Hide from friends, but not from enemies
Let me make five assumptions about friends and enemies: * How much people like or hate you depends on their estimates of your features. * You don't know who likes or hates what bundles of features, so you don't know who will like or hate the things they learn about you. * Whether you are above or below certain friend and enemy thresholds matters more than how far above or below those thresholds you are. * You can do certain things to reveal more or less about yourself to people. * Strangers start out giving you a middle estimate, of neither a friend nor an enemy. What do these assumptions imply? As you reveal more to strangers, the distribution of their evaluations spreads out, some moving up toward friends, others down toward enemies. You want to reveal more to potential friends in the hope that some of them will rise above the friend threshold, but you do not want to reveal to potential enemies, for fear they will fall below the enemy threshold. Once people do cross these thresholds, however, your preferences about revelation switch. You want to stop revealing things to confirmed friends, for fear of losing them, and you want to reveal more to confirmed enemies, in the hope of winning them back. So when looking for someone to marry, you'll want to open yourself to people. And to help this process, you'll want to learn about yourself. Once you are married with children, however, you will not want to learn or reveal more about yourself. Similarly, when searching for a new career or entry level job, you'll want to reveal yourself, but once tied to a career or workplace, you will not want to learn or reveal more. When moving to a new neighborhood you'll ponder what you really want, but once you live there you will not want reveal too much to neighbors, or think too carefully about how much you like them. This might help explain standard life cycles in openness and conformity. The young discover and celebrate their passions and uniqueness with acquaintances, but not so much with old friends. The old prefer stability and conformity to community, and reveal and discover the most with strangers or adversaries. To the young the old seem boring and conformist, while to the old the young seem lonely and flighty. The young and the old can really be the same sort of people, but in different circumstances. Updates to my thoughts on this will be found at: http://hanson.gmu.edu/openhide.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: Now Bush to win 1.5:1
Well the betting markets made a big reversal last night, from up to almost 75% in favor of Kerry, now down to a 5% chance for Kerry (even that looks too high, so I finally made my first election bet). Of course we should expect this sort of reversal at least 1/4 of the time, so one can't be too stunned. But this does at least raise a small suspicion that theses markets were too volatile due to over-confidence. However, one case won't really show this - we have to look at statistics over many events to see if there's a trend. In the end the important question is comparative - are there any other institutions that on average do better? So far direction comparisons between markets and other institutions in the field have favored markets. And real and play money have come out about the same. But the jury is still out. 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: Now Bush to win 1.5:1
I wrote: ... So far direction comparisons between markets and other institutions in the field have favored markets. ... [EMAIL PROTECTED] responded: In this case, were the markets closer than the polls taken right before the election? Were they closer than the exit polls? I don't know the details about yesterday. But if you wait a few years, I'm sure the academics who did the previous studies will extend them to include this new data. 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
Kerry to win, 2.5 to 1
Tradesports, IEM, Betfair give Kerry a 71 to 74% chance to win. 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
Is Manipulation Good?
Since the precedent has been set, let me advertise my new paper: --- http://hanson.gmu.edu/biashelp.pdf Manipulators Increase Information Market Accuracy by Robin Hanson and Ryan Oprea, March 2004 Information markets are low volume markets whose prices offer informative estimates on particular policy topics of interest. Observers have expressed concern that such prices might be less informative due to manipulators, i.e., traders who prefer that we see some policy estimates instead of others. We adapt a Kyle-style market microstructure model to the case of information markets, by assuming risk-neutrality and by allowing information effort and general trader irrationality. We add a trader who has an additional quadratic preference regarding the price, and we make ordinary traders uncertain about this manipulator's target price. We find that the mean target price has no effect on prices, but that increases in the variance of the target price *increase* price accuracy, by increasing the returns to informed trading. --- 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: why aren't we smarter?
On 12/1/2003 Wei Dai wrote: I argue that (a) can be an equilibrium. We are rather smart in some areas, but the mechanisms in us that allow that are not up to the task of faking being dumb in other areas - we are actually dumb in those other areas. This is/was an equilibrium because people who tried to fake often got caught. I don't disagree that this occurs to some degree. But there must be a limit to how smart you can be in one area and still be dumb in another. I suggest we have already reached it, because otherwise the facts are hard to explain. Your story does have a certain plausibility. But you'd need to argue that the huge increase in IQ that has been documented during this last century isn't really an increase in intelligence. And doing that makes it harder to take Jewish IQ as relevant data. 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: why aren't we smarter?
On 11/25/2003, Wei Dai wrote: Besides the well-known costs of higher intelligence (e.g., more energy use, bigger heads causing more difficult births), it seems that being smart can be a disadvantage when playing some non-zero-sum games. Here is one example. How often do these games occur in real life, I wonder? Consider an infinitely repeated game with 2n players, where in each round all players are randomly matched against each other in n seperate prisoner's dillema stage games. ... some smart players who are able to recognize the pattern and predict whether a given stage game's outcome will be published. And suppose it's public knowledge who these smart players are. ... ... marking all smart players as bad, ... smart players actually end up worse off than normal players. ... There certainly do seem to be some situations in which it can pay not be seen as too clever by half. But of course there are many other situations in which being clever pays well. So unless the first set of situations are more important than the second, it seems unlikely that evolution makes us dumb in general on purpose. The question instead is whether evolution was able to identify the particular topic areas where we were better off being dumber, so as to tailor our minds to be dumber mainly in those areas. Robert Trivers has argued that we evolved to be self-deceived about many particular things, and to be too dumb to figure out this fact. (see: http://www.mercatus.org/pdf/materials/465.pdf ) We consistently think ourselves to be more able and trustworthy than we really are, for example, but can't seem to realize this. Let me suggest this as an explanation for why people find it so difficult to understand economics. Humanity can't be faulted for not understanding basic physics until recently, since we didn't have instruments to measure this stuff until recently. But we've had the key data on human social interactions for many millennia. Yet most educated people actually seem to understand physics better than economics. Why? My explanation is that we evolved to hold tight to certain misconceptions about our social world, and this makes it difficult to think carefully about economics. We have misconceptions about physics too, but are willing to give up most of them more easily. Of course since many other topic overlap in complex ways with economics topics, this raises the questions of what exactly are the cues that our evolved minds use to figure out which topics they should act dumb on. 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
What's Wrong With Blood Feuds?
