Do prices exist?
Seriously - consider the use of a pay phone, or a hotel phone. It is often hard for me, and many other customers, to get completely accurate information on phone call prices. When it comes to phone calls, I've always missed some charge or tax, or there is change from when I last got the info. So: (a) how many other economic transactions have this feature, that it is hard to get an accurate price? (b) If there are many such examples, should we think about "fuzzy" prices or "prices-as-sets", or "expected prices"? A lot of basic micro assumes there is a single number "p". Maybe we should think of price distributions instead. Fabio
Re: Levitt article
> >The article discusses Levitt's research style: his tendency to ask > odd >but >interesting questions and be clever enough to be able to > test the >hypotheses with publically available data. It also has some > discussions >of >his career path and a little about his personal life. > Fabio > > Thanks, Fabio. So what's so bad about that? > David Well, the article's style and tone was a little odd. For example, as someone else pointed out, it seemed to imply that Steve Levitt was alone in the economic analysis of crimes and other non-market behaviors. It also has this "aw-shucks" attitude, depicting a wunderkind who was ignored by the profession until the profession was stunned and surprised by his wit. All in all, not the worst article ever written, combining the story of an interesting economist with some weird framing. Fabio
Re: Levitt article
> I couldn't access the article. Could anyone either copy and paste it to me > (privately so as not to distrub others) or perhaps just give me a briefy > summary? Thank you. > David Levenstam The article discusses Levitt's research style: his tendency to ask odd but interesting questions and be clever enough to be able to test the hypotheses with publically available data. It also has some discussions of his career path and a little about his personal life. Fabio
Re: Levitt article
> and on (including work by ICES colleagues)... On balance I would argue that > Levitt is indeed unusually clever (in the sense that he comes up with good > questions and also finds interesting natural manipulations to study them), > but that his particular approach to economic science is not novel: Vernon > Smith has been using it for decades. - Dan Correct me if I am wrong, but a big difference between Vernon Smith and Levitt is that Smith focuses mostly on a single area - experimental econ with a cognitive focus - while Levitt is a bit more wide ranging in his interests. Nothing wrong with that, but maybe that's a reason Levitt is so distinctive. Few people have the cleverness to consistently spot interesting puzzles and then have the tenacity to find data that can actually test hypotheses. Of course, the long term interesting question: will such puzzle solving lead to greater economic insight? I think so. In mathematics, such puzzle solvers are good at showing all sorts of cherished ideas are wrong and the evidence accumulated from such research can force people to think in new ways. Also, puzzle solvers are good at finding tricks that can be used to solve other problems. I wouldn't be surprised if Levitt's long term legacy is like that of Paul Erdos the mathematician who was notorious for solving goofy problems, but whose solutions forced people to rethink a lot of math. Fabio
Re: Levitt article
What I found interesting is that in economics, like in many other fields, there are "problem solvers" (people who figure out specific paradoxes, empirical facts, etc) and "theory builders." Levitt is a supremely able problem solver, a niche that didn't exist 30-40 years ago in the economics profession. Fabio On Mon, 4 Aug 2003, William Sjostrom wrote: > It is an annoying piece, even if it shows the public what Levitt is up to, > because it strongly indicates that Levitt is an outlier in the profession in > his interests. Forty years ago, he would have been a rarity in the > profession. Today, he is pretty standard. > Bill Sjostrom
Levitt article
NY Times magazine has a feature on Steve Levitt. Fabio
Re: Senators Denounce Policy Analysis Markets
> I help run a large non-profit colocation and hosting center for various > groups of which an implementation of this would fit perfectly with our > mission. > > If people are interested in trying this in a fully transparent method I am > willing to provide our resources and my time to make it happen. > > Thanks, > davidu Seriously - how hard is it to set up such a market? If indeed it can lead to better prediction of violent events, and if it is something that is relatively easy to set up, then why not? Could this be shut down by the Feds? Under what justifications? Fabio Rojas
Re: Senators Denounce Policy Analysis Markets
Could this not be an opportunity? Maybe a private sponsor could set up the market? Fabio On Tue, 29 Jul 2003, Robin Hanson wrote: > That sure looks like the likely outcome. We never really got a chance to > correct misconceptions about the project. (For example, it was never > intended to forecast specific terrorist attacks, but only overall > trends.) They didn't want to hear. > > At 01:10 PM 7/29/2003 -0400, [EMAIL PROTECTED]: > >More likely than not they'll say nothing and the story will quietly go > >away... conveniently relieving people like reporters and senators from the > >need to admit they spoke out about something they didn't have much, if > >any, comprehension of. > > > > > All of the criticism seems based on the betting on events, not on the > > > use of conditional markets for developing policy. Wonder what they'll say > > > when they figure that bit out > > > > > > > FYI, our DARPA project (www.policyanalysismarket.com) has just been > > denounced > > > > by two senators: > > http://wyden.senate.gov/media/2003/07282003_terrormarket.html > > > Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu > Assistant Professor of Economics, George Mason University > MSN 1D3, Carow Hall, Fairfax VA 22030- > 703-993-2326 FAX: 703-993-2323 > >
