Re: paid parking a market failure?
Richard Arnott at Boston College has done a ton of work on modeling parking and solving parking problems. Those interested might wish to run a Google Scholar search on Arnott + parking. Regards, Eric Crampton
Re: Nobels
Remember that it's a fun-money market, so people's expressive preferences have free reign. I think it's exceedingly unlikely he'll be tapped given how political a choice he'd be about now; however, the same thing makes him pretty expressively appealing. Not that it's a bad thing to have expressive prefs running things here...I wouldn't have bought so much stock in Tullock if I were using my own money On Wed, 22 Sep 2004, Robert A. Book wrote: http://www.nobelpreisboerse.de/stocks.aspx?stc=6 A fun-money stock market in economics nobel prize winners. Barro's currently in the lead, followed by Krugman, Prescott, Williamson, and Fama. I'm keeping my fingers crossed that my stock in Tullock pays off Krugman? Egads --Robert
Re: Siberia and Canada
Mass migration would be incredibly unlikely in the short term. Too much Canadian nationalism. Longer term, though, increasing migration would put pressure on the Canadian govt to adopt more sensible policies to reduce outflow. At least that would be my guess. There are huge regional differences within Canada in income, and interregional migration just isn't all that strong. Migration is just massively sticky. Otherwise, Newfoundland would be empty by now. Income differences between Newfoundland and Alberta are about as big as between Canada and the US... On Thu, 8 Apr 2004, Bryan Caplan wrote: Can any Canada experts weigh in? That includes all Canadians. Eric? fabio guillermo rojas wrote: Yes - evidence: the population of Canada is highly clustered around the border. I have hunch they would bolt the second the border was opened. Fabio On Thu, 8 Apr 2004, Bryan Caplan wrote: Question: If there were free migration between the U.S. and Canada, would Canada lose a lot of population to California, Florida, and other more desirable locations? Prof. Bryan Caplan -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] I hope this has taught you kids a lesson: kids never learn. --Chief Wiggum, *The Simpsons*
Re: gold rush
What's it been doing against the Euro? $US has been taking a beating lately in general Eric On Thu, 2 Oct 2003, chris macrae wrote: What do you feel is the main reason why there has been such a steep rise in the price of gold in recent times? Chris Macrae
Re: Senators Denounce Policy Analysis Markets
All of the criticism seems based on the betting on events, not on the use of conditional markets for developing policy. Wonder what they'll say when they figure that bit out On Mon, 28 Jul 2003, Robin Hanson wrote: FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Family Businesses and Licensing
On Thu, 10 Jul 2003, John Perich wrote: In my informal experience, fathers and sons tend to work together full-time only in professions with strict licensing or training requirements. Electricians, lawyers, realtors and even CPAs - I've There are zero licensing requirements for farming. I'd lay even money that farming would be in the top 5 professions on a proportion of father-son teams scale. Eric
Re: Charity
On Wed, 4 Jun 2003, Jason DeBacker wrote: Is it not possible that there is some common goods problem? People not helping b/c they think others will? The general welfare of others is a public good afterall, right?- (non-rival, non-excludable) Exceedingly implausible in the Africa case. Only plausible if the amount of potential help exceeds potential need. Story works for why people don't give to the bum looking for money on the street; doesn't explain why people don't give to Africa.
Re: charity and time preference
Shouldn't we also worry about how poor people are now relative to how they'll be in the future? Today's poor are much better off than the poor from a century ago; presumably the poor a century from now will be less deserving than those of the present day? On Fri, 6 Jun 2003, Richard L. white wrote: On 6/5/03 11:22 PM, Wei Dai [EMAIL PROTECTED] wrote: Suppose I have some money that I don't want to spend, and I'm sure I'll never want to spend it. Should I give it to charity now, or put it in an index fund and bequeath it to charity in my will? Here's my argument in favor of charitable procrastination. The typical recipient of charity does not have access to the kind of investment opportunites (e.g., low cost U.S. mutual funds) that I have, and his other investment opportunities usually have a lower (perhaps even negative) rate of return. Charitable organizations are legally forced to spend a certain percentage of their assets per year, so they can't invest the money indefinitely either. By holding on to my money, I'm actually increasing the present value of the gift from the perspective of the recipient. Can anyone find a flaw in this argument? Ignoring the utility of the money to the target charity today, e.g., food or medicine to live, the money value of the PV should also be reduced by the tax benefit you have forgone by not making the donation today.
Re: Charity
On Tue, 3 Jun 2003, Jason DeBacker wrote: -- I listed as one possibility that people are ashamed to admit their preferences. I feel the same way as you do, but I am not sure all people think like that. Some probably actually care about saving lives instead of having HBO, but for some reason do not act on that preference- I don't know why, though. Expressive preferences diverge from revealed preferences. When the cost of having lofty ideals is nil, people will have them. When it comes down to the choice of saving a life versus having HBO, people pick HBO. Eric
Re: Charity
People give as much as they care to. To the extent that they give less than they'd claim they'd want to see given, it's because the former is a revealed preference and the latter is an expressive preference. There's only failure involved inasmuch as we let things be determined by expressive preferences (at the ballot box) rather than revealed preferences. Your imagination is clearly too limited if you can't imagine anyone who would baldly state that they prefer the cable TV. I certainly prefer spending my $67/mth on Dish Network top 100 plus HBOs plus locals plus built-in TIVO to sending the money off to save an arbitrarily large number of children in a foreign country. If I didn't have that rank ordering of preferences, I'd get rid of the Dish. Eric On Tue, 3 Jun 2003, Jason DeBacker wrote: Why don’t more people give more money to charity? If you asked someone if they would rather see $50 used to feed a child for a month or on another month cable TV (or whatever), I can’t imagine someone not saying that the child should be fed. But almost no one gives $50 a month to charity and many give that to watch cable television (or spend it on other “frivolous” purchases). Why does this happen? A few possible reasons: - The history of charitable money getting into the wrong hands has scared people from donating. - There is some kind of market failure (a la the story of the woman being attacked while the whole block watched and no one stopping it or calling the police). - People really don’t care about helping someone else, but are ashamed to admit that. - People just don’t think about donating. Regards, Jason DeBacker
Re: neutral taxation
On Sat, 18 Jan 2003, Fred Foldvary wrote: 2) The government does not know the economic rent among the basketball teams, but it does know that the next best opportunity if he does not play basketball is $100,000. The government taxes the income above $100,000 at, say, 90 percent, providing an incentive for the player to accept the best offer, but still taking most of the economic rent. Ummm...wouldn't we rather quickly see teams stop offering wages above $100K and offering in-kind benefits instead? Think about airline price regulation. Why wouldn't we see the same thing here? The player only has to value the benefits at x10% of their costs in order to prefer benefits to salary increases. Seems likely to be quite wasteful. How much government oversight are we going to need to prevent people from moving to provision of nonpecuniary benefits [or to value, price and tax such benefits]? Eric
Re: News Coverage and bad economics
Hilarious! I'd already killfiled AdmrlLocke, so I hadn't read his first message. Love your answer though. On Thu, 9 Jan 2003, John-Charles Bradbury wrote: If you already know the correct answers better than the professor why are you taking the class instead of teaching it? JC -Original Message- From: [EMAIL PROTECTED] [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, January 09, 2003 7:41 AM Subject: Re: News Coverage and bad economics Yes, indeed I was informed recently that I recieved an A- instead of an A in one of my PhD courses because I include too much historical content in my exam answers. I suppose there's no better way to protect faulty theory than to ignore the lessons of economic history. In a message dated 1/9/03 7:00:41 AM, [EMAIL PROTECTED] writes: Fred Foldvary a *crit : one is a better economist if one knows some law, history, geography, literature, political science, and philosophy. And besides his specialty, a good economist should know some history of thought, economic history, and something about the various schools of thought besides his own. True, but what do students in economics study all that? Too much maths usually divert students from all these topics : they just don't need all these to pass their exams. begin:vcard n:Girard;Bernard
Re: Cost vs. Price or Flatland
On Fri, 15 Nov 2002, john hull wrote: If someone is willing to make a bet with you, you should wonder if maybe she knows something you don't. If you really want to get paranoid about everything you do, read the lit on the Winner's Curse. In the limit, only the most overoptimistic of people bother getting out of bed in the morning : Eric
Re: Self-assessment vs. Rationality
On Mon, 11 Nov 2002, William Dickens wrote: concern to some decision problem. Rational expectations does require that ones forecast have minimum variance and not just that it is unbiased. However, money is still neutral in most RatX models even if Of course. Meant high in absolute terms, not that people should choose estimation/forecasting procedures that have higher variance than other available procedures.