A standard story is that formal law is a great improvement over the informal institution of blood feuds, because such feuds tend to go on too long and get too disconnected from whatever harms were originally done. Is there any theoretical treatment of this, explaining or refuting such an argument? 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: Horses and Subsistence Farming
On 8/21/2003, Steffen Hentrich wrote: I believe opportunity costs of ten humans pulling a plow are higher. So it is useful to employ horses. Which horse is able to teach a children, except to eat a piece of sugar? This may be true now, but the question is about subsistence farming, under which by assumption the opportunity cost of humans is roughly the cost to feed them. 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: Horses and Subsistence Farming
At 01:34 PM 8/22/2003 +0200, Steffen Hentrich wrote: This may be true now, but the question is about subsistence farming, under which by assumption the opportunity cost of humans is roughly the cost to feed them. But what is the difference between human intelligence or higher productivity in other uses now and before? I suppose there were always better opportunities for humans then to do the work of a horse. If it where not so, why bother to domesticate animals at all The issue is marginal productivity, not average productivity. The subsistence scenario is one where the supply curve of laborers is low and fat. The demand curve may rise to great heights, but eventually if falls down to meet such a low supply curve. 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: Horses and Subsistence Farming (fwd)
Robert Book wrote: Maybe horses eat cheaper food than humans? That is, maybe you are right that horses eat 10x as much food by weight, but that doesn't mean it's 10x as much weight by dollar value. That's possible. Maybe having a horse pull a plow with one person holding it is more productive than 11 people trying to plow with hand tools. I'm not sure why taht's so hard to believe. Also possible, but perhaps surprising. 11 people are lots clever than one. So the returns to being clever must be very low here. 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: Economics and E.T.s (fwd)
Robert Book wrote: The usual argument is that once life reaches a level not that much further than our own, it should expand out to colonize the universe at a relatively rapid pace. Either this is wrong, or the nearest life at anything like our level must be very very far away. Well, we have reaches a level of life exactly equal to our own, and we haven't colonized anything beyond our planet. The tehnology is probably there, but the costs are high and the benefits are unclear. The same maybe true 200 years from now. A million years is very short on the cosmological scales relevant here. The costs of colonizing should fall drastically in a million years. 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: Horses and Subsistence Farming
At 12:20 PM 8/21/2003 -0400, Zac Gochenour wrote: Horses, though, are much more valuable for their mobility. An interesting tidbit: equestrian foraging developed as a subsistence pattern for the natives in the Great Plains and Argentina. These foragers acquired horses from the Spanish in the 1600s, and the nomadic groups became larger and more mobile, able to travel large distances and follow migrations of large animals such as bison over vast tracks of land and greatly expand the available food supply. OK, but then the question applies to transportation. Can a horse really move as much as ten people, or is it that they can eat foods that are cheaper than food humans can live on? 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
Senators Denounce Policy Analysis Markets
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
Weekday/end Work vs Leisure or Home product
Talking to Bryan just now we came up with the following question. It seems that for most people it is easier to work for money on weekdays than on weekends. This suggests that when trading off working for money versus leisure or home production, people should put more emphasis on working for money on weekdays, and less on weekends. So for example, you should do more leisure and home production on weekends than on weekends, which certainly seems the case. But does this work on the other margins as well? Do people pay to have pizza delivered on weekdays, but drive to pick it up on weekends? Do people pay for parking on weekdays, but drive around looking for free parking on weekends? Any other similar predictions hold? 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: Competition vs. Profits in the NBA
At 01:31 PM 7/10/2003 -0500, Fabio wrote: ... But a lot people inside sports seem to resent big market teams (Yankees, LA Lakers) consistently dominating the play-offs, although audiences seem to want dynasties from big cities. Is there an inherent problem here? Is it inevitable that there is a conflict between people inside sports who want to see some diversity among the winners? Is big league team sports inherently biased towards the dynasty model? Are there viable business models for team sports that could produce a wider range of winners? The conflict you describe is that some people want more of a fair fight, and others put more weight on wanting my team to win. Of course the second group doesn't want to win via too easy or obvious an advantage. They may want the rough appearance of fairness, but in fact want enough unfairness for them to win. Does a similar phenomena occur in other areas of life? Do university alumni want an appearance of fair evaluation of applicants, but really want their kids to have an advantage? Do businesses want an appearance that local media are fair and impartial, but really want to be able to buy them off to prefer their side of the story? Are there other examples? Can we model this behavior as resulting from rational agents, or is some irrationality required to make such a story work? 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: Charity
Fabio Rojas wrote: somebody makes $30K [a year] ... willing to give about $30 month to charity. Is that low or high? I'd say it's probably ok, most people can't afford to give much anyway, with mortages, student loans, children, etc. Only the wealthy could give thousands and still pay the phone bill. Huh? This can't possibly be right. People could choose a cheaper mortgage, fewer children, etc. In a world with a median income of ~$3000, someone who makes ten times that much surely can choose to spend thousands on charity if they want to. 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
DARPA markets on MidEast
I've been involved for several years in helping DARPA to create some markets to help aggregate info on political, military, and economic changes in the Middle East, and the effect of US policy on such changes. For those interested, we are finally going public with some info on these markets: www.PolicyAnalysisMarket.org 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: Self-assesment vs. Rationality
Fred Foldvary wrote: --- Robin Hanson [EMAIL PROTECTED] wrote: irrationaly optimistic self-assesment? It is true that many investors are overconfident of their abilities and wrongly think they can beat the averages. But why call this irrational? It seems to me that the concept of rationality makes sense when it is applied to human action, but it is not meaningful when applied to beliefs. Action is rational or not, based on the actor's knowledge. But we are talking about a context where beliefs get translated into actions in a pretty straightforward way. People buy and sell stuff when they believe doing so will raise their expected (risk-corrected) return of their portfolio. ... If false beliefs are irrational, then almost everything we do is irrational, and there is no economics. For example, most folks don't have a correct knowledge of nutrition; their food choices are thus based on ignorance. There is a difference between ignorance and irrationality - that is the central point of this literature really.
Re: Return to Education and IV
Bryan Caplan wrote: Now maybe you accept this, and think yourself part of, or advisor to, an elite empowered to make ordinary people do things that are good for them, whether they like it or not. I think that what Bill might say is that even though people under-invest in their own education, they are in fact quite willing to vote for education spending. He might even suggest that qua voters, people recognize and adjust for their failings as consumers. Akerlof and Dickens make a similar argument about retirement savings in *An Economist's Book of Tales*. I know that Bryan Caplan would say that people as consumers and people as voters are just two different sets of preferences, and there is no particular reason to expect much consistency between them. But that's a pretty unusual position, so I didn't necessarily expect Bill to agree with it. The theory that people as voters recognize and adjust for their failings as consumers works a lot better for self-control problems than for ignorance problems. If people as voters know that people as consumers should get more college, then why don't they just go get more college as consumers? But here's the crucial question: how sure are you that you and your fellow advisors, and the elites you advise, are substantially less irrational in this process of making ordinary people do things that are good for them? Can't elite advisors be irrational too? I think Bill would say that he's pretty sure. He's seen the data, crunched the numbers, read the literature, etc. If you feel comfortable failing people on their exams, why shouldn't you feel comfortable giving them a failing grade on their decision-making outside of the classroom? But under the theories of irrationality that the topic here, people can be quite wrong, and irrationally wrong, even when they feel comfortable and feel pretty sure. If you're going to posit an irrational ability to reason and accept advise in ordinary people, you must be willing to posit such phenomena in elites and their advisors. At which point just feeling sure is not enough. 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: Return to Education and IV
On 10/25/02, William Dickens wrote: ... the rationality assumptions built into to any inter-temporal optimizing model are so demanding that sort of trying to get it right will get you no where near the predictions of the of the full-rationality-perfect-information model. The deviations are significant both for the individual and for the policy implications. Take saving for retirement. A little irrationality and mandatary saving can cause big increases in welfare. Take college choice. ... people seem to be amazingly uninformed. Anybody who says oh well, there probably getting it approximately right, is kidding him/herself. ... Nearly everyone should get more schooling than they do. This is only one of many intertemporal decisions that people badly screw up because they aren't good at thinking about the future vs. the present. You are assuming that the only way to make good decisions about retirement or college is via direct calculation of costs and benefits across time. An obvious alternative, however, is to rely on the advice of knowledgeable experts. For example, if people would just listen to one William Dickens, they would know to save more for retirement and get more schooling. So in order for irrationality to produce bad decisions about retirement and school, people must not only be bad at thinking about the future, they must also be bad at thinking about whether to take advice from you and similar advisors. Now I am willing to believe that many, perhaps most, people are in fact bad, even irrational, at taking advice. But even so, it is hard to see how it would make sense for an accountable democratic government to push or force people to save or go to school more. If people don't think they need more savings or school, it is hard to see how they would want their government to push them into doing so. So if governments are going to help irrational citizens by pushing them toward more savings and schooling, it would have to be because such governments are run by not-especially accountable elites. Now maybe you accept this, and think yourself part of, or advisor to, an elite empowered to make ordinary people do things that are good for them, whether they like it or not. Maybe you accept that, if asked, ordinary people would not authorize this elite to act this way, and would not accept this elite's advice regarding how they should behave. But here's the crucial question: how sure are you that you and your fellow advisors, and the elites you advise, are substantially less irrational in this process of making ordinary people do things that are good for them? Can't elite advisors be irrational too? For example, might not the self-interest of academics, as sellers of schooling, bias their advice on schooling? 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: measuring value of information goods
Wei Dai wrote: I think we should consider funding information goods (software, movies, music, etc.) through tax revenue rather than copyrights. ... I'd like to proposed the following scheme: Whenever someone first accesses a piece of information, he may be chosen by the access mechanism randomly, with probability p1, to answer whether he values that information more than some random amount of money $x. Then with probability p2, if he answers yes, he is charged $x, otherwise he is denied access to this piece of information forever. p1 and p2 are both supposed to be small. In the usual case, he would just be allowed to access the information for free. Users in this system would be able to access almost all information for free, and when they are asked to state their preferences they have incentives to answer truthfully. ... Some copy protection would still be needed, so that if someone is denied access, he is not able to obtain the information from another channel. However, the idea is that unlike today, the market for such piracy would be so small that no one would have an incentive to supply pirated information or the tools needed to break copy protection. This would seem to work badly for socially consumed information goods, like movies or music. If a group of us decides to watch a movie together, one of us tries to download the movie, at which point he may be denied. Should this unusual thing happen, another of us tries. Only in the very unlikely circumstance that all of us are denied will we actually have to face the possibility of paying for it. And even then all we'll reveal is the opportunity cost of this movie, relative to a bunch of other movies we expect to be able to download for free. You'd need very good estimates of the size of groups that sit down to watch the movie together to infer what you want from this data. 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: Charity and Races as Complements
Alex Tabarrok wrote: 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? Recall that the definition of public goods is not a good that is good for the public! :) The definition is in terms of non-rivalry and non- excludability of which non-rivalry is the more critical component. My point was simply that the output produced by someone running a race is non-rivalrous. Thus, the charitable racer can collect donations from any number of people for running the same race. People could organize a race, and solicit donations to support the race. People can also run some other charity, like for a cancer, and solicit donations to support that charity. The question is why these two charities are so often combined. Many people would not give money to someone soliciting for a race by itself, or for someone soliciting for a cancer charity by itself, but they do give money to someone soliciting for a cancer run. Why the extra willingness to donate to this combined solicitation? 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: Charity and Races as Complements
Fabio wrote: why are these activities combined so often? Symbiosis? Charities need publicity, and staging a big race in the middle of town is one way to do it. I take it for granted that charities do whatever will get them them most donations - so the question has to be about participants, runners and donors. Athletes want fame and glory, and winning a race with a brand name attached (American Heart Association) helps them get invitations to even better races. Why would such a brand name signal they are good runners, any more than any other possible organizer of the race? Why not Safeway races, or 7-UP races? ... The participants also get to socialize with other healthy people with disposable income and who share similar values. So both sides benefit. OK, this suggests that health, income, and values are complements as features of people you socialize with. Why these as opposed to any other set of three positive features (such as humor, intelligence, residence, etc.)? 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: Charity and Races as Complements
john hull [EMAIL PROTECTED] wrote: It allows the participants to demonstrate their commitment to the cause when soliciting money. ... If D.L. is willing to run until he pukes, then the cause must be important to him and I'm more willing to give a few minutes to hear his plea and possibly give money. So why not mow lawns for donations, you ask? ... when people are compensated for something they tend to enjoy it less. ... If you mowed lawns for breast cancer, you'd be putting lawn care professionals out of work and creating even more charity cases. Putting professionals out of work?! This is a confused about economics explanation. I admit people are often confused, but we should also consider more rational explanations. They could spend the same effort they spent training for the race and running it doing their usual kind of job, and then impress you with the dollar amount of money they donated to the charity. If I donated $10,000, couldn't you donate a few dollars? 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: Charity and Races as Complements
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? 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: Charity and Races as Complements
John Hull wrote: They could spend the same effort they spent training for the race and running it doing their usual kind of job They could sell Amway or Mary Kay for seven hours a week, but then they'd give up that good healthy exercise. If they're going to exercise anyway, then running isn't much sacrifice, as I suggested. If exercise isn't much of a sacrifice, then someone's willingness to do it isn't much of a signal of their commitment to a charity, which was the proposed explanation that I was responding to in the above. 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
Nations as Corporations
Imagine that a nation like the US were run like a corporation. To live (and vote) here, you'd have to own a share. You could sell your share and leave, and foreigners could come if they bought a share. The corporate management would be given financial incentives to maximize the market value of these shares. They could issue more shares if these new shares were handed out to previous share holders in proportion to the shares they currently hold. What would go wrong or right with running the US this way? Would management focus too much on making immigrants happy, versus people already here who are reluctant to leave? Would there be too many or two few people here? Would government spending increase or decrease? Would we get less desirable immigrants, relative to picking and choosing among applicants? Would the homeless prefer to cash out and leave, rather than stay and beg here? Would people tend to leave when they retire? 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: Nations as Corporations
Cyril Morong wrote: How would we know what price to charge for a share? There's be an open market which would set prices. Would the U.S. have a monopoly? A monopoly on rights to live in the US, but other places are substitutes. What would we do about people who try to sneak in without buying a share? Same as you'd treat people who stole stock. Will people be required to proove at any time they own a share or be deported (or worse)? Yup. Would it be one share, one vote in an election for management? Yup. Could a person end up with more than one share, buying from people who leave? Yes, but it seems unlikely many would do so. 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: Nations as Corporations
Fred Foldvary wrote: Imagine that a nation like the US were run like a corporation. To live (and vote) here, you'd have to own a share. You could sell your share and leave, and foreigners could come if they bought a share. The corporate management would be given financial incentives to maximize the market value If you own a share, that implies that this is a cooperative, where each person owns one share and has one vote. OK. What would go wrong or right with running the US this way? The problem is central planning. The US corporation would be a giant enterprise subject to the inefficiencies of any large organization. But as with any corporation, the leaders could use decentralized planning, or break the corporation into pieces, if they thought that would maximize stock value. They could dismantle most regulation, if they thought that would help. Also, minority interests would be overpowered as they are now. And as they are in any corporation. 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: Nations as Corporations
Fabio wrote: 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? 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 Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Why Compact Cars Identical?
I went shopping for a compact car recently, and discovered that they are all quite similar - especially their physical shape. This seems remarkable in light of how much cars have varied over the years, and how people supposedly are willing to pay extra for a distinctive car. (And given how similar they are, you'd think they'd be available in more than eight colors. ) Is this convergence due to technology or preferences? Is this just clearly the cheapest way to make a roomy reliable car? Or do people now have a preference for a car that looks just like everyone else's car? 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: Why Compact Cars Identical?
Fabio 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 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. Another note: isn't square and boxy a simple way to maximize space inside the car? OK, but wouldn't this have always been true? 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: Republican Reversal -- from whence, belief?
Grey Thomas wrote: Let us assume the Bible is not true; further, that there is no Biblical God. Thus, no basis for ANY of the 10 commandments, nor thus for any absolute moral good vs. evil. So fornication, adultery, stealing, murder are not This obviously results in a selfish, mean society full of big and little criminals who are constantly calculating how to cheat and steal the most while getting away with it; life is for the current momentary pleasure. ... Irrespective of the objective truth of the Bible, the superiority of a Bible believing society is a position I strongly believe, Doesn't your position commit you to believing that the people in our society who do not believe in the Bible are in fact mostly selfish mean criminals? What empirical support is there for this claim?
