I think you should read Manski's "College Choice in America", perhaps
the definitive study done on how people choose their colleges.
Manski and Weiss show that most people try to attend cheap and local
schools which means that most schools are non-competitive in admissions. I
think he estimated
Unless I am really wrong, the SAT used to be an absolute score, with
each wrong answer costing you 10 or 20 points, and 1600 being a perfect
exam.
--
Prof. Bryan Caplan [EMAIL PROTECTED]
I think that Bryan is almost correct. Old SAT used to be
a sort of
1) Has the invention of the xerox machine suppressed book prices
by offering a cheap (illegal) substitute for new books?
2) If so, any empirical data? How much woul a book cost in a world
with no easy copying?
3) Have tape decks, CD burners, etc suppressed music CD prices
in a simialr fashion?
Good points, but let me point out that copying is a good substitute
for short, expensive books such as many kinds of technical books.
Maybe for most books, copies are a bad choice.
I suppose that the bigger the book, the less useful it is.
-f
I'm not sure that copying is a cheap subsitute for
Medved has previously argued in his 1992 book:
"the typical "PG" film generates nearly three times the revenue of the
typical R" bloodbath or shocker, then the industry's insistence on
cranking out more than four times as many "R" titles must be seen as an
irrational and irresponsible
Observation: Competitive chess players often use clocks to ration time.
Seems logical - conserve your time for important or difficult move.
Straight forward budget constraint.
Question: Chess players often use the "touch rule" - you touch
a piece, you move it. Is there any economic motivation
Here some cute numbers
Title Amazon.com sales Rank Approx Price
The Communist Manifesto 3,955 $5
The Road to Serfdom 866$8
Wealth of Nations 1,782 $9
Essential Works of Lenin 40,222
So, are professors really underpaid? (if such statement makes any sense at
all).
I recommend that you read chapter 5 of Stinchcombe's "Information
and Organizations." That chapter is all about universities. One
good observation (not unique to Stinchcombe) is that US universities
seem to be
Once again, it goes back to supply and demand. People with good
writing skills seem to be more numerous than those that can teach
math. Thus, the price of writers should (and is) lower than
mathematicians.
-fabio
Are Humanities less real skills that, let's say, maths or economics? If
Business schools have been criticized for being pure credentialing
agencies. The New York Time ran an article today about how consulting
firms are hiring non-MBA's. usually people with graduate degrees
in any field. In house studies show that MBA do just as well
as non-MBAs.
The article is:
Any guesses on the econ nobel prize this year?
-fabio
Chris, could you summarize the alleged deficiencies of the Bell Curve?
-fabio
On Thu, 26 Oct 2000, Chris Auld wrote:
journal, for very good reasons. I'd put the Bell Curve in the bottom
5% of the distribution of published empirical work in economics. And
I'm probably being far too
Observation: Many colleges in the pre-civil war era attracted donations
from abolitionists because they offered a place where abolitionists
could argue their case freely. In other words, many colleges were
paid forums for the abolitionist movement.
Question: Could we use charitable donations to
On Mon, 4 Dec 2000, Robin Hanson wrote:
But I have often wondered if we could measure willingness to pay
for various freedoms, perhaps by just directly asking people.
I think we already have one good measure: the amount of donations to
organizations dedicated to free speech such as the ACLU.
On Tue, 5 Dec 2000, Yann Le Du wrote:
Doesn't the _existence_ of the rule participate in changing the way the
people "think the chances are that the government would actually try to
stop them" ? I think there's a retroaction process there.
You might think so, but for the longest time in
A friend of mine noticed that men tend to carry rather large
amounts of change in their pockets compare to women.
Any economic explanation of why this is?
-fabio
Last summer, I argued with a friend over the privatization of the postal
service. He said that the postal service already did a good job as
one could ask for. A bystander opined that without market forces, how
could one really know if a job was done efficiently or not?
With the postal service,
Good point, Alex. I think I like the medieval example because it's
a little more shocking - the US Post does about the same job as
private postal carriers in the Dark Ages.
-fabio
You don't have to go back that far. The Pony Express had speeds
comparable to today's US Post Office on
I was reading Braudel's text and he said that for each leg of a journey
(12-18 miles) the courier would charge 1 ducat. Thus trans mediterranean
letters could cost an entire year's pay.
-fabio
Why do airline firms exist?
Seriously, given the unpredictable nature of the airline industry such
as disasters, bad weather, labor strikes and regulation you would
think almost no one could survive in such a wacky business environment.
