notes that prior to deregulation In flight meals were more
substantial and more frequent. Ticket lines were shorter for coach
passengers. Major airline employees were more polite. There were lots of
give always (decks of cards, airline pins, etc.) Flight attendants with
time on their hands
In addition to Robin's comments I found the motivating factor of Frey's
paper to be weak. I take it that his main complaint is that referee's
force authors to prostitute themselves by making changes the authors
think are wrong.
I personally have never experienced this problem and I would
I said I happen to think that much of what the profession demands is
unnecessary,
boring, absurd, and counter-productive but what has this to do with the
way journals are refereed?
Pete responded Well, that is the question isn't it?
Yes, it is the question that Frey doesn't answer.
Pete writes
Robin probably regrets using the word cheap in regard to entry as
this has clearly confused some people. As Robin later pointed out he
meant cheap to mean the journal industry approximates the economic
concept of free entry (more than many other industries we all think of
as
Here is a nice application/proof of Brouwer's Theorem in one
dimension from Mark Rubinstein's page
http://www.in-the-money.com/
which has some other nice material as well.
--
One morning, exactly at sunrise, a Buddhist monk began to climb a tall
mountain. The narrow path, no more than a
Double entry accounting makes it very difficult to hide losses and
massively inflate your profits...wait, that can't be right, scratch
that. I don't know.
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel.
Economist's have long puzzled over why tickets for almost sure to
sell-out concerts aren't sold for more and similarly why amusement parks
don't congestion price their attractions.
Yet, at long last, concert promoters have started to do exactly
this. Prime tickets for the recent Rolling
The industrial organization textbook by Carlton and Perloff is good on
issues of price discrimination, quantity discounts etc.
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX:
Italy's restrictions on firing employee's are so bad that a bank was
prevented from firing a money launderer and it are so entrenched that
recent attempts to reform the system have led to the assasination of the
reformers. See Alan Krueger's piece
Ken Rogoff has written a stinging and very funny rebuke of Joe Stiglitz
and his new book. It's not the sort of thing you see very often.
http://www.imf.org/external/np/vc/2002/070202.htm
Brad DeLong's comments on the book are also devastating.
Yes, I believe that the majority of the American public supports
farm subsidies. The rational ignorance assumption fails to explain this
- it's not like the information that governments spends billions on the
farmers is hard to find.
Some combination of Bryan's rational irrationality
us a much better understanding of social change.
Alex
Gray, Lynn wrote:
The implication that those who believe in the historical accuracy of the
Bible are ignorant was inappropriate, Alex.
Lynn
-Original Message-
From: Alex Tabarrok [mailto:[EMAIL PROTECTED]]
Sent: Wednesday
Fred Foldvary wrote:
...if the typical American favors subsidies to sugar farmers and
does not mind if the domestic price is over twice the world price, and does
not care much if candy-making jobs are moving to Canada, why do sugar farmers
contribute funds to candidates if the representatives
Yes, this is precisely my point.
Alex
Michael Etchison wrote:
Alex Tabarrok:
The evidence is even stronger in other fields that information per-se
often does not change people's minds. . . .
If information doesn't change people's minds - what does?
You do notice, I trust, that just
Tom Grey wrote
Further, I derive support for this from limited thought experiments:
Society A: more Atheist,
Society B: more Bible Believing.
In which society do I expect more fraud? more cheating spouses
promiscuity? more theft? more murder?
Well, even without empirical support, I
The best text is Jeffrey Wooldridge's Introductory Econometrics: A
Modern Approach. Supplement with Peter Kennedy's A Guide to
Econometrics (a must have.)
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel.
Here is an interesting plan to get out of NYCs transitional gain trap
regarding taxi medallions. Basically the author suggests buying out the
current medallion holders and selling taxi-cab licenses on an open
basis. I think his numbers don't add up but this might make an
interesting
Bryan Caplan wrote:
If a majority of NYers
seriously wanted free entry in cabs, wouldn't it happen regardless of
the opinions of cab companies?
Bryan is gently pointing out that my assumptions may be inconsistent
with my earlier posts on democracy. Nevermind, I contain multitudes.
It
Charles Lave of UC Irvine has done a lot of work on the economics of
speed limits - he had an AER paper a few years ago. I doubt that there
is much of an environmental effect - the main environmental effect is
due to congestion not speed limits.
Alex Tabarrok
It's a good idea. Not much exists yet but Robert Shiller has been
actively promoting similar ideas for some time. A good introduction is
his paper with co-authors in the volume I edited called Entrepreneurial
Economics: Bright Ideas from the Dismal Science, see
This is a multi-part message in MIME format.
I think that today there is a unified macro (Bill recognized that saying
there wasn't was going out on a limb). Macro is now in a period of
normal science. The profession has decided that the corect way to do
macro is using a stochastic dynamic general equilibrium model. Some
people include
I will be giving a 15-20 minute talk to a bunch of journalists and
proto-journalists ( most of them are editors of student university
newspapers) about what economics has to offer journalism. I am
interested in the suggestions of list members as to what the most
important lessons economics
The public good story is also inconsistent with public opinion polls
which show that the public always think the foreign aid budget is too
*large*. If the public good story were true people would be clamoring
for collective action.
Alex
--
Alexander Tabarrok
Department of Economics, MSN 1D3
Sure, the flaw is that this argument would imply that you hold the money
forever.
Alex
--
Alexander Tabarrok
Department of Economics, MSN 1D3
George Mason University
Fairfax, VA, 22030
Tel. 703-993-2314
Web Page: http://mason.gmu.edu/~atabarro/
and
Director of Research
The Independent
The idea, called regulatory capture is associated with George
Stigler. Posner's paper Theories of Economic Regulation, Richard
Posner, Bell Journal of Economics and management science, Vol. 5, No. 2,
pp.
335-358, 1974. brought the idea ought very clearly as I recall but I am
not aware of that
Regarding the economic return to beauty this newspaper cite suggests a
link through health.
http://news.bbc.co.uk/2/hi/health/2943464.stm
...
Researchers in Spain have found that men who are regarded as attractive
by women are also more fertile.
Their sperm move faster and are generally
Eric has me as being nicer than I actually am. I would give up a leg to
cure AIDS. For SARS I would take a kick in the leg.
Alex
--
Alexander Tabarrok
Department of Economics, MSN 1D3
George Mason University
Fairfax, VA, 22030
Tel. 703-993-2314
Web Page: http://mason.gmu.edu/~atabarro/
Michael Kinsley has an interesting piece in Slate today.
http://slate.msn.com/id/2084315/
It's about the Patriot Act and other so-called security measures and
whether they infringe on our liberties. He concludes that so-far the
infringement has not been so bad but there is potential danger in
Well, the average American is not so pro-freedom as, say, Walter Williams,
but considerably more so than the average Frenchman or German.
Really? How do you measure this?
The remarkable fact is that it is apparently perfectly legal for the government in the United States to control the price
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