RE: Republican Reversal
Lynn Gray wrote: The implication that those who believe in the historical accuracy of the Bible are ignorant was inappropriate, Alex. Forty four percent of the American public thinks that God created human beings pretty much in their present form at one time within the last 10,000 years or so. (November 1997, Gallup Poll) so why should we be surprised that many Americans also support farm subsidies? Why is this inappropriate? Don't we have far more reason to believe that humankind is more than 10,000 years old than we have to believe that farm subsidies don't work? 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: children and cooperation
Bryan Caplan wrote: I'm sure that all of what you says applies to some degree (lower IQ, less punishment, etc), but it really comes down to biological development. Child brains simply aren't developed enough to (a) remember past behavior correctly, (b) connect behavior to punishment, (c) calculate risks. But children in fact do all of the above. They do them to a lesser and worse extent, but that is a different matter. I agree with Bryan; this seems to be an adaptation to the environment of children, not a mistake due to ignorance. Let me propose a signaling story. The young try more to signal to each other that they would be good allies and mates, while the old are already matched more and need to get along. The young need to show that they know how to be and are capable of being cooperative, but they also need to show that they are tough, will defend their allies, etc. 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: children and cooperation
Fred Foldvary wrote: Let me propose a signaling story. The young try more to signal to each other that they would be good allies and mates, while the old are already matched more and need to get along. ... Some adults in tough neighborhoods place much value in respect, ... Many adults remain unsophisticated in that they do not filter emotions ... So it seems to me that cooperation is something that, in part, needs to be taught as manners. John Hull wrote: Perhaps it is an evolutionary artifact: dominance hierarchies are established when young, and children are just doing what evolution has hard wired in their brains. ... Considering that if you look a dominant macaque in the eyes he'll jump on your head and rip your face off, perhaps child social behavior better represents the null hypothesis (so to speak) and adult cooperation represents the break from nature that needs to be explained. The theory that modern adults must learn to be more cooperative because the modern environment differs from the environment we evolved in could be tested by comparing child vs. adult cooperativeness in hunter-gather tribes today. If children are less cooperative even there, it would look more like their behavior is more of an adaption for children to act less cooperatively than adults. 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: academic journals
Fred Foldvary wrote: universities are maximizing something, but it's not clear what. Could it be that such universities seek to maximize prestige, or academic esteem? Thus, the original seed of good and useful research grows into a tree where the fruit becomes an end in itself and is perpetuated by cultural memes which are themselves the end. I hope you meant original seed metaphorically, rather than temporally. It's not clear there ever was a time when things were different. 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: fantastically entertaining paper
Michael E. Etchison wrote: an industry (academic journals) where . . . entry is cheap As a non-academic, I have to wonder -- if getting in is so cheap, why is getting a copy so expensive? Standard armchair econ question, really. If prices are going up, and quantity is going up, we'd suspect demand is up. If quantity is going down, we'd suspect costs are going up. Or maybe price discrimination is getting easier, and you're just looking at the prices the high value customers pay. 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: fantastically entertaining paper
Bryan D Caplan wrote: Here we have an industry (academic journals) where concentration is low, entry is cheap, and most firms use the same production technology (referees with veto power), even though an alternate technology (editors pick) has long been tried, and is easy to try. Frey claims that it is a market failure not to use this alternate tech, because the standard tech has agency costs, which has the effect of raising the costs to one of the inputs (authors). I must have raised this issue before, but aren't you leaving out a key competitive assumption, namely profit maximization? If you have a ton of firms but their motive is not financial success, most of the standard results don't go through. You might appeal to survivorship (with randomly assigned objective functions, profit maximizers gradually take over), but if non-profits have a continual stream of subsidies that does not have to work. A great many journals are owned by for-profit entities. And subsidies do not undermine the survivorship analysis - subsidies are just another name for a customer revenue stream that profit-maximizing entities would also take into account. How about simple coordination failure? The AER is focally viewed as the top econ journal. If one person says the AER sucks and ignores it he mostly hurts his own prospects. A lot of people would have to coordinate on an alternative at once for this to change. The topic was referee vetoes versus strong editors. There have long been journals with strong editors, and I don't see much social pressure against people who like such journals. There might be other coordination failures with people liking the AER, but if so they must be about some other fixed feature of the AER besides referee vetoes. 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: Not such a fantastically entertaining paper
William Sjostrom wrote: I agree that academia wastes vast resources relative to the goal of seeking truth, but I disagree that this implies a market failure, mainly because I don't think the ultimate customers fundamentally want truth. In fact, I think customers in part want faddism and cults of personality. ... Even if we grant that the great bulk of academic publishing is useless dreck, it does not follow that it is wasteful. Grain is usually shipped on large ships, and is dumped into the holds through large chutes. A non-trivial amount is lost in the process, I agree that the mere fact that of useless dreck does not imply an overall failure. Even an ideal institution for generating truth would probably generate lots of useless dreck in the attempt to find a few valuable gems. My grounds for believing that there is more waste than can be attibuted to this are based on other sorts of observations, like what I think Alex and Pete have in mind.
Re: fantastically entertaining paper
On 6/19/02, Bryan Caplan wrote: I heartily recommend Bruno Frey's extremely fun working paper Publishing as Prostitution: Choosing Between One's Own Ideas and Academic Failure. ... http://www.iew.unizh.ch/wp/iewwp117.pdf Peter Boettke added: I completely agree with your assessment of Frey's paper. Well the paper is on an interesting topic that I'd like to see more papers on, but the paper is also an example of why we don't see more papers on this topic; people find it much harder to analyze topics where they personally have much at stake. As economic analysis, Frey's discussion is pretty weak. Here we have an industry (academic journals) where concentration is low, entry is cheap, and most firms use the same production technology (referees with veto power), even though an alternate technology (editors pick) has long been tried, and is easy to try. Frey claims that it is a market failure not to use this alternate tech, because the standard tech has agency costs, which has the effect of raising the costs to one of the inputs (authors). If this were any other industry, I'm sure Frey would be among the first to make the standard economist's response: If your preferred tech is easy, has long been tried, and has lower costs without other disadvantages, in a competitive industry why hasn't it long displaced the standard tech? I'm sure a clever person could come up with an externality or asymmetric information market failure argument, but the amazing thing is that Frey doesn't even try here. I'd say that the key stumbling block to a better theory of academic journals is identifying the real customers and their preferences. 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
Consumer Reports on Deregulation
The July 2002 issue of Consumer Reports (not yet on their website) has an article on p.30 on Deregulation with a summary Why consumers suffer most in a free market - and what you can do about it. Their strongest argument is a graph on p.30 on titled Prices: A long-term decline. Consumer prices often fell after deregulation. But inflation-adjusted prices were falling for decades before, typically at a faster rate. The chart shows prices for airlines, local telephone, long distance, cable TV, and electricity from 1950 to 2000, which are roughly supportive of their claim. Is there a rebuttal to this somewhere? 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: I'm lying to you for your own good
Chris Auld wrote: Suppose that some behavior is affected by information provided by official sources. Suppose further that by distorting or withholding information the official may change behavior in a socially desirable manner (ignore credibility issues). Should the official engage in such manipulations? ... health officials deliberately over-emphasize the dangers of smoking? ... appears to be exactly what has happened (see Viscusi JPE 1990). Does anyone know of any literature on this or similar topics? If consumers can be considered roughly rational about such things, then my paper below seems relevant. This is basically a question of cheap talk equilibria, which is basically a commitment issue. Ex post, the official can gain by manipulating, but ex ante, the official can gain by committing to not manipulating. If you can commit to always being truthful, then people will believe what you say more, which is good on average. But if you haven't committed, then sometimes you can gain by lying. --- Journal of Public Economics, 85(2):301-317, August 2002 http://hanson.gmu.edu/bandrug.pdf or .ps Warning Labels as Cheap-Talk: Why Regulators Ban Drugs by Robin Hanson One explanation for drug bans is that regulators know more than consumers about product quality. But why not just communicate the information in their ban, perhaps via a ``would have banned label? Because product labeling is cheap-talk, any small market failure tempts regulators to lie about quality, inducing consumers who suspect such lies to not believe everything they are told. In fact, when regulators expect market failures to result in under-consumption of a drug, and so would not ban it for informed consumers, regulators ex ante prefer to commit to not banning this drug for uninformed consumers. --- 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: In Praise of Pay Toilets
Robert Book wrote: I think we are leaving something out here. Many people, or at least many Americans, seem highly offended at the notion of having to pay to use a toilet. ... such people have a strong disutility associated with paying for the toilet, to the point that they are willing to pay a little extra for the goods sold at the establishment. 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? Tim James wrote: Probably because of what some Burger King guy called the veto-vote. Let's say you have a group of four or five people, and one has to use the bathroom. They are in an area with a McD's and a Burger King, but the McDonalds charges $0.25 to use the facilities. Burger King, on the other hand, is free. Which are they more likely to stop at? BK. And the other four people are likely to buy some fries, a soda, whatever. A creative suggestion, but it seems to require a correlation between people who don't want to eat and people who want to use the bathroom. That sort of correlation is what makes your veggie burger example work. 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: Tax Leisure via Time Audits?
At 04:59 PM 4/26/02 -0700, Wei Dai wrote: On Fri, Apr 26, 2002 at 05:15:33PM -0400, Robin Hanson wrote: I apply the same logic to government. If I believe, as I do, that people often overestimate the value they get from government, I should fix that if I can by persuasion. What if you can't fix it by persuasion and everyone becomes worse off because of your advice? Or what if you do manage to persuade everyone, and then they blame you for giving them what they thought they wanted? Ex post, shit happens. :-) BTW, how do you make interpersonal comparisons of expected (rather than actual) benefits and costs, when people do not have common priors or the same capacity for logical reasoning? What if some (crazy) person believes that having a smaller government is worth a quadrillion dollars? How would that balance out with the (slightly less crazy) people who believe that a bigger government is a net benefit? When I'm inferring what it is that people think they want, I don't have to believe everything they say. I can also look at their actions. I can't see how anyone has a quadrillion dollar willingness to pay, as no one can afford to pay that much. 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: Tax Leisure via Time Audits?