Re: Senators Denounce Policy Analysis Markets
On Tue, 29 Jul 2003, Jeffrey Rous wrote: > I seem to remember looking at the Iowa Electronic Market right before > the 2000 election and noticing that it had Gore winning the > winner-take-all and Bush getting a higher percentage of the vote. And > I remember thinking that this was just an indication of how close the > race really was. > > Am I remembering this correctly. Yes, that is correct. I remember making the same observation. I think the Iowa markets seem to do better than most pundits. Fabio
Re: California Recall
On Mon, 28 Jul 2003, fabio guillermo rojas wrote: > Ok - let's put game theory to the test: what is the normal form of > "declaring your candidcay for California governer-game?" What's the > predicted outcome? And what would Robin Hanson wager on the answer? > Fabio It seems that optimal strategy for Democrats is to choose one candidate and pay off the others not to run, and hope the GOP vote is split. The GOP candidates would like to do the same, but at least 3 candidates (Issa, Riordan, Simon) seem certain to run, suggesting that they think have a real chance in a 4 way contest (3 GOP's, 1 Dem). It doesn't seem that Issa stands a chance against a strong Dem (Feinstein, for ex), and his presence just splits the GOP vote. I'd venture that Issa can afford to be a political bad boy. Given that Issa's already started to run, why would any GOP sign up? They would have to fight Issa and steal centrist Dems. Very up hill battle. Fabio
California Recall
Ok - let's put game theory to the test: what is the normal form of "declaring your candidcay for California governer-game?" What's the predicted outcome? And what would Robin Hanson wager on the answer? Fabio
Re: fertility and government
> 1. Why is fertility higher in dictatorships? Do dictators like bigger > populations, and democrats like smaller populations? Does population > growth influence choice of government? Or is there a third factor that > affects both fertility and form of government? The question should be: what causes dictatorship and do these conditions encourage high fertility? Well, we have a lot of data and research on both questions. Financially stable nations with democratic institutions tend not to succumb to dictatorships, while nations that explicitly reject capitalism tend to evolve into dictatorships. Ok - what causes high fertility? Low wealth, low education and no access to birth control. The nations "at risk" for dictatorship probably are poor and do not have good mass education. Fabio
RE: Competition vs. Profits in the NBA
> Why do relatively similar endeavors have such different business models? Perhaps it is social learning. Baseball was founded in the 19th century with few rules, while the modern NFL was a product of the 1960's. So people may have had more experience with the sports business, which was used in desiging revenue sharing agreements. Any sport historians who can confirm or disprove this? Fabio
Re: Competition vs. Profits in the NBA
Robin said: > 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. > Can we model this behavior as resulting from rational agents, or is some > irrationality required to make such a story work? It doesn't seem to require any irrationality. Say insisting on an unfair game brings you benefits but has the cost that people may complain. It seems natural to assume that the costs created by complaint will increase as the unfairness of the game increases. If the "complaint-unfairness" curve crosses the "unfairness-advantage" curve, then people will be more more fair. Dictators, for example, have pushed the "complain-unfairness" curve down by ruthlessly hurting dissidents. In democratic societies, the costs imposed by complaints can be high enough to force people back to the crossing point of the curve. Now that you put it this way, I'd say it's a nice econ 101 problem. Fabio
Competition vs. Profits in the NBA
Playoffs between small market teams get low ratings, like the New Jersey Nets/San Antonio Spurs championship game. 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? Fabio
Re: Marketing vs. Economics
Your points are very well taken - there is most certainly a trade off in
computation and pay off. But let's ask ourselves: how do real world people
make this trade-off? Having just done some consulting work, I know that
organizations routinely make such computations. Before hiring a consultant
or devoting resources to solving a problem, managers frequently ask: will
the cost of finding the solution get me a pay-off? The managers have the
collective intelligence of the organization (other workers, books,
reports, corporate archives, etc) that will help them answer this
question.
But in other cases, framing the issue as a computational cost issue is
misleading because it assumes that actors will engage in an even harder
computation. Most beginning chess players seem to learn in a fashion
similar to a nueral net. For example, they aim to acheive a state
("win") by doing certain actions ("control the center"). If they fail to
control the center, they loose a bunch and then shape up. In a broad
sense, they are utility maximizers, but in a narrow sense they are not
doing anything resembling the actors depicted in, say, Krep's
Microeconomics text. They are in a feed back loop with their environment,
not engaged in an utility maximization computation.