Re: insuring against changes in home prices
On Wed, 30 Oct 2002, Cyril Morong wrote: I wonder if this will cause moral hazard, that people will not take care of their houses as well as they used to, lowering the value. Seems quite unlikely. The article says that it insures against a fall in the price of houses in your area, not against a fall in the price of your particular house. Eric Crampton Cyril Morong
Re: Return to Education and IV
On Fri, 25 Oct 2002, William Dickens wrote: continue schooling largely under weights the future benefits. Nearly everyone should get more schooling than they do. This is only one of Self-serving Eric, who hopes to be an econoimcs professor, couldn't agree more. Demand for college professors needs to go up. My other side couldn't disagree more strongly. A significant percentage of undergrads should really be in some kind of 2-year trade school instead. The marginal person should get less schooling. The person in the bottom quartile of an undergrad class would make more money by instead enrolling in community college and learning to be an electrician or a plumber. Of course, this is pure assertion and is backed by nothing more than my sense of the matter. Eric Crampton
Nobels
This is a rough look at which schools currently have Nobel prize winners on faculty. Do I have any of these wrong? Any additions that need to be made? If this is right, then GMU ties for the 5th highest number of Nobel winners. Eric -- Chicago: 6 Friedman, Coase, Becker, Fogel, Lucas, Heckman Berkeley: 3 Debreu, McFadden, Akerlof MIT: 3 Samuelson, Modigliani, Solow Stanford: 3 Scholes, Spence, Arrow George Mason: 2 Buchanan, Smith Princeton: 2Nash, Kahneman Cambridge:2 Sen, Mirrlees Columbia: 2 Mundell, Stiglitz Baruch, CUNY: 1 Markowitz Harvard Business School: 1 Merton Washington, St. Louis: 1 North Penn: 1 Klein
Re: The Dead Grandmother Syndrome
hilarious. Reminds me of the regression of # tatoos = alpha + B1 number of missing teeth. Was positive and significant. On Wed, 11 Sep 2002 [EMAIL PROTECTED] wrote: One of the best articles on statistics I've read. Includes an interesting slant on the need for divorce and remarriage to increase the number of available grandmothers. http://biology.ecsu.ctstateu.edu/People/ConnRev
Re: Charity and Races as Complements
On Mon, 9 Sep 2002, Robin Hanson wrote: Alex Tabarrok wrote: I agree with John's analysis of charity and signalling. I add only that a more plausible reason than the two that John gave for why people don't mow lawns is that lawn mowing is a private good and racing a public good. In other words, I can collect a donation from many people for racing but few people will pay me to mow my own lawn (or anyone else's)! Races are public goods?! How do I benefit if some other people run a race with each other? Is this just due to some externality that healthy people produce in general? If the argument is that the race generates publicity which generates more support for the cause, then racing is a public good (or bad, depending on the nature of the cause I suppose). Eric Crampton Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Median Voter vs. The Sub-optimal Equilibria
On Thu, 5 Sep 2002, Fred Foldvary wrote: First of all, the outcome is not necessarily known in advance. The outcome could be to not obtain the good. We don't know whether one will have to pay the $100. It doesn't matter whether he knows he has to pay or knows he doesn't or knows he has to pay with probability x. All that matters is that he views the payment as exogenous. As soon as it's exogenous, expressive preferences rule. Even when the outcome has a high probability, one does not necessarily get expressive benefit from agreeing with it. Suppose the issue is to spend an extra $10 billion in enforcing the drug laws. Those who disagree with this goal will express a value of zero. Certainly true. People can get expressive benefits from opposing a proposition rather than supporting it. Anti-abortion people get as strong of expressive benefits from registering their opposition to abortion as do pro-choice folks from supporting it. The stronger the beliefs, the higher the expressive preferences. Same for the drug laws. If the net values are fairly close to zero, a high stated value such as $5 million could well change the outcome. It seems to me your are setting up a case with a predetermined outcome, whereas in fact, social choices generally do not have such outcomes. In cases where net values will be close to zero, you're definitely right. That would cause people to scale back their bids. But, for many issues, expressive benefits are effectively unidirectional. In any case, I don't need to set up a predetermined outcome to get the result. Say, after a dozen DRP elections at the national level, the mean net value is half a billion dollars and the variance is a hundred million. Surely people could feel fairly safe in bidding several million dollars -- quite unlikely that they'd ever be decisive with that size bid. I would then predict that total amount bid increases with the number of elections held as people realize the amount they can inflate without being decisive. Yes, but in social choice generally, is it not the case that the outcome can be unknown? Certainly. But, so long as each voter can be reasonably sure that his vote won't be decisive, my argument holds. Fred Foldvary = [EMAIL PROTECTED]
Re: Median Voter vs. The Sub-optimal Equilibria
On Thu, 5 Sep 2002, Fred Foldvary wrote: Each voter writes down $5 million, the project is undertaken, and social loss of $85 per voter follows. Eric If a voter writes down $5 million, he is declaring that the project is worth far more to him than the $100 cost he will have to pay. But he's lying!! He is willing to pay the $100, so what basis is there in concluding that there is a loss per voter? The demand has been revealed by the voters' statements. If they just feel good about having stated that, then it was worth $100 to feel good about it. He takes the payment of the $100 as totally exogenous. No matter what he bids, he'll either have to pay the hundred dollars or not pay it. So, ignore the $100 and get the expressive benefits. NOthing the voter can do will affect whether or not he pays the $100. The expressive benefits specified in the example were $5. But, it's still rational to state the $5 million preference since the vote doesn't change the outcome and since the bid gets him the expressive benefit. I don't see why this would be less efficient than simply taking a majority vote, and the majority voting yes because they feel good about it. Demand revelation is not perfect, but it is more efficient than simple majority voting. If there is any inefficiency, it is collective democracy itself that is at fault, not the method of social choice. Because the expressive votes are accorded more aggregate weight under DRP than under regular voting. Suppose that the degree of expressive benefits accorded to an individual for expressing a preference is distributed across a continuum of voters. Under regular voting, the people with the highest expressive benefits get as much say as people with low expressive benefits (whose stated preferences will be closer to their instrumental preferences). Under DRP, the preferences of those with the strongest expressive preferences are the ones accorded the most weight. While no voter is decisive individually, the collective failure under DRP can then be massive. If anybody voting instrumentally would never bid more than a few thousand dollars for one outcome rather than another, but expressive voters throw in bids hitting the millions of dollars, the preferences of the more rational voters are swamped far more quickly than under regular voting. To the extent that expressive preferences diverge from instrumental preferences, outcomes will be worse. Eric Crampton Fred Foldvary = [EMAIL PROTECTED]
Re: demand revelation and its discontents
On Thu, 29 Aug 2002, Fred Foldvary wrote: The excess payments must be wasted or given to nonvoters to keep all the incentives correct. (p., 1154). In a footnote, TT suggest that waste could be avoided if pairs of communities agree to exchange their collections of these excess revenues. This is in accord with my proposition that demand revelation does NOT imply the need to waste the resources. Your summary of Tideman/Tullock is bang on. I was only going on about the need for resource wasting because it seemed that you were arguing that the project being voted on would be funded through the taxes collected through the DRP. If this were the case, this would obviously induce incentive changes that would affect stated valuations. There have been a number of modifications to the DRP that have been proposed to avoid wasting the money collected. These losses seem second order, though, when compared to the losses likely to be generated by expressive voters using the DRP. Eric Crampton
Re: Median Voter vs. The Sub-optimal Equilibria
On Wed, 28 Aug 2002, Fred Foldvary wrote: Is that not an integral part of the demand revealing process? To get one's net value, we need to know the cost he will pay, and that cost is the average cost. Tideman/Tullock 1976. They begin the exposition of the demand revealing process with individuals being assigned arbitrary cost shares. These could be average program costs or could be proportionate to tax shares in the current system -- the demand revealing process works regardless of the taxation mechanism chosen to fund the public good. Later, they play with estimating Lindahl taxes, but clearly those wouldn't be average costs either. But if the tax payment includes all the social cost, and value is revealed in the willingness to pay the opportunity cost (sacrifice of resources), why would the benefits be lower than the social cost? The value of the item would include that due to expression. The tax payment extracted in the running of the demand revealing process is intended only to induce truthful preference revelation, not to fund the chosen program. Indeed, extracted funds are to be wasted rather than used to fund the project. Tideman/Tullock also note in their section on Lindahl taxes that information gathered in the demand revealing process cannot be used for setting Lindahl tax shares as this would induce people to lie about their valuations in order to reduce their tax shares. Lindahl taxation is as difficult under the demand revealing process as under any other social choice mechanism. So, nothing specifies that tax payments approximate social costs, whether instrumental or expressive voting is assumed. Eric Crampton Fred Foldvary = [EMAIL PROTECTED]
Re: Median Voter vs. The Sub-optimal Equilibria
On Wed, 28 Aug 2002, Fred Foldvary wrote: There will be individual costs that excede benefits, and benefits that excede costs, but I don't see why the total social cost would differ from the total private costs. The only voters that impose an externality are those who change the outcome, and they do compensate society. It's quite simple. Specify that I get $5 worth of expressive benefits from voting $5,000,000 for project A rather than project B. Specify also that I will not be decisive, and that there are many people like me, each of whom would not be decisive. Specify also that if B is actually chosen, I accrue net benefits of, say, $100,000. If I am not decisive, I will not bid $100,000 for B, because it's quite unlikely that I'll change the outcome. Instead, I'll vote for the sure bet of expressive benefits coming with a vote for A. The demand revealing process will then provide a strongly biased picture of net benefits. Inefficient projects will be chosen whenever expressive preferences diverge from instrumental preferences. Nobody compensates society under the demand revealing process. Check Tideman/Tullock 1976. All revenues collected must be wasted. Tullock has confirmed this in conversation. The money collected can't just be burned, which would confer a benefit upon all other holders of cash. The money must be turned into real resources which would be destroyed. It may seem that a person who sustains a large loss when his preference is not followed deserves compensation, but this cannot be given without motivating an excessive statement of differential value. ... In regard to the uncompensated losses that are produced, the demand-revealing process is similar to majority rule. Why is this regarded as a social waste, if it provides utility to the voters, even if that utility is from the expression? The total value stated by the voters excedes the total cost; where is the waste? We're talking past each other. The amount of expressive benefit enjoyed by the expressive voter does count as utility. But, we can expect that the expressive benefits will be less than $1 for each dollar bid for one project rather than another. If I get $5 in benefits if I bid $5,000,000 for project A over project B, and if I won't be decisive, then I will bid $5,000,000 for A. I'm bidding a number IN EXCESS of the benefits I actually accrue. In the aggregate, many voters behaving this way impose social costs. If someone states a value of $100 for a public good, why would the utility be less than than $100 spent for a private good? Because it's very very cheap for me to state a value of $100 for a public good if I'll not be decisive and if I won't pay the full cost of the $100. If I get even an infinitessimally small expressive benefit from saying that I value the public good at $100, then I'll do it regardless of how much the public good is worth to me. Let's say that each person gets $5 worth of expressive utility from voting for statue construction. The average cost to each voter if the statue is constructed is $50. And, each voter gets $3 worth of direct utility from looking at the constructed statue. Then the total utility per voter is $8, while the cost is $50, and the statue is not obtained. With demand revelation, the statue is only bought if the total stated value is greater than the total cost. Please tell me which version of the demand revealing process you're referring to. I'm looking at Tideman/Tullock, 1976. Nowhere does it specify that any cost/benefit analysis is undertaken. We're simply adding up the stated dollar valuation for project A (building the statue) versus the stated dollar valuation for project B (not building the statue). If no voter is decisive, each will state a positive value for project A because that's the only way of getting any utility, and the project IS undertaken. Since no voter is decisive, each voter takes the tax share as given and exogenous (the statue either will or won't be built, regardless of his vote). Optimization then requires voting for the project. He does not vote for the statue. With demand revelation, he only states the maximum he would be willing to pay. In this case it is $8. What makes demand revelation superior than ordinary voting is that one states a value for the good rather than voting yes or no. Ok. Same example as before, each individual voter obtains expressive utility of $5 from stating a value of $50. Project is built. But I still argue that nothing in the Tideman/Tullock system requires that the sum of the stated benefits has to exceed the known project costs; the system simply picks the option with the highest expressed valuation. In the example from before, option A is to build the statue, option B is to not build the statue. If there were zero expressive benefits anywhere, all voters would state a willingness to pay of $47 for option B ($50 average cost less $3 utility