I wrote: If the reason that government gets bigger as taxes become more efficient is that most people have a downward-sloping demand for government, and so buy more of it as the price gets lower, then it seems paternalistic of me to keep the price artificially high, just because my demand is less. I'd like to have a reputation as a neutral economic advisor, who will advise people on how to get what they want, even if what they want isn't what I would prefer them to want. Three people responded. Chris Coyne wrote: I would argue that you cannot be a neutral economic advisor. As an economist you are a technician who explains the consequences of various actions. But you cannot advise the best route to achieve certain ends without committing yourself to those ends. An economist hired to increase attendance at sporting events implicity commits himself to the ethical valuation that increasing attendance is good. It does not relieve the economist of the responsibility for having made ethical judgements to say that he has borrowed them from others. Therefore, by increasing government efficiency you are implicity agreeing to the ends (and likewise in working to increase sports attendance). Kevin D. Sachs wrote: Isn't government different from sports (although sports leagues are cartels, so...)? As governments grow, the market for wealth transfers and hence, rent seeking grow. You can make government internally more operationally efficient, but if that leads to government growth and therefore growth in inefficient rent seeking, then allocative efficiency suffers. As economists, aren't we interested in allocative efficiency gains? Wei Dai wrote: Government can get bigger if whoever is in control of the government forces the rest of the population to pay for it. Even if a majority of people want bigger government, the losses suffered by the minority can more than make up for the gains of the majority. ... Why would you want a reputation for being willing to advise people even when it's against your self interest, or your analysis of social welfare, to do so? I mean, I can see why you would want a reputation for always providing honest advice when you agree to do it, but why would you want to be known for never turning down a request for advice? What if a slave owner asked you how to improve the productivity of his slaves? Would you answer him? As an professional advisor hopeful, I want to pick a simple neutral-but-moral policy about how I give advice and stick to it. I'm not satisfied with just saying things that are true - I also don't want people to fear that I will shut up whenever speaking might hurt some group I favor over others. And the more exceptions and complications my policy has, the harder it is for others to monitor it and check whether I'm following it. So it must be simple. Among the simple neutral-but-moral policies about advice, I've chosen this. On average I think it good and moral to give people more of what they think they want, even when I think they are mistaken about what they want, and even when there are modest, but not enormous, negative externalities from them getting what they want. So even if I believed there were modest negative externalities from smoking, and that people were mistaken in thinking the enjoyment was worth the health risk, I would still give advice about how to lower the cost of cigarettes. Persuasion is the best way to try to overcome their mistakes, and if externalities are modest then the perceived gain to the people who want it should outweigh the harm to others. I apply the same logic to government. If I believe, as I do, that people often overestimate the value they get from government, I should fix that if I can by persuasion. So the issue here comes down to: how large are the net marginal externalities from most people choosing more government when it gets cheaper? The perceived harm within the people who favor more government must be less than the benefit, or they wouldn't favor it. So we're left with estimating how many people don't favor more government, and their perceived harm. And I estimate this group and its harm is too small to tip the balance. Wei asks about the case of advising slave owners about productivity improvements. So how large are any negative externalities on the slaves from improving productivity, versus benefits to both owners and slaves? Without any particular reason to expect them to be enormous, I guess I'd give the advice. Btw, if people could be persuaded, this is the form of government I'd advise them to choose: http://hanson.gmu.edu/futarchy.html 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
Tax Leisure via Time Audits?
Once upon a time income taxes were difficult to collect, because income was hard to cheaply monitor. So governments used less efficient taxes, and arguably this was a reason the size of government was lower. Today it seems that we can cheaply monitor the act of paying wages, and so income taxes are feasible, and government is larger. Income taxes are inefficient, however, because people respond by substituting leisure and home production for wages. But this inefficiency need only apply if we assume that we cannot cheaply monitor time spent working for wages. And as the technology of surveillance improves, it should get easier to monitor this. Perhaps in the future, the government will randomly check on each person ten times a year, and see if they are working for wages at that moment. Taxes would then depend the fraction of times that, when checked over the last few years, they were found to be working for wages. Of course to implement this each person will need a cell phone, beeper, or some way to be contacted at random times when they are working for wages. But since most people will have such things for other reasons, the presumption will be that the exceptions are doing it to avoid taxes, and so failure to contact will be coded as not working for wages. Anyone ever estimated the size of the deadweight loss from the income tax distortion? 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: Tax Leisure via Time Audits?
Fred Foldvary wrote: Real-estate taxes were not that difficult to collect, and rather efficient. I won't argue that here, as it isn't central to this discussion. And as the technology of surveillance improves, it should get easier to monitor this. The technology would need to keep ahead of tax-evading encrypted texts. To evade taxes, you need to appear to be working when time audited, but actually be in leisure or home production. How do encrypted texts help with this? Perhaps in the future, the government will randomly check on each person ten times a year, and see if they are working for wages at that moment. And if you are working at home? They will need a video camera. It is up to you to convince them you were working, otherwise they'll assuming you weren't. It would then be in your interest to install that video camera, if that is what it takes to convince them. 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: Tax Leisure via Time Audits?
At 11:33 AM 4/25/02 -0700, john hull wrote: Instead of surveillance schemes that sound a bit Big-Brotheresque, no offense, why not just take the forms already extant and merely switch hours worked for income earned? We know how to audit returns to check on the income earned. The question is how to audit time spent. We need enough data so that audits are feasible. Question: Would such a program necessarily imply flat taxation, instead of progressive, since income will not be reported but hours will? Tax as a function of hours need not be flat. 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: Economics of rank vs. Economics of the most money
Fabio Guillermo Rojas wrote: pretty ignorant. Is it only rank about people who exist, or do potential people count as well? Is it rank of money, power, or subjective utility? It doesn't have to be that complicated - how about rank among some small group? Like businesses trying to maximize market share at the expense of profits, or racial prejudice, where some employers might enjoy minimizing the wages of some workers, even if doing so has some tangible cost. 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 the question of how to weigh these different market shares. An employer wanting only to minimize the wages of workers of some race is also specific, though we have to distinguish that from them wanting to minimize the consumption of those workers, to minimize the regard in which those workers are held by associates, or to maximize their mating with potential partners who these workers might compete for. 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: mathematical assumptions (Physics Economics)
As an economist who was once a physicist, I have to say that there is quite a lot of difference between the kinds of math economics and physics typically use. Sure, they both use calculus, but beyond that the similarities are scarce. Differential equations across space and time dominate physics, but have almost no place in economics. In physics one almost always knows the specific form of a function or differential equation, while in economics one typically does not know the specific functional forms, and so must reason in terms of convexity etc., concepts that are foreign to most physicists. Math of maximization dominates economics, but has only a side supporting role in physics. When physicists do maximize, they almost never deal with non-interior solutions. While some basic concepts of information and probability are used in thermodynamics, economists deal with these issues in far more detail. 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: mathematical assumptions (Physics Economics)
Walt Warnick wrote: ... the business cycle behaves strikingly like an automatic control system that has a positive feedback loop and damping. ... The parallel goes further. ... a stable automatic control system involving continuous feedback can become unstable if that same feedback is, instead, sampled. Control theory is an application of single-agent decision theory, and since economics is basically multi-agent decision theory, I'd say control theory is closer to economics than to physics. Of course one often needs to know some details of the physics of the situation one is controlling, but usually control problems are dominated by decision theory issues, not physics issues. 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: Decision Markets
Dr. Alexander Tabarrok wrote: Another armchair economist made the news! Robin (Hanson) was mentioned in yesterday's (Sunday Feb. 10, 2002) New York Times in an interesting article about using experimental markets to generate marketing information. ... http://www.nytimes.com/2002/02/10/business/yourmoney/10TRAD.html Creating markets in order to generate public policy information is the subject of Robin's contribution to Entrepreneurial Economics: Bright Ideas from the Dismal Science ... www.EntrepreneurialEconomics.org It's nice to get press, but always disturbing to see how wrong reporters can get things. I'm introduced as giving the name decision markets to the Iowa Electronic Markets and to the marketing markets described. But I introduced the term to be specific to markets that estimate the consequences of decisions, rather than just markets that might somehow 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? :-) 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: Only Economists Tell the Truth?