I know that some firms tend to make profits (like
Alex,
Here is a follow up question: why did California state regulators
forbid or discourage all the practices (extra plants, buying futures,etc)
that would help stabilize the power supply?
Fabio
A new graduate student in my department told me that at Beijing
University, econ undergraduates are not taught Keynesian economics -
they get a good dose of Marxism and then they get hooked up with
monetarism!!
Can anybody else verify this? Is China liberalized enough so that
students are
Question: What would controlling for racial composition do to these
results? Clearly there is high collinearity between race and latitude,
though modern transportation is weakening the connection. If you do
both latitude and racial composition, what would happen? Does anyone
have hard
I should also note that this has happened in computer science
dpeartments as well, for almost identical reasons.
-fabio
1. any takers on why?
How about learning? Younger people, by definition have less experience/
knowledge. they probably have less emotional control than older
people.
2. is a forbidden fruit argument consistent with economic rationality?
Depends on definition of economic rationality. if
Why does Rent to Own exist? Isn't rent to own just a way of
lending money to the customer (like many auto firms)?
One friend said it was a way of selling to people whose religion
precludes the paying or charging of interest.
Any comments?
Fabio
I just looked on the internet and it is often the case the rent-to-own
contract frequently includes a clause stating that the owner
pays for repairs. The same web page listed an advantage of RTO
was that it allowed people with little cash for a down payment
to buy pricy items like home
Of course, Bill, the right thing to do would be to state some
odds and place a bet.
Fabio
On Thu, 20 Sep 2001, Bill Dickens wrote:
As Fall approaches one of the interesting rituals involves the selection of
Nobel Laureates. While I'm not a legitimate bookie, I do engage in some
innocuous
Other nobel prizes have been awarded to individuals that weren't
formally trained. Some literature winners were not fiction writers,
a recent physics went to an engineer and medicine/physiology often
goes to non-MD biologists. If people started thinking contribution
to economic thought, then we
Couldn't one argue that airlines are similar to roads, telephones
and other services necessary for a modern economy? Thus, the gov't
might be justified in maintaining transportation in order
to promote more general well being. You then sacrifice short
term optima for long term benefits.
Fabio
An article in the LA Times discusses how high levels of stress
change hormonal balances in the body causing, ahem, sexual arousal
during times of stress.
I can easily imagine a similar effect for just plain happiness.
Fabio
On Mon, 1 Oct 2001, Robin Hanson wrote:
The Washington Post had
A lot of firms have been using the attack as an excuse... somehow,
terrorists have even inhibited the buying of guitars since
The Guitar Center announced potential losses blamed on the attack!
Seriously, there may be some truth to things. A business on the
brink of bankrupcy depends on the
I greatly appreciate the opportunity to read attachments sent
by armchair list members, but I humbly request that armchair
subscribers *not* send large documents. Rather, please
include a URL so that I can download the document to my desktop.
Otherwise, it must go through my e-mail account,
I am not an economist, but I do happen to know a fair amount
about graduate school (I've been in two and my dissertation is
on higher education):
1) Unless you have a good reason, go to the best/highest prestige
school that will accept you. Why? Prestige/repuation tends
to correlate with things
Not as much as you think. Of course, if you go to a completely
unchallenging school your chance for a top grad school will drop.
But grad school committees have pretty good information on their
hands when it comes to econ: math grades, math GRE, econ subject GRE.
They also have letters of rec.
Armchair game theory: Does anybody here think that the war
in Afghanistan can be characterized as a tipping game?
Conscripted Taliban soldiers and residents of Taliban
controlled areas could either support the Taliban or not,
and are waiting for somebody else to move first. The first
victory
I'll rephrase what Sherwin Rosen said in some speeches and
articles before his death. He argued that Austrian economics
includes a number of ideas, which have varying degrees of
acceptance in the market place of ideas. The subjective theory
of value is accepted by most economists as are other
Mike Kinsey on Slate notes that KMart employees are now allowed to
haggle over prices. He notes that with the Internet, merchants
can instantaneously raise or lower prices to meet demand instead of
industrial revolution style fixed prices.
I've posted once or twice about haggling and standard
Don't you think there is a difference between efficiency in the
intellectual arena and truth? I think that intellectual
institutions are fairly good at allocating resources to
efficiently produce normal science - ie, science that
refines and explores a given view of the world.
Truth may require
I've read that the Academy tends to clump together Nobelists
by topic - the game theory year of Selten, HArsanyi and Nash, for
example. Maybe somebody would take it personally, but they shoudln't.
Fabio
On Wed, 10 Oct 2001, Bryan Caplan wrote:
In a way, isn't dividing the prize 3 ways a
My guess: Thomas Szasz. I really have no idea if he deserves
it because I have no notion of what the criteria are but I do know
that he's recieved quite a few awards fro the libt'rn crowd.
Facetious guess: Bill Gates!
Fabio
On Wed, 10 Oct 2001, Alex Tabarrok wrote:
Speaking of prizes,
Have you considered that the author is my friend may have some
information in it? For example, if Robert Reisch endorsed a book,
you could reasonably conclude that Robert Reisch is the author's
friend and that his friends tend to be liberals with a certain
slant. It wouldn't signal the quality
Why is local news done by television stations when most other
local programming (soap operas, game shows, talk shows) is contracted
out? Or to phrase the question differently: why do local tv stations
do *any* of their programming?
Fabio
I think the median voter has the following preferences concerning
adoption: same race parents parents different race no adoption.
Bryan's point is that adoption workers seem to prefer:
same race parents no adoption parents different race.
The MVT would predict otherwise. I claim that
fabio guillermo rojas wrote:
I don't think you should focus so much on the median voter theorem.
The logic of median voter theorems is that politicians offer
policies that closely resemble the median voter's desires. This assumes
that politicians have direct influence over
You are misinterpreting the function of these little issues.
Little issues don't build up. Little issues tend to be signals to
certain constituencies. For example, nobody has ever lost the vote due to
rap music, but Clinton in 1992 signalled to many in the democratic party
that he wouldn't be
Build-up has two meanings in this context. 1)Politicians could
send a series of signals to win small groups of voters. 2) Politicians
could send a series of signals to large group of voters who need
repeated re-assurances that the politician really means what he
says. Ie, build up of votes vs.
When faxes were invented, people got pissed off when their valuable fax
line was used by unsolicited advertisements. Thus, in many places fax spam
is now a legal offense punishable by a large fine for each unwanted faxed
message.
Ie, the conflict was resolvd simply by having the practice
Are you sure this is what happened? I'd guess that the woman
expected a range of price, and was shocked when when she found
out the drink was $13.
(1) Where else do people buy things without knowing the price first?
(I've been thinking and have been unable to come up with any examples.)
Actually, I've dealt with this situation and it's quite different than
the drink at a bar. When you hire a (decent) carpenter, they will
tell you what additional labor cost, should it be required. A reputable
contractor will have this written out before hand, and you will
have signed an
be informative for decisions. Anyone want to give odds that I'll be
able to keep the term meaning what I want it to mean? :-)
According to Stigler (the statistician, not the economist) almost
every named scientific term is in error. So I'd say the odds
are huge that your name will be
I understand that some toll roads charge more during rush hour.
It's not as sensitive a mechanism as Fred suggested, but it's
not bad. Fabio
I was looking for, but such a system would be hard to implement. Can you
think of an existing analogous system in a similar market?
Would there be a
This week's Economist magazine reported an experiment where subjects
could pay to decrease the income of other subjects in the experiment,
which they did with some frequency, although it didn't increase their
income from the experiment. The article's author suggest that this
was evidence for
Maybe the real puzzle is under what conditions do people maximize
rank or total stuff. F
It doesn't have to be complicated, but it does have to be specific.
A business trying to maximize market share is pretty specific, though
with multiple product lines and sets of consumers there remains
Hypothesis: John McCain. Campaing reform has been a favorite to talk
about but not to pass for many years. I think that when you had
a charismatic cadidate adopt an issue, it can really change things.
I bet a lot of congressmen saw little John McCains in their night mares
if they opposed campign
Why do older executives desire MBA's or B-school Ph.D.'s? They don't
need to signal brains because they have a track record, and they
won't learn much useful stuff. It can't terribly useful credential
when you are in mid or late career. Any takes? or is this just
consumption on the part of
Talking about game theory movies - does anyone remember if the
game depicted in Beuatiful Mind accurately capture the Nash eq?
Fabio
David Fincher's new movie *Panic Room* may be the finest artistic
expression of game theory around. Beautiful illustrations of commitment
problems, subgame
orientation. Thus, as we become wealthier as a society, we are more able
to support children who pursue such uselss topics at the graduate
level.
Why, this could mean that the wealthy feel some sort of urge to preserve
civilization!