Re: Median Voter vs. The Sub-optimal Equilibria
Actually, I'm in the process of writing up a short article for Public Choice on this topic (as Bryan may recall). If expressive voting theory holds, and if expressive benefits are increasing in the amount of money voted under the Tideman-Tullock procedure, then the demand revelation process should induce worse outcomes than the current system. Specifically, people who have the strongest preferences are accorded only one vote each in the current system. Under the demand revelation process, their influence will be magnified relative to more instrumentally-oriented voters. Under the demand-revealing process, if my vote is decisive in changing the outcome, I have to pay an amount equal to the amount of my dollar vote that was necessary to swing the outcome: say that $1 million votes for option A and my $20,000 vote was enough to generate $1,010,000 in votes for B; then I owe a tax of $10,000. Say that I get expressive benefits of $1000 by telling everyone I've put in a bid of $10,000 for policy option A under the demand revealing process. So long as my chances of being decisive are less than 1/10, it's rational for me to bid $10,000 and gain the $1000 in expressive benefits. In equilibrium, the people with the strongest expressive preferences bid the most and none of them are likely to be decisive, and outcomes are worse than under a one-man one-vote system, so long as expressive preferences diverge from instrumental preferences (which Bryan's work strongly suggests). Eric Crampton On Mon, 26 Aug 2002, Bryan Caplan wrote: If I remember correctly, demand revelation mechanisms are useless if the probability of decisiveness is low and voters get some direct utility from expressive voting or holding irrational beliefs. Thus, suppose I get a $10 direct expressive benefit from voting for tons of useless health care spending, and the probability of decisiveness is 1-in-a-million. I don't see how any demand revelation mechanism is going to help. -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks*
Re: Median Voter vs. The Sub-optimal Equilibria
On Mon, 26 Aug 2002, Fred Foldvary wrote: If the average cost, say for mosquito abatement, would be $5, and that person states he would pay up to $10 for it, then he is knowingly contributing to the total stated value, and if the total value exceeds the cost, is willing to pay the $10, regardless of his reason. All we really should care about is how much he is willing to pay. There can be all sorts of reasons why one would favor a program. One could, for example, favor a freeway because he thinks it helps birds navigate, even if in fact it does not. No matter, he is willing to put up bucks, and that is what counts. The important point is that there's a disjoint between the willingness to pay and the actual payment: an expressed vote preference, even in the dollar terms of the Tideman-Tullock procedure, leads only probabilistically to actual requirements to pay the amount. If the expressive voter is risk neutral, faces a 1/million chance of being decisive and having to pay, and derives expressive benefits of $1 from saying I like poor children so much, I just voted $1 million in favour of program X that will help the poor, the voter will reveal a preference of one million dollars for program X. Of course, risk aversion will mitigate this somewhat, but if inefficient programs give larger expressive benefits, then instituting the Tideman-Tullock procedure will lead to worse outcomes. Eric
Re: Median Voter vs. The Sub-optimal Equilibria
On Mon, 26 Aug 2002, Fred Foldvary wrote: First of all, the demand-revealing method does not require that the identities of the persons stating a value be public. Each voter can be given a password, and he enters a stated value on a web site. The administrator of the system knows his identity, but this is not public knowledge. The voter can then express anything he likes, just as in a secret ballot. I haven't argued that the inefficiency would arise from a public ballot, though that could make things worse, certainly. We currently have a secret ballot, but people still feel the urge to go and make their mark rather than just pretend as though they had. Expressive benefits seem to key into a few things, not least of which is a person's own self-image. Voting for a candidate that expresses values with which a voter wishes to identify gives But even if his expression reflects his stated value, he is still deriving utility from the good. Why does it matter the reason for the utility? Because of the divergence of private and social costs inherent in the voting act. What matters is that the voter is willing to pay the average cost of the good plus the expected social cost of being pivotal. Even under the demand revealing process the voter has an exceedingly small chance of being pivotal. So, massive social waste can be approved by majority vote because of the relatively small expressive benefits attached to voting for the inefficient program. If the voter knew ex ante that he would be pivotal, then your statement above would be correct. But, voters each are not likely to be pivotal, and each one knows it at some level. Suppose a community is voting for a public sculpture. One may not really want to have a sculpture, but one gets esteem from the approval one gets from expressing support for the arts. Suppose further that one gets disutility from not voting in accord with one's public expression. The statue is still providing utility, although in an indirect way, as those who get utility from approval of expression still obtained that utility from the sculpture. Sure, but the argument regarding expressive voting is that that utility is lower than the utility that could have been derived from alternate use of the funds that were used to construct the statue. Let's say that each person gets $5 worth of expressive utility from voting for statue construction. The average cost to each voter if the statue is constructed is $50. And, each voter gets $3 worth of direct utility from looking at the constructed statue. Since no voter is decisive, each voter votes for the statue constructionm in order to get the $5 in expressive benefits. Net social waste per voter is $42. I'm not denying that people get utility from expressing their preferences; I am arguing that they're in a massive PD game that leads to an inefficient outcome. ERic It is like admitting an Albanian into your club. The members don't really like Albanians, but they are proud of being regarded as appreciative of ethnic diversity, so they all vote to let in the Albanian. They all feel good about being diverse, so admitting the Albanian was rational after all. Fred Foldvary = [EMAIL PROTECTED]
Re: Median Voter vs. The Sub-optimal Equilibria
On Mon, 26 Aug 2002, Fred Foldvary wrote: Since the relevant comparitive system is majority voting, there is a disjoint in yes-no voting as well. Agree with you so far The disjoint is even greater, since with demand revelation, each person pays the average cost, whereas with voting, the cost is paid from arbitrary taxation. We need to fold in the revenue aspect. If the majority voting is tied to a head tax, then there is still a disjoint, because given cost C/N, the a person votes yes if his value is C/N, but this does not reflect the intensity of his desire. Why are we assuming that instituting the demand revealing process would get us to uniform average-cost taxation? But it can be questionned whether the probability is known. In the pure case, we don't know at all what values other will state. If probabilities are known, how do we know them? The method of knowing has to be included. If it is known by fiat, this injects the outcome in advance. Tullock speculates in the article that the total amount taxed through the demand revealing process would be quite low, which implies that the probability of being decisive will also be quite low. In any case, after a few such elections, it seems likely that the total amounts bid and the total amounts collected would be public knowledge, and if the total amount collected were indeed a very small fraction of the total amount bid, people would rightly conclude that the probability of decisiveness is low. Additionally, many issues enjoy reasonably broad public support. For any such issues, it would be a rather safe bet to assume that one's dollar vote wouldn't be decisive. This presumes (1) the ballots are not secret or else that they are secret and people express the truth, (2) probabilities of paying the social cost (Clarke tax) are known, (3) the utility derived from expression and wining does not count. 1) neither is necessarily assumed. All expressive benefit could simply be internal to the voter: the voter expressing to himself what kind of person he is. Expressive voting in that case helps build self-image. But, we currently do have a secret ballot, and expressive preferences still reign. 2) They need not be known with certainty. They just have to be known to be relatively low. 3) Not true. Those benefits just have to be lower than social cost to get an inefficient outcome. Fred Foldvary = [EMAIL PROTECTED]
Re: Environmental and economic effects of Speed Limits
On Tue, 20 Aug 2002, Bryan Caplan wrote: I suppose they don't pay the higher insurance premiums - probably 80-90% of the full amount you pay for a traffic offense. They offer 2 policies: under the first one (cheaper) they pay your ticket if you lose. You pay the fine and submit the receipt; they reimburse. Under the Premium option, they will provide you with a grant of the amount of the ticket the second it is issued, then will pay the ticket if you fight in court and lose. The grant is intended for use in developing one's defense, etc. The premium option is $120/yr, and has no maximum number of tickets that will be eligible for the grant. Sure, most of the cost of the ticket is in the insurance premium, but should still expect adverse selection problems. On the other hand, benefits are only payable if you have a valid driver's licence when you get your ticket; presumably, folks who would run the system into larger losses lose their licences before they can impose too severe a burden -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks*
Re: depreciating assets with rising prices
On Mon, 19 Aug 2002, Alypius Skinner wrote: I have often seen the housing market so strong that even stocks of physically depreciating housing (darn that second law of thermodynamics!)would appreciate in market value, often quite rapidly. Many times the cost of housing presumably increases faster than the cost of the inputs (labor and materials). Why doesn't a natural cap exist on housing appreciation by virtue of the threat that potential buyers may simply build their own houses by paying for the labor and materials directly? If most of the value accrues from land use and zoning regulations that prevent tearing down and rebuilding, and if comparable land is unavailable, then such a cap could be quite high. There was an NBER piece a little while back estimating how much of land value was from the zoning/permitting process -- was significant amount, but can't recall the figures. Guess the cap would be that the difference in value between a house in disrepair and a potential replacement house can never be more than the construction costs PLUS the permits. If the permits are expensive, you'll see a lot of homes in relative disrepair. On a related note, why does the local press--which does all sorts of handwringing over the rising prices of gasoline, food, electricity, automobiles and other consumables--rejoice when local housing prices are inflating? In fact, the higher the rate of housing inflation, the louder the local opinion shapers seem to cheer. Why don't they cheer when the price of, say, transportation or food increases at a double digit annual rate? Because most folks have far more of their wealth locked up in their home than in shares in oil or grocery companies. Can make an argument that homeowners are better off whether prices rise or fall (income and substitution effects: prices fall, you can afford a bigger house; prices rise, you can sell your house and buy more other stuff); but most folks tend not to think of things that way. Eric ~Alypius Skinner
Re: Nations as Corporations
On Thu, 15 Aug 2002, Misha Gambarian wrote: On the other side, if we allow people to buy more than one share (as it happens in real corporations) - then I think we can expect that rich people will buy many shares (as they do in existing real corporations) to get political influence more directly than now and USA will become oligopoly with poor people having less power than they have now. Ok. Assume 280 million shares (approx. current population). Current GDP is approx. 10 trillion. I have no idea what the current valuation of the stock of wealth in the US is, so let's just assume a lower bound share price as being 1/n of the PDV of income flows (GDP). The present value of an infinite income flow of 10 trillion dollars at 5% interest is about 200 trillion dollars. Dividing that by the number of shares, we get about $700,000 share value. The share price can't go much lower than that because, in the limit, somebody could buy all the shares, enslave everyone, and get output that would be some fraction of current output (lower since it would be expensive to keep everyone as slaves). But, to get the majority necessary to do that would require an investment of at least half the market valuation -- $100 trillion. While I think capital markets are fairly efficient, I find it quite implausible that anyone could raise that kind of money to run a hostile takeover. And, absent that, just buying another $700K share to get one more vote would be ridiculous. Even if all the rich folks in the country liquidated all of their resources to buy shares, they still wouldn't have any significant increase in their control rights. Bill Gates has what, about $62 billion? If he sold everything, he could buy about 89,000 shares. Out of 280 million. That's still less than a tenth of a percent of the shares. Fears (or hopes!) of oligopoly are greatly overstated.
Re: Nations as Corporations
On Thu, 15 Aug 2002, Misha Gambarian wrote: Here you assume that all GDP income is distributed as dividents - doesn't look probable. If people assume that their normal income is dividents this still doesn't work, because of income inequality. Not assuming that at all. Just trying to get a handle on the break-up value of the country for purposes of assigning some minimum valuation. The break-up value shouldn't be less than the value of the assets in the country, and the value of the assets in the country should be reflected in the current earnings stream (GDP) generated thereby. Bahamas. I think share price will absolutely never be so high - I think we can speak about 50-100,000 as top estimation. If price is 5, then . The valuation I used assumed that any single owner could appropriate the entire earnings flow of the country. If the corporate charter of the United States prevents the enslaving of people in the country who aren't shareholders, then my numbers would be a rather high upper-bound and the actual price would be lower. How restrictive do we expect the corporate charter to be? And who will enforce it? The Constitution was supposed to have been some kind of binding document, but the Constitution now seems to just increase the costs for government to engage in certain types of activities rather than preventing them altogether. H. For example, in Russian Voucher program it was expected that Voucher (for which was sold very substantial part of Russian industrial property would cost about $10,000 - but actually they cost about $10. Well, the official estimates of the value of industrial property was rather too high in that case, no? First, what happens with people who sell their shares. a) They can be effectively expelled from USA. It will probbaly lead to USA without underclass, with much less crime and slightly higher cost of living. Doesn't look very probable, through. (INS and border quard look uncapable to achieve this). b) They will be expelled, but unefficiently (more or less like mexican illegal immigrants now). It will lead to larger underclass than now without rights, probably more crime. c) They can just lose their voting rights, but still have right to work and live in USA. In this case I expect price of share to be very small, probably less than $10,000 - and in this case Gates can buy 6,000,000 votes and more or less make USA presidents (No president will be able to ignore him). I this case we will come to oligarchy pretty quickly. If there are 240 million shares, Gates would need an order of magnitude higher number of shares to be able to get a controlling interest. Six million out of 240 million is still pretty small potatoes. Second question, what will happen if somebody sells his share and then dies? Or just dies ? does his share dissapear? It doesn't look just if somebody bought share, come to live in USA, and then was suddenly expelled when previous owner died. On the other side, if shares stay, there becomes constant supply of shares from old persons, and we cannot expect shares price to be high. (people will spend retirement in Mexico instead of Florida, in cheaper coutry and having substantially more money.) Presumably the estate would hold the share, and then sell it to the highest bidder. If the only source of new shares is from the sale of current shares (either through emigration or death), the price of shares would be quite high. The sum of people wanting to move to the United States plus people being born in the United States is much higher than the current mortality numbers. As I tried to argue above, we can expect share price to be much lower than $700,000 (at the least at the start), and possibility of oligopoly can be much higher that you think. Valuation will depend on the nature of the corporate charter and, critically, on whether that charter can be made self-enforcing. If a majority shareholder is not bound by the corporate charter, then we can quickly become his slaves and he can appropriate all revenue, unless the total amount of extraction from a slave state is lower than the maximal taxation from a free state. In either case, the total valuation has to reflect the PDV of the maximum amount that can be appropriated by a single majority owner. Mikhail Gambarian Major of Economics, Erasmus University
Re: Nations as Corporations
On Thu, 15 Aug 2002, john hull wrote: to pay. Do you think a firm would take the risk of plunking down that kind of money for a multi-generation debt? It would likely depend a lot on how property rights over shares work out and how liens on shares would be treated. If the market price did settle around $700K, then it would be unlikely that an indentured servant would pay off his share in his lifetime. However, he could pay off some fraction of his share and his estate would inheret a fractional share. So long as the company bringing in the indentured servant could maintain its property right over the part of it that isn't paid off, the system should work. I am curious why you used GDP as the basis for share calcualtion. I'm not attacking it, I just don't it's appropriate. Seemed like a decent starting point for getting a total market valuation. I'd more than welcome alternatives. In the limit, the market valuation of the country is the market price of the assets in the country (the break-up value). I have no way of guessing at the valuation of the current stock of wealth in the country, but the stock of wealth should be reflected in the current price of outputs. The stock of capital should be equal in valuation to the present discounted value of the stream of revenues flowing therefrom. Of course, I'm also treating the population as part of the capital stock in doing this. Eric Best wishes, -jsh __ Do You Yahoo!? HotJobs - Search Thousands of New Jobs http://www.hotjobs.com
Re: Why Compact Cars Identical?
On Mon, 12 Aug 2002, fabio guillermo rojas wrote: Wouldn't it be easier to produce cheap cars if all models were similar to each other? Ie, you wouldn't need to retool for every model - just make some cosmetic changes and keep the cost low? I think that was the idea behind the Ford Escort first, then other cars like the Hyndais and Kia. These were all small, boxy cars designed to be cheap and amenable to cosmetic changes. That doesn't explain homogeneity ACROSS makes of cars though. Chevys don't look all that different from Fords these days; in the 50s, they were quite different.
Re: Public support for farm subsidies
On Wed, 31 Jul 2002 [EMAIL PROTECTED] wrote: but I try to recall that the wording of a poll can substantially alter its results. Imagine, to The question wording could have been a bit better, but nothing was misrepresented or too slanted. The question was framed around the actual farm subsidy debate in Canada, which largely centers around responses to foreign subsidies (which are a fair bit higher than the Canadian ones). Does anyone see any evidence that outside of areas in which farming plays a large role Americans support higher (or indeed continued) ag subsidies? I'd love to see results from a decent survey on this. I'd be willing to bet in a Hanson market on the results. I'd put even odds on overall support for farm subsidies being at 65% in a fair, unbiased question. I'd give 2:1 that support is 50%. Eric
Public support for farm subsidies
This question has been bounced around on the armchair list for a while...here's a bit of evidence on the question. It's from Canada, but I doubt that American results would be that much different. The vast majority of Canadians support farm subsidies for the indefinite future. The question keys into a bit of standing Canadian anti-Americanism, but change the question wording to reflect American farmers receiving lower subsidies than the French, and I think results of an American poll would be quite similar. The poll, taken August 2001, can be found at: http://www.canadianalliance.ca/hotissues/viewby/index.cfm?DoID=756readarticle=1dirlevel=2category=4department=37 Eric -- If you found out that Canadian farmers receive less subsidies than American or European farmers, which of these two statements would come closer to your view: a) Canadian farmers should not receive subsidies to help them compete with the subsidies that farmers in other nations receive, even if this means that some farmers go bankrupt ... 13% b) Canadian farmers should receive subsidies to help them compete until farm subsidies in other nations are lowered, even if this means subsidizing farming for many years 78% c) no opinion ... 10%
RE: Republican Reversal
On Thu, 18 Jul 2002, Gray, Lynn wrote: In summary: In terms of religious doctrine related to our origins there is no cost associated with being wrong however there is a cost related to being wrong about economics. Actually, Caplan's rational irrationality point is that there is no cost to being wrong about EITHER of these. Any individual voter will make zero difference in political outcomes, so beliefs not founded on fact or science are just as costless in voting space as in religious space. Check out one of Caplan's articles on the topic -- www.bcaplan.com .. links can be found under his academic economics section. Lynn -Original Message- From: Anton Sherwood [mailto:[EMAIL PROTECTED]] Sent: Wednesday, July 17, 2002 6:21 PM To: [EMAIL PROTECTED] Subject: Re: Republican Reversal Gray, Lynn wrote: By saying it was inappropriate I meant it was rude. I am aware of the weight of the evidence in regard to human evolution. However, to say that those who believe in Biblical creation are dumb/ignorant is at the very least less than good manners. Worse than saying the same of people with wrong ideas about economics? -- Anton Sherwood, http://www.ogre.nu/
Re: Spam: Legal, economic or technical problem?
While we're at it, why don't we make it illegal for people to kill each other. If it were illegal, with stiff fines, we'd surely get rid of murder. Same for drug use. I find it highly implausible that a regulatory structure like that proposed below would make a whit of difference other than increasing the proportion of spam coming from disreputable firms. On Mon, 28 Jan 2002, Fred Foldvary wrote: --- Ole J. Rogeberg [EMAIL PROTECTED] wrote: A problem with Fred's solution is that the most obnoxious spammers would probably set their field to the non-spam when they sent out spam, But if it were illegal, with stiff fines, for a spam message to have the field set as non-spam, that would decrease the volume. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
On Mon, 28 Jan 2002 [EMAIL PROTECTED] wrote: I took a look at the Pobox mail service and it seems very good for helping to prevent spam. Most spam filters knock out messages sent to undisclosed recipients or to lists of people, which also knock out listserv messages. Blocking individual senders seems pointless because most spammers switch send addresses with each mailing. Blocking by subject header helps somewhat but is risky...can get rid of mail you'd want to get. Legal fixes won't work because it's too easy to move out of jurisdiction, and within-jurisdiction spammers don't seem to be easily found. My guess is that if the problem gets bad enough, and unless filters improve, a few ISPs will start offering services that will block all mail from spammer-prone ISPs (msn.com, mailcity.com, emailisfun.com, worldmailer.com, email.com, olemail.com -- just a few of the sender domains in my kill file)). If enough people sign-up with those kind of ISPs, the others would eventually be forced out of business. Unless DoJ rules such practices anti-competitive, I suppose. Eric Crampton
RE: Daylight savings politics
As a farm-boy from southern Manitoba, I can assure you that I didn't mind daylight savings time at all. Who the hell wants to wake up at sunrise when sunrise is 4:30 in the morning? 5:30 is far more reasonable. And, sunset at 21:30 isn't unreasonable either. Eric -Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of Thomas TerBush Sent: Tuesday, February 20, 2001 10:03 AM To: [EMAIL PROTECTED] Subject: Re: Daylight savings politics My understanding was the city-dwellers tended to be for daylight savings time since it gave them an extra hour of sunlight in the afternoon, and farmers tended to be against because it subtracted an hour from the morning, although this may be in disagreement with what is happening in Mexico if Mexico City turns out to be a more vociferous opponent than the more rural areas. Here in Japan we don't have daylight savings. The story goes that the government tried to implement it in the 1960's, but found that a lot of people ended up working one hour longer during, so they went back to year-round standard time. One hypothesis would be that it is instituted to encourage more consumer spending in the evenings. So, maybe you could look for higher consumer spending as one of the benefits, and some form of lower farm output as one of the costs. Tom - Original Message - From: [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Wednesday, February 21, 2001 2:54 PM Subject: Daylight savings politics -- From: [EMAIL PROTECTED][SMTP:[EMAIL PROTECTED]] Sent: Tuesday, February 20, 2001 9:54:00 PM To: [EMAIL PROTECTED] Subject: Daylight savings politics Auto forwarded by a Rule Armchairs, What is the story behind Arizona not implementing daylight savings time? How would you measure the costs and benefits of such policy? In Mexico, daylight savings were introduced some 4-5 years ago. People didnt like it. And now the new president came with a politically "good idea": to reduce the savings period from 7 to 5 months to "satisfy those who were not comfortable". But northern Mexican states now feel in disadvantage with their intensive trading partners in border US states who do apply the full 7 month period. But then again, the also new governor of Mexico city (from a different party than that of the president) also got a "good idea": Daylight savings is authoritarian and disrupts people's everyday lives, hence, he is considering to cancel the whole savings thing in Mexico city... --a city where, to make things even more nonsensical, 35% or so of nationwide economic activity is held and which is sorrounded by some other 10 states who do follow the daylight savings program.
Re: Daylight savings politics
On Wed, 21 Feb 2001 [EMAIL PROTECTED] wrote: I have never understood this rationale--especially for farmers. The sun is up as long as it is up, regardless of what we do with our clocks. What is it that prevents farmers from getting up when the sun rises, and working til it sets, no matter what clock time that is? What problem does clock manipulation solve for them? - easier to have hired labour show up for 6 instead of 5 am. - the greater the overlap between your work-hours and everyone else's, the easier it is to get parts and repairs and such - if your kids are in school 9-3:30 (and on the bus 8:00-4:30), you can get more work out of them from 4:30 to sundown if sundown is later (tough to get much work out of them before school). Brian Doherty
Economics Ph.D. ...WSJ article
February 20, 2001 A Dearth of Economics Doctorates Leads to Royal Recruiting Battles By JON E. HILSENRATH Staff Reporter of THE WALL STREET JOURNAL During the last month, Julie Mortimer has been flown around the country on all-expense-paid trips to Chicago, Boston, New York and San Francisco. She's been wined and dined at the upscale Rialto restaurant in Harvard Square and wooed through e-mail by Gary Becker, a Nobel Prize winning economist at the University of Chicago. Such fawning used to be the calling card of high-profile fields such as consulting and investment banking. But 28-year-old Ms. Mortimer is part of a new contingent of hot job candidates: students with doctorates in economics who want to teach. Traditionally, the job search for these entry-level college professors has been a long battle that ended with poor pay in a dingy, ill-equipped office. New economics professors "used to get a computer and a couple of thousand bucks" to start, says Lawrence Katz, who runs Harvard's recruiting effort for economics scholars. But these days, a confluence of events including a scarcity of economics Ph.D.s and a rise in students clamoring to study economics means that even low-level candidates are treated like big shots. Pay for entry-level economics professors has risen by about 15% since 1999, according to a University of Arkansas study. And this year's crop of top doctoral students have seen universities sweeten offers for assistant-professor jobs with light teaching loads, early sabbaticals, $20,000 research budgets and $15,000 in summer pay. That's on top of the $70,000 to $80,000 salaries they already are offering for a nine-month school year. Those who focus on finance are getting even sweeter offers with many business schools offering six-figure salaries. Ms. Mortimer, a former management consultant who impressed professors with a study on the economics of the video-rental industry, canceled 11 interviews after she corralled offers from Harvard, the University of Chicago and North western University's Kellogg Graduate School of Management. She's received two additional offers since, but she's not deciding until she figures out where her husband will land. He's also a doctoral candidate, and has gotten seven offers from consulting companies and the government. "The whole market has really gone much better than I would have expected," says Ms. Mortimer, who earned her undergraduate degree at Carlton College in Minnesota in 1994. The hot market for young economists might seem odd with the economy slowing and layoffs mounting. But supply and demand helps explain it. On the demand side, college