On 1/15/02, Fred Foldvary wrote: Social science would be vastly easier than economists make it out to be if we could usually just ask people why they do things. But economists are generally skeptical of this approach, ... But perhaps a major reason why we don't rely so much on asking, is that economics is more concerned with the means towards goals than on why folks have the goals that they do. We presume the means involve economizing, and then there is really no need to inquire personally beyond that; Max(U) given constraints C does the job, perhaps too abstractly. There is the crucial intermediate task of figuring out what goals people do in fact have. Take the example of going to school. It is an open question what exact goal this serves. What is the goal of the people who hire other people who go to school? Sure school helps people succeed, but how exactly does it do this? Via things learned? Ability signaled? Contacts acquired? If we could just ask people things, and believe them, we'd just ask people who hire others and people who go to school why they do it and we'd be done. I tend to agree with most economists that this isn't a very reliable approach. But consistency seems to suggest that I should then also not much believe economists when they tell me why they write the papers they do. 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
Only Economists Tell the Truth?
I detect something of a tension in academic economics. Social science would be vastly easier than economists make it out to be if we could usually just ask people why they do things. But economists are generally skeptical of this approach, and so try to infer reasons from behavior, rather than from verbal explanations. Yet within academia economists seem to rely heavily on what other economists say, including about why they do things. We seem to largely accept economists explanations for why they take on certain research projects, for why they make the choices they do in modeling or regressions, and for why they reject or accept papers or people, etc. Do we in fact rely on economists' explanations of their own behavior as little as we rely on other people's explanations of their behavior? Do we really think economists are more honest than others? Or are we just inconsistent? 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: The Median Voter Theorem and Adoption Law
Bryan Caplan wrote: Yes, I think: people are basically afraid of someone taking their kids, and people are not in fact very comfortable with trans-racial adoption. But when people hear about kids being sent back to abusive natural parents, do they really say/think It's unfortunate, but on average it's better? I doubt many people have that reaction. As for trans-racial adoption, many people wouldn't want to do it themselves, but how many actually want to prevent other people from doing it? Yes, I'd say most people think protecting natural parents is better on average, and that many people want to prevent trans-racial adoption. 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
Efficiency of Academia (was: Austrians and markets)
An all too common view is that most markets work well, and government should leave them mostly alone, except the social area I most care about needs special attention and subsidies to make sure my side prospers. I know people who act this way about health, art, privacy, sex, and much more. This seems a good reason to be suspicious of our own intuition that the social area we personally care about, academia, is unusually inefficient. Confirming this suspicion, most analysis of the economics of academia is remarkably shallow. For example, people who wouldn't dream of citing the failure of their favorite computer product twenty years ago as strong evidence of the inefficiency of the computer market nevertheless cite the failure of their favorite academic product as evidence of academic inefficiency. Academia seems to have little regulation, low entry costs, intense competition, and reasonable property rights. For example, people can mostly reliably show that they wrote the first published paper with a particular argument. While there are network effects of production, these are not especially strong compared to other reasonable efficient industries. Without more specific evidence or analysis to the contrary, I have to conclude that as an industry academia *is* relatively efficient at producing what its consumers demand. But the big question is: what exactly is it that academia consumers demand? If academic consumers demanded truth, then academia would be efficient at producing truth. But that's a big if. It seems to me that academic consumers primarily demand prestige. I.e., they want to associate with people with demonstrated high mental abilities. Students want employers to believe that they are smart by association with smart academics. Donors, even the ideologically motivated ones, primarily want to associate with smart people. There are several different styles of demonstrating smarts, including math, verbal eloquence, mastery of vast amounts of details, etc. Different academic disciplines emphasize of these mental abilities. Folks who use one style of showing smarts often complain that those other folks aren't getting real stuff done (like learning truth). But it is not clear to me that any approach more consistently gets real stuff done that other approaches to showing smarts. Pete wrote: Economists as a group value smarts not necessarily being good. Cleverness wins over wisdom in the game we play. Most of the type of questions which attract the interest of Austrians do not lend themselves to the type of smart and clever analysis that so often impresses our peers. Instead, sticking to one's knitting and getting the details correct in a solid piece of economic history, or demonstrating a sense of judgement and wisdom on policy relevant issues seems to be more the hallmark of the best within the Austrian approach. 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: Disaster Raises Happiness, Trust
Fabio Rojas wrote: 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. William Dickens wrote: Well that (if the LA Times got it right) is a very odd fact. Why would we be programmed to make babies when we are under stress as opposed to when we are fat and content? ... it really seems that such an impulse would be counter productive. ... Perhaps our emotional/behavioral systems simply aren't sophisticated enough to parse out different types of arousal, but if that is true that should throw a lot of suspicion on the whole enterprise of evolutionary psychology since the mechanisms that are being posited concerning sexuality and social interaction are usually much more highly nuanced than this. One evolutionary psychology interpretation would be that when a group is suddenly threatened, its members are programmed to reassure each other of their affection and loyalty. Sex can do that. Babies may result, but perhaps other processes can reduce that effect when babies are less desired. 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: Does the stock market do better under Democratic or Republican presidents?
Chris Rasch wrote: Found this at http://www.anderson.ucla.edu/alumni/assets/news.html. Under Democratic presidents, the average excess return of investments in the stock market over the three-month Treasury bill is about 11 percent. Under Republicans, it is less than two percent; a nine percent difference. Examination of the risk-free interest rate produces another noteworthy result: under Republicans, the real T-bill rate is, on average, higher than the rate under Democrats by more than three percent. ..., the two researchers control for a vast number of macroeconomic variables, such as an indicator of recessions, the slope of the yield curve and credit spreads of bonds, that help remove the effect of business cycle fluctuations. Their surprising results hold: returns under Democrats are still, on average, higher. ... market volatility, a measure of risk, is actually higher under Republican presidents. A straightforward way to find out if speculators think this a real relation or a coincidence is to get market estimates of stock and bond prices *conditional* on the party of the next president. (The mechanics of doing this are described at http://hanson.gmu.edu/decisionmarkets.pdf) I predict that speculators would estimate a *much* smaller than 9pt difference, if any, between Republican vs. Democrat stock returns. 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: Externalities, Coase
Alex Robson wrote: I have been having a running argument with someone about externalities. My argument was that, even if Coasian bargaining were to take place, the externality doesn't go away - it still exists [in the sense that one person's action directly enters the utility function of the other person] - but that it's just no longer Pareto-relevant. The other person has been arguing that, once Coasian bargaining has taken place, the externality *no longer exists*. ... I recall getting stuck in this same debate before. My habit was the same as yours. It seems to be a theorist/policy person difference. Policy people say that there is this presumption out there that an externality implies a market failure, which justifies government intervention. So they do not want the word associated with situations where intervention is probably just justified. To a theorist, it makes little sense to define words in terms of whether there is a market failure, for the simple reason that whether there is a market failure is a complex feature of a larger context. You instead want common words to describe simple local features. You want to be able to talk about the major features of an economic situation without having to analyze it in enough detail to figure out if there is a market failure. 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
Why not refinance when interest rates rise?
Interest is the relative price of present vs. future assets. The higher the interest rates, the more future assets cost in terms of present assets. When you take out a loan you are buying present assets by paying future assets, and the lower the interest rate the better for you. Once you have taken out a fixed rate loan, however, you hold present assets and owe future assets, and it seems you should prefer higher interest rates. Thus when interest rates rise that should be good news for you, and when interest rates fall that should be bad news. So why do homeowners act like falling rates are good news, and why are they so much more eager to refinance loans when rates fall rather than when rates rise? Am I missing something? For example, if you borrowed $100,000 at 7% interest, owing $7000 per year forever, and then interest rates rose to 10%, then you should be able to get someone else to take over your $7000 per year obligation for only $70,000. So you should be able to refinance, make the same loan payment, and have $30,000 more equity in your house. 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: The ACLU and The Price of Free Speech
Yann Le Du wrote: I agree that many people highly value their ability to express their religion. But how much they value a constitutional guarantee to such expression depends on what they think the chances are that the government would actually try to stop them. ... can't a constitutional rule somehow encourage the existence of an educational system that fosters tolerance, and thus lead to a more tolerant society ? I agree that the rule is then useless, but is it wrong to say that a good rule is one that aims at becoming useless ? I suppose it is possible that the first amendment directly causes our society to be more tolerant of diverse religious expressions. But I'd want to see more evidence in favor of this theory before accepting it. 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: The Price of Free Speech ce of Free
Fabio wrote: ... colleges ... attracted donations ... because they offered a place where abolitionists could argue their case freely. ... Question: Could we use charitable donations to colleges and other cultural organizations be used a measure of how much people value various kinds of speech? This example sounds more like the price of advertising. But I have often wondered if we could measure willingness to pay for various freedoms, perhaps by just directly asking people. I doubt if most people would be willing to pay more than $100 per year for their own first amendment right to free speech. Probably $1/year is more the median answer for how much a person is willing to pay to have a constitutional protection against the government banning that person's speech. 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
Why Are Courting Signals Ambiguous?
People are usually not very direct when flirting, courting, etc. For example, people usually do not just say "Do you want to have sex?". Instead flirting and courting tend to be extremely complex processes involving much ambiguity, subtle error-prone interpretation, and complex analysis. It is interesting to make up armchair explanations for this ambiguity. 1) Plausible Deniability - people want to flirt without being caught flirting, or without clear evidence that can be reported to third parties. This attached people to consider "cheating," and unattached people to not look "desperate." 2) Social Ability Sorting - Ambiguity allows shoppers to sort for people with the cognitive and social skills to read subtle signals correctly. Such skills come from innate ability, and from more successful experience in flirting/courting/mating. 3) Confidence Sorting - Ambiguity creates a cost of misjudging interest. This cost is lower for those who are more confident that others will be interested in them. Such people are more likely to play. 4) Cost Sorting - Ambiguity makes courting take longer, a cost which might be larger for the attached and the poor, who are less desired. 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: Top 10 Economic Puzzles
One more big puzzle: 8) Why do people have fewer children as they get richer? David Friedman wrote: 4) Why do people agree to disagree? Haven't you published a solution to that problem? No what I've written just undermines one proposed solution. I have my own pet theory, as you have for many of these questions. And I very much like your creativity and coming up with theories to consider. But until we can convince more other people to favor our theories, we have to still call them open questions. 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: Top 10 Economic Puzzles
Fabio Rojas wrote: What are the big unsolved puzzles of economic empirical research? 1) Why do people live so much longer today than they used to? Granted technological change and increased wealth, why is this such a mystery? Yes, we should expect that richer people would want to spend more to live longer. People do spend more and they do live longer. But we have failed to find much of a connection between the two. We live 40+ years longer, yet improved medicine and sanitation can only seem to account for a few of those increased years. Nutrition makes a difference, but rich folks with good nutrition a century ago didn't live anywhere near as long as we do. 2) Why are some nations rich and others poor? Are you claiming that we have little or no knowledge about this topic? No, just that the topic is terribly important. 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: Top 10 Economic Puzzles
I would absolutely love to read a survey of economists asking them what the biggest puzzles are. Say make a list of 100 puzzles and ask a few hundred economists to rank their top 10 or 20. A paper describing such results would surely get cited regularly over the next century as luminaries try to summarize how much progress economics has made since the year 2000. 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: Top 10 Economic Puzzles
Fabio wrote: What are the big unsolved puzzles of economic empirical research? What economic phenoma seem pretty darn important, but have not been adequately explained by current economic theories? 1) Why do people live so much longer today than they used to? 2) Why are some nations rich and others poor? 3) Which kinds of consumption are more vs. less positional? 4) Why do people agree to disagree? 5) Why do the young ignore lifestyle advice from the old? 6) What exactly do people get out of voting? 7) What is the functional form of a typical utility function U($)? 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: Report A Bug, Pay More?
Krist van Besien wrote: ... reporting bugs ... signal ... one is a high volume user ... they should then charge you more for the next update, "prize discriminating" [2] producer will need to use other means then using information the customer voluntary discloses. After all, if the consumer finds out that reporting more bugs means paying more, he will most likely stop doing so, or do so anonymously. But how many customers would find out? And can companies really commit to not using such information in setting prices? And if the customer doesn't report the bug they are less likely to see it fixed. 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: Periodic redistribution
Bryan Caplan wrote: An obvious candidate is social insurance. And the obvious question about that is how well this mechanism compares to other social insurance mechanisms. This one at least is simple and clear, and difficult to corrupt. ... since the redistribution happens only every ten years, a person would need a bunch of bad personal shocks year after year to fall well below average land holdings. People who gained a lot of land were probably just low in ability and effort, not unlucky. I agree that the ten year period seems short for this purpose. I think the ancient Jewish tradition of "Julilee" redistributed every 50 years, which makes more sense. 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: patenting
Chris Auld wrote: On Tue, 10 Oct 2000, Robin Hanson wrote: If the monopolist equals the paper authors, and the product over which there is a monopoly has its primary value in producing this paper, then I think the journal should require that the algorithm be made available free to others, but only for the purpose of trying to reproduce the result. Is that feasible? I don't know. What do you think? 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: Assassination
Dr. Alexander Tabarrok wrote: Harry Browne ... said that the way a free society would handle war is to offer a prize to the person or persons who assassinated the leader(s) of the opposing country. ... say 500 million should provide plenty of motivation to guards, wives, snipers etc. How reliably could we determine who it was that actually did the job? I could imagine a guard fearing that UG Govt types would put together fake evidence so they could give the money to someone they favored. the only reason I can think of why we don't do this is that it would work so well that our own leaders would fear for their lives. That seems a plausible theory to me. 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: Imperfect Reasoning
Bryan Caplan wrote: People talk a lot about various irrationalities that they might fall into and ways they try to compensate for that. People talk about realizing that each person tends to think highly of him/herself, and trying to compensate for that. People "talk a lot" about this?! Maybe in a few odd sub-cultures. I can't recall any family member every talking this way, for example. Maybe you're meta-rational, but I can't think of anyone else who resembles you in this way. :-) How about this example. People seem to believe that they tend "stereotype" groups of people based on small possibly non- representative sets of examples, and consciously try to overcome this tendency. Overall, I'd say they do a reasonable job of correcting for this possible cognitive bias. 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
Imperfect Reasoning (was: reading recommendation)
Bryan Caplan wrote: At least on my reading, a lot of cognitive psychologists want to say more than "People occasionally reason imperfectly, and policy might improve on that." Rather, they are saying "We now know that human judgment is quite poor, and economic models that presume otherwise are kind of stupid." Of course, it depends on who you read, but I think this triumphalist message appears in Nisbett and Ross, Kahneman and Tversky, Thaler, Rabin, and others. These guys rarely stray into policy, but they clearly think their work is cosmically important. Bryan calls attention to the issue of how large or frequent are cognitive errors, suggesting that standard economic analysis is reasonable when they are rare or small. To me the central issue is instead human meta-rationality. If cognitive errors make workers sometimes miss-estimate the safety of a job, but workers realize that they might make such errors, then wiser-than-thou academics just need to *tell* workers that their particular job is more or less safe than they realize, and that should fix the problem. If people have time-inconsistent preferences, but realize this fact, then it can be enough to give them means to commit to future choices. If people can neglect possible ways a contract can go bad, but realize this fact, they can give arbitrators discretion to deal with this when settling contract disputes. In contrast, those who see large policy implications from imperfect reasoning tend to assume that people are not meta-rational. This may be true, but most of the evidence presented just show cognitive errors, and is silent on the issue of meta-rationality. 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: Imperfect Reasoning (was: reading recommendation)