Michael
You are a very deluded person if you think
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
2) To attract good thinkers to become historians,
schools must keep the wage high enough to compete with other
disciplines and occupations that require intelligence. Therefore,
I think this is a big part of it. Compeitition to get into
the best humanities programs is as fierce as law
The effect of this is to draw students away from math, science and
economics and towards the softer social sciences. Similarly, within
departments students are drawn away from harder graders and towards
softer graders. Budgets go where students go! Thus grade inflation
causes a
Why don't you email Bryan Caplan, this list serve's moderator and founder?
He's published stuff on exactly these issues. Fabio Rojas
On Sat, 20 Apr 2002 [EMAIL PROTECTED] wrote:
Is there a website that might have data on the opinions of economists on general
questions like the role of
I recently visited a web page by a political scientist
that seemed to suggest that NAFTA was a failure. I'd
-jsh
Could you summarize the evidence he/she presents?
Fabio
Imagine that an alien arrives on planet earth and asks you what
is a market? What kind of economic system would count as a market?
I know this can be a sticky question, but how would you describe the
economy of Russia or China, and why doesn't it count as a market? Is it
just the lack of the
Plausible, but then the question is: *why* do people have a disutility
of paying for toilets? Does this fit into any pattern of the sorts
of things people have a disutility of paying for?
As noted earlier, people did pay for toilets before and it is common in
Europe. So it seems we are
Let me also add that the basic assumption of Frey's article is also
wrong - the assumption that editors slavishly follow referee's.
My take is that it's editors choose referees, so the editor's
really do choose the articles because they choose referees
and indirectly choose the outcomes.
Fabio
These are all good comments on the Republican reversal. Thus, I take it
that the list agrees that democracy works pretty well in reflecting the
wishes of the voters.
Alex
I'd say democracy reflects general trend in voter opinion pretty
well, although some policies may be way out of whack.
Double entry means that you have one column for money going out
of an account and one column for money going into an account. Thus,
it very easy to keep track of cash inflow and outflow (just add up
the columns). With single entry, there is more error because you
mistakenly count a debit as a
What's wrong with negative numbers?!
Prof. Bryan Caplan
Bryan - it's not mathematical. It's book keeping. Keeping the two
columns separate is simply easier for finding mistakes. With spreadsheets
its easy, but if its teh 13th century and all is done by
On Thu, 27 Jun 2002, William Dickens wrote:
Does anyone answering here know any accounting or are people just guessing?
Just enter double entry accounting into google and you can easily
find some answers. It hard for us modern people to understand, but
simply accounting techniques can make a
In any case, all of the deficiencies in children's brains you point out
more or less sound like extensions of their low absolute IQ.
Not really. One listed deficiency is memory. That might be correlated with
IQ, but it's certainly not the same as IQ. Analogy: a computer with a
small storage
Come on, Fab - pointing out examples of brain differences explaining
behavioral differences is hardly convincing evidence that brain
differences are the right explanation in this case.
My point is that behavior is more than cost-benefit calculations
with IQ as an intervening variable. My
If it is common knowledge that picking stocks is no better than
using an index, then why is stock picking so popular?
Ie, why do people accept lower returns just for the privilige of
picking the stocks themselves?
Fabio
In the real world we have almost 600 in Congress, dealing with
innumerable matters more or less simultaneously. One of the things each
CongressCritter does is to decide what to do not about, say, farm
subsidies generally, but about SB1234, sponsored by Sen. This and Sen.
That, which goes
When I play the prisoner's dilemma in class, I see very little cooperation.
I know one researcher who has repeated a trust game (not prisoner's
dilemma) with many classes of students and groups of business men.
He finds that students are remarkably untrustworthy and businessmen
tend to give
The part about students being socially isolated from each other and lacking
social experienceis interesting. Are there any studies that might confirm
this? I teach at a community college, so the students probabl mix with each
other less than they do at other colleges. If I recall
In other words, all of the main items in the budget are popular and
indeed if anything the public wants them to be larger. (Presumably views
Question: could public opinion be endogenous? Ie, maybe there might
be some status quo bias? Would people before the New Deal or the Great
Society have
Alternative hypothesis: people will accept money only if other people
are accepting money.
Fred - next weekend, I want you recruit a person who will get in line
before you. When you arrive, announce that you will give $20 to somebody
who will let you cut in line. That planted person will then
Is there really a transitional gains trap? If a majority of NYers
seriously wanted free entry in cabs, wouldn't it happen regardless of
the opinions of cab companies?
Prof. Bryan Caplan
Uh-oh. The Median Voter Theorem rears its ugly head again.
That makes sense for the cars all made by the same company, or which
share subcontractors. But Toyota, Honda, Subaru, and Ford all make cars
with virtually the same shape and layout.
Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu
Among management theory/organizational sociology
Or to rephrase in economic terms, risk averse managers prefer copying
a proven strategy (low risk/low payoff) than engaging in RD (high
payoff/high risk).
reduce drag coefficients to increase fuel economy. The summer I sold cars
(1997 at a Pontiac-Mazda-Jeep-Eagle dealer) one of the
Imagine that a nation like the US were run like a corporation. To live
How would you enforce shareholder rights and monitor managers? For
corporations inside nations, one could appeal to the state for law
enforcement or start a lawsuit. What recourse do shareholders have in
such a worlds?
Does anyone think, at least in the excerpts we read, that the article
attacked libertarian or libertarian-leaning economics as much as it attacked
economics generally?
David Levenstam
It's typical to say that bad science is X, and my political
opponents just happen to do X. IMO, it is
The real charlatans in academia are the many frauds who build
their whole careers by getting their names put on coauthored
papers to which they have not legitimately contributed.
That's a sort of embezzlement; but `charlatan' implies
that the *content* of the papers is fraudulent.
Anton
Are state-enforced lawsuits really what keeps large multinational
corporations honest now? If not, then the concept here is to use
mechanisms similar to whatever large corporations now use.
Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu
Multinationals come in different flavors.
But I do have a naive question: Is there a median
voter for each issue, so that if there n issues, there
can be up to n median voters? Or, is there only one
median voter who satisfies the vector median as I
described above? Can such a person be proven to
exist, sort of like a voter
Another MVT deviation:
Marijuana decriminalization
Fabio
Diego! Diego! The definitive source on outlandish, but possibly
true facts is the weekly Straight Dope Column in the Chicago
Reader, written by Cecil Adams. To sum up Cecil's column,
yes, there a few authenticated cases of feral children, but
most researchers doubt that any of these were raised
Seriously, why does tenure exist at all? I know the motivations
for tenure, but why isn't it competed away somehow? I would like
to know what economic process ensures its continued existence.
Fabio
raise. Government subsidies and private charity give universities the
cushion they need to avoid being put out of competition by
performance-oriented for-profits.
Prof. Bryan Caplan
While I share Bryan's skepticism, I don't buy his argument because
One possible explanation for tenure is that university departments
are to a large degree worker managed firms. One problem with a worker
David Friedman
David's explanations make sense, but I'm empirically skeptical on
two grounds:
(1) Why is it that only educational worker managed firms
It seems to me, that traffic school makes everybody out to be a greater
risk than their driving record indicates. If risk is a primary factor in
an insurance company's rate determination, doesn't that mean that
traffic school makes everybody's rates higher than they otherwise would
Be?
Anyone have any idea why the norm in economics allows referees so much
time to do a report? Why its so different from other fields? Is this one
of those soft vs. hard field things? Its my impression that the
physical science journals all want fast turn around on their referee
reports.
The data are average times (measured in months)
between initial submission and acceptance at various
economics journals in the year 1999.
It seems that the long times quoted in this article
are something different than what fabio was talking
about. I have not read the article but the
friend had a paper go three rounds at AER and that took 3 years. I
wouldn't be surprised if a lot of bad papers get rejected quickly and
that would bring down the average turn around time a lot.
That is indeed the case. Journals get many papers of low quality, and it's
easy to reject the bad
Occasionally, someone mentions the theory of teams. Can someone please
tell me what the economic theory of teams is?
Fabio
Having publications before you go on the market can make a very big
difference. At least 10 years ago very few people did and having
- - Bill Dickens
An article in the Journal of Human Resources about 10 years ago showed
that having 1 article had a big effect on landing a job, 2 articles a
I presume you mean irrationaly optimistic self-assesment? I'd say quite
a lot. But then comes the
hard question: what policy implications follow from this conclusion?
Yes, irrat self-assesment is a good word for it. Robin, I know you are a
fan of taxing people for not using their
How sticky is the price for university overhead? Fabio
On Wed, 4 Dec 2002, Rodney F Weiher wrote:
As a purchaser of university research, we often bargain with the PI on
overhead, who in turn must bargain with their administration.
Rodney Weiher
fabio guillermo rojas wrote:
Do
Question: At what can humans engage in economic behavior? Are there
studies showing when children learn to trade ?
Fabio
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