economics departments are faced with increased competition from high-paying consulting companies and business schools who trawl the annual American Economics Association meeting in January for young talent. Professors say Wall Street firms are also in the hunt for Ph.D.s with a financial focus. Simultaneously, undergraduate enrollment in economics classes has been rising after a big slump in the early 1990s, putting pressure on schools to bring in more professors. At top schools, including Harvard and Princeton, the number of undergraduates majoring in economics is up 37% from 1995, says John Siegfried, a Vanderbilt University professor who tracks the field. At schools like Harvard or Columbia, which don't house undergraduate business departments, economics now is the most popular major on campus. Harvard's introduction to economics class -- taught by Martin Feldstein, an adviser to President George W. Bush during his campaign -- is packed with 900 students in a typical year. At Columbia, the number of students taking macroeconomics has risen from to 455 from 164 since 1991. Even at engineering-oriented Massachusetts Institute of Technology, economics accounts for about one-tenth of undergraduate majors. "People feel an economics degree is going to be helpful as they decide that their career paths may take them into business schools or consulting or financial markets," says Richard Clarida, chairman of Columbia's economics department. Hungry for teaching and research talent, Mr. Clarida three years ago led a high-profile effort to lure Robert Barro, a superstar Harvard economist, over to Columbia with a salary reported at $300,000. Mr. Barro backed out, but the following year Mr. Clarida turned his recruiting battle to focus on young assistant professors and brought in six. Harvard last year hired five new Ph.D.s, a large number considering that its staff just numbers 40. Princeton, which recently began a new finance program, is adding four or five economics positions to a faculty of 47. Public universities are also beefing up. Then there's the supply side. Ironically, despite the demand from undergraduates, fewer Americans are choosing to go all the way down the doctorate path. Vanderbilt's Mr. Siegfried estimates that this year, universities will turn out no more American economics Ph.D.s than
Property values
Anybody know where I might find a time series index of the aggregate value of property in the United States? Thanks for any info, Eric Crampton GMU
Re: Canada
Check out David Gratzer's book: Code Blue: Reviving Canada's Health Care System ECW Press, 1999. ISBN 1550223933 "Our nation`s health care system is in worse shape than ever before. Increasingly strident government cutbacks have made it harder and harder for Canadians to gain access to the medical care that their tax-dollars are paying for. Code Blue is an uncompromising look at the factors that are contributing to the decline of our medical system, the debate raging around health care reform and possible solutions for the new millennium. Highly informed and expertly written, this is a book that concerns the future of every Canadian citizen. " On Thu, 4 Jan 2001, Pierre Lemieux wrote: You might want to have a look at the op-ed I had on the prohibition of private insurance in the Nov. 18 Financial Post. The piece is reproduced at www.pierrelemieux.org/arttwotier.html. At 18:44 01-01-04, you wrote: Is there a good website or book that discusses the failures and successes of the health care system in Canada? John -- John A. Viator, Ph.D. Beckman Laser Institute Medical Clinlic 1002 Health Sciences Road East University of California, Irvine Irvine, CA 92612 Email: [EMAIL PROTECTED] Phone: 949-824-3754 Fax: 949-824-8413 PIERRE LEMIEUX Visiting Professor , Université du Québec à Hull Director of the Groupe de Recherche Économie et Liberté (GREL) Research Fellow, Independent Institute http://www.pierrelemieux.org [EMAIL PROTECTED] (Backup: [EMAIL PROTECTED]) Montréal address: C.P. 725, Tour de la Bourse, Montréal, Canada H4Z 1J9 Fax: 1(819)585-4423 PGP Key: 0xBDFFCD16 Fingerprint: CF3E 4A3F 57AB 8AB2 88FB A1D8 C83D 2E15 BDFF CD16 ** "L'homme vivant sous la servitude des lois prend sans s'en douter une âme d'esclave." The man who lives under the servitude of laws takes, without suspecting it, the soul of a slave. (Georges Ripert, Le Déclin du Droit, Paris, Librairie Générale de Droit et de Jurisprudence, 1949, p. 94) **
Re: PS2 weirdness, cont.
Reflection of time preference. When the things first came out, the time at which one could be expected to be had at the stores was far off. Now, it's not so far off and so prices are lower. Will converge down to MSRP Eric Crampton On Tue, 19 Dec 2000, Ananda Gupta wrote: On further reflection, I realized that I had not considered eBay's time delay, which of course allows "sniping" (outbidding someone at the last second, while they are away from the computer and unable to respond). Of course sniping is technically irrational, or perhaps it is a rational response to others' irrationality -- I'm not sure. In any case, the actual final selling price was closer to $450 than $350 in the dozen or so auctions I checked, so the market has not quite cleared, but it certainly displays some elements of a perfect market. Ananda
Re: Top 10 Economic Puzzles
A quick look on ebay shows basically-identical Playstation 2 units selling with high variance in prices. For example, a unit sold at 7:58 this morning for $960, to which $25 would be added for overnight delivery. Another unit sold for $1325 at 7:41 this morning with free overnight delivery. Same unit. Another sold for $315 that morning at 5:44 am. $20 shipping was to be added for that unit. Some interesting questions come out of this 1) Why didn't Sony just put some kind of special stamp on the first 100,000 units, designating them as "first units" and selling them for $800 or whatever it figured the market clearing price would be, then selling subsequent standard units for the $300? Avoiding antitrust action of some kind? Protecting consumer loyalty? What? 2) Why aren't auction participants spending 5 minutes of searching to save hundreds of dollars? Search costs are quite low on ebay On Thu, 26 Oct 2000, Chris Auld wrote: And now for something completely different: Playstation 2 was introduced today, with a retail price of $300 and "only" 500,000 units available. They're selling on Ebay for over $1,500. Sure wish I'd pre-ordered a thousand or so Chris Auld (403)220-4098 Economics, University of Calgarymailto:[EMAIL PROTECTED] Calgary, Alberta, CanadaURL:http://jerry.ss.ucalgary.ca/
RE: Top 10 Economic Puzzles
In simultaneous auctions with identical start and end times, identical shipping terms, ...? The only explanation that makes any sense to me is that people are accurately stating their maximum bids in auctions, and sometimes you end up with two people with high maximum bids. With (perhaps) an hour of work, they could understate their maximum, then compare that auction to others if they're outbid. Entirely possible that some folks place a higher cost on the hassle than the expected price difference. But it's quite easy to observe the incredible range of prices ($400 - $3000) for pretty much identical items. It would be interesting to correlate a buyer's Ebay experience level, as proxied by his rating (higher rating means more successful transactions) with price paid. I'd expect that more experienced buyers know to understate and reevaluate. Eric Crampton -Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of [EMAIL PROTECTED] Sent: Thursday, October 26, 2000 5:37 PM To: [EMAIL PROTECTED] Subject: Re: Top 10 Economic Puzzles I collect baseball games (board games) and the variance in price for those is pretty high. Sometimes a Milton Bradley game from 1970 goes for about $30 and sometimes it can go as high as $100. I don't think there is a huge difference in condition. Cyril Morong