Bryan Caplan wrote: ... If people have time-inconsistent preferences, but realize this fact, then it can be enough to give them means to commit to future choices. If people can neglect possible ways a contract can go bad, but realize this fact, they can give arbitrators discretion to deal with this when settling contract disputes. I think the reason they ignore it is that they think it is too far-fetched to be worthwhile studying. Have you got any empirical evidence to overcome that burden of proof? People talk a lot about their difficulty in committing to long term plans. They choose savings plans that they can't get out of. They take efforts to avoid being around tempting candy bars. People choose contracts that give arbitrators discretion. People talk a lot about various irrationalities that they might fall into and ways they try to compensate for that. People talk about realizing that each person tends to think highly of him/herself, and trying to compensate for that. How is this so far-fetched? 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: AIDS/POLIO-Not Much Econ
Alexander Tabarrok wrote: ... Furthermore as Robin pointed out there was "a claimed strong correlation between where CHAT was given and the earliest HIV cases. But this correlation is only described via some maps. This cries out for a more formal statistical analysis..." According to the Economist (Sept. 16, 2000) a "closer analysis" (don't know if this is the same as Robin's formal analysis) suggests that the correlation is spurious. Yes, I saw that and was curious to know whether the analysis critical is any better than Hooper's analysis. The article did grant that there remains the strange puzzle of the coincidence in timing of the various strands of AIDS all being transmitted from primates to humans within a close period, which I suppose that Hooper will emphasize when backed into a corner. The article suggests theories of population increases or the introduction of cheap syringes, both of which might explain why infection didn't happen earlier. But I'm not sure they can explain why we haven't seen more such transmissions since then. 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: AIDS/POLIO-Not Much Econ
William T. Dickens wrote: The article did grant that there remains the strange puzzle of the coincidence in timing of the various strands of AIDS all being transmitted from primates to humans within a close period, which I suppose that Hooper will emphasize when backed into a corner. The article suggests theories of population increases or the introduction of cheap syringes, both of which might explain why infection didn't happen earlier. I'm probably way in over my head here, but I thought that there was still a lot of controversy over exactly when and where AIDS first emerged in the human population. I seem to remember hearing it claimed that there were confirmed cases in humans before the polio vaccination campaign. I thought I've also heard it claimed that the wave of reports around the time of the vaccine could be explained by a reporting anomaly -- that there was a buzz in the medical community that caused people to recognize what they were seeing as a single disease whereas before that time the pattern of symptoms might not have been seen as a unique disease. -- Bill I'm admittedly in over my head as well, but it seems clear that there are several distinct strands of AIDS, which all seem to have been in humans since near the start of the epidemic. And since it is unlikely that a single primate or human was infected with more than one of these strands, there have to have been multiple transmission events from primates to humans. The issue isn't about reports of when people said they saw the disease, but about what we can now infer about who had what when. 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: Why not develop them here?
Keith Burbank wrote: Perhaps not stupidity, but ignorance. I am afraid I am ignorant of the hurtful effects of sending money to help the poor and the beneficial effects of letting the poor move to a place like the United States. ... I have more trouble understanding the desire to send money over there to help them, while also hurting yourself via not helping others even more by letting them move here. I didn't say sending money hurt them; I granted it might help them some. The fact that people try hard to move here suggests it benefits them. I'd appeal to standard micro intuitions to suggests it benefits us as well. 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: Morality and Immigration
Alexander Tabarrok wrote: I am giving a talk today in which I point out that virtually every moral theory implies open borders are moral and immigration controls immoral. ... Yet, ... the implications are clearly not accepted by most people - or at least most people are willing to ignore the implications. What does this tell us. 1) Moral theory counts for nothing, 2) We are still tribalist but are working away from that, 3) We have the wrong moral theory. 4) ? It seems even stranger than that - people do accept moral arguments when it comes to sending aid from here to there, though they clearly don't weigh very heavily on them, since such aid is rather small. They treat the two ways of helping differently, even though the way of helping others that they avoid would actually help them as well. 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
Bush vs. Gore
I got this email asking me to endorse Bush's economic positions. Anyone have a similar thing from Gore? Can an economist, as economist, favor one set of policies over the other as better economic policy? From: [EMAIL PROTECTED] Date: Sun, 27 Aug 2000 23:28:22 EDT Dear Colleague, We are writing to ask whether you would be willing to sign on to an economists' statement (included at the end of this email) describing and endorsing George W. Bush's economic proposals in this presidential campaign. Some of the economists who have already signed on include Gary Becker, James Buchanan, Milton Friedman, Anne Krueger, Robert Lucas, Robert Mundell, Myron Scholes, Anna Schwartz, George Shultz, Vernon Smith, and Finis Welch. It would be great if you could do it as well. If you are willing, please reply to this email with the message "I will sign the statement. My affiliation is _." (Your affiliation is for identification purposes only.) The economists' statement, along with the list of endorsers, will be posted on the web site www.Economists4Bush.org. The Bush-Cheney 2000 campaign may use the statement and the names in its advertising. Economists4Bush is a forum where economists who support Governor Bush's economic plan can exchange ideas and discuss how to promote his candidacy. Thanks very much. James Carter Co-Chair, Economists4Bush John Cogan Hoover Institution Ted Covey Co-Chair, Economists4Bush Lawrence Lindsey American Enterprise Institute James C. Miller III Citizens for a Sound Economy John B. Taylor Stanford University Robert Tollison University of Mississippi Economists' Statement on George W. Bush's Economic Plan We enthusiastically endorse the economic plan put forth by George W. Bush. It is based on conservative revenue projections and sensible spending baselines and will create more economic growth and greater opportunities for all Americans. His economic plan would: Strengthen Social Security by creating voluntary personal retirement accounts. Such accounts are an essential part of any credible plan to save social security. They help all Americans build wealth that can be passed on to their children. Cut income tax rates and leave more money in the hands of the people who earn it. Income tax rates are now especially high on people with low incomes. The lower a taxpayer's income, the greater is the tax cut as a percentage of income. Make scholarships available to families whose children are trapped in schools that do not meet minimum state standards. Such scholarships will hold schools accountable, give children better opportunities, and enable every child, regardless of background, to receive the education needed for high quality jobs in the new economy of the 21st century. Hold down the growth of government spending, through biennial budgeting, a constitutional line-item veto, and a bipartisan commission to cut pork-barrel spending. These budget reforms will help redirect spending toward our highest priorities-including a strong national defense, while continuing to pay off the national debt. Promote free trade around the world by restoring the president's fast-track negotiating authority and then using it to reduce trade barriers--including the complete elimination of agricultural export subsidies and tariffs worldwide. Combined with Governor Bush's support for tort reform, for regulatory reform, and for a monetary policy of low inflation and maximum sustainable economic growth, these proposals represent a comprehensive, pro-growth, reform agenda. ***** 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: The Indeterminacy of Individual Economic Actions
Brian Doss wrote: My intuition agrees with you, at least given a five year time-scale. That is, if the default was to stay in SS, and people had to send in some form to opt out, then within a few years most people would, even though they won't do a similar think regarding their companies plan. This, with the default-as-informative-endorsement theory, suggests that people trust their government less than their company. It's not necessarily an issue of less trust- it could be that people easily see that SS is a poor investment (low or negative rate of return) and thus decide to opt out. No doubt that some will opt out because of the trust factor, but I think given the amount of information available on social security, people would be making more informed choices than simply reacting to gut "I dont trust you" instincts. Let us say that "opt out" means that you don't get any benefits, and your contribution is reduced down to the level required to maintain the current inter-generational redistribution. This is what I had in mind, but should have said. 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: Extremists due to strong priors?
Fred Foldvary wrote: It seems you posit that people who reason will be inflexible, and those who don't will be flexible and go with the crowd, which won't happen to be where reason would lead. But under this theory, how do you explain that the people on the *other* side from you of the crowd are also inflexible? The concept of anchoring may explain such inflexibility An idea which is not grounded in fact but sounds plausible can easily get anchored. But I don't see why this would be more prevalent among those we think of as extreme. The difference seems to be that for meainstream ideas ... anchoring does not seem to be inflexible ... while for non-mainstream views ... their refusal to budge is more apparant and shocking. ... the movement would not seem like much when viewed from the center. I don't think you're taking the two data sources cited seriously. The observe a correlation between extremism and apparently objective measures of inflexibility. So either you have to say the data doesn't measure what it seems, or accept the data and try to explain it. 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