Fabio
Re: Marketing vs. Economics
> The usual response to "someone ought to do X" is "why not you?". Introductory > classes must meet a lot of constraints. They must prepare those who will > continue in the tools that are actually used at higher levels. And they > must give the rest some tools they can actually use to understand some > phenomena around them. Well, first, I am not an economist. Nothing much I say will be taken seriuosly by economists (aside from my friends who have to listen!). I do produce models of rule base behavior, but since they aren't published in econ journals, they'll probably have zero impact in economics. That's ok. That's just the nature of academia. But second, rule based modeling can easily be taught to undergraduates. For example, the Schelling model, as I pointed out in another post, could easily be taught and yeilds simple but important results. > Yes, some people are having some success in explaining some kinds of behavior > with rules, but such papers have hardly taken over the journals. And I'm > somewhat at a loss to think of what particular rules I would teach GMU > undergraduates to take up half of an Econ 101 class. Of course one could > just grab material from current marketing 101 classes. But is learning to > market really that important? I brought up marketing to make a slightly different point. I wasn't arguing that econ classes should become marketing classes. I was arguing that people whose profession is to predict economic behavior seem to do perfectly well without utility maximization theory. A lot of economic behavior seems to be well described by rules rather than searches for optimal behaviors. Couldn't this be a sign that we should consider a fundamental shift in the construction of economic theory? Could it be the case that economic behavior is a continuum? Some large classes of behaviors are probably rule based while others are the result of searching to optimal outcomes. I think the most interesting possibility is to think of some situations as combinations of rules based and classical economic actors (my example was voting - politicians= rational, voters = rule based). Or how about stock markets? Professional investors are probably closer to the rational actor than mom&pop investors. Small time investors seem to go on gut reaction rules, at leas many of the ones I talked to. How would our understanding of stock markets change if we thought that there was always a mix of rational and rule based actors? Fabio > > > 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: Marketing vs. Economics
> I think rules are already a large part of economic reasoning. I mean, what
> are game theory and institutional economics if not rule based econ? Also,
Well, even these forms of reasoning, especially game theory are about
utility maximization. My point is that actors in games may say "screw
this! I'll use rules!" Consider chess. Even the very, very best chess
players don't search for maximial outcomes because they can't see what
will happen more than five moves ahead of the present move. Instead, they
seem to explore the next three or four moves and then apply some rules
developed from years of studying the game.
Now that I think about it, chess may be a great example of what I am
talking about. A traditional economic approach to chess would be to
delinieate all strategies and figure out the Nash eq of chess. This is
insane. Chess games seem to be a combination of rule behavior ("try top
control the center board," "castle early as you can") with a little bit of
search through a gigantic strategy space.
Fabio
Re: Marketing vs. Economics
Consider Schelling's work on residential segregation. He acheived a great deal of insight about racial segregation by carefully studying the implications of rule based behavior. The actors in his model are applying rules to situations rather than searching for optimal, utility maximizing behaviors. The same can be said about Axelrod's seminal work on repeated prisoner's dilemma. If we were to take Econ 101 seriously, Schelling's work is not real economics because it doesn't mathematically deduce a behavioral outcome from expected utilities. A mathematical proof showing that the Schelling model leads to segregated areas of the checkerboard would probably be very hard. Instead, Schelling did some experiments with an actual checkerboard, which have been corroborated with extensive computer simulation. This is unacceptable from the econ 101 perspective. My argument is *NOT* that we should dump the utility maximization approach to economics, but that we should recognize that you can get good results quickly by thinking about economic actors applying rules. An economic tool box with two tools is probably better than a single tool, especially if the new tool gives you purchase on interesting classes of problems. Fabio On Sun, 29 Jun 2003, alypius skinner wrote: > But would this really give us economic models more useful than the > simplified ones currently used? Taking more factors into account may make > the models so hard to maximize that there is no net gain in predictive > accuracy. Thoughts, anyone? > > ~Alypius > > > - Economists need to expand the repertoire of explanations. Economists > > should learn how to model rule-based behaviors and interactions with the > > same ease as they can calculate a Langrangian multiplier. Econ 101 should > > start with a speech saying how people sometimes apply rules to economic > > behavior and at other times they act like classical utility maximizers. > > Students will then learn marginal analysis and models that embody rules > > based behaviors. > > > > So there you have it. Some rambling thoughts... > > > > Fabio > > > > > >
Marketing vs. Economics
Some Rambling Thoughts by Fabio: In economics, we are taught to think of people as utility maximizers. However, marketers tend to be much more "cognitive" in their approach to human behavior. People buy stuff as a result of a very contextual decision process. In the marketing world, decisions to buy stuff are triggered by cost and percieved benefits, what other people are buying and what people remember about a product (as opposed to it's actual properties). Marketers also seem to take "bounded rationality" much more seriously than economists. A product doesn't get bought just because it has the lowest price or the best performance - it has to compete for limited space in the consumer's mind. That's why manufaturers pay for shelf space in stores - low price is often not enough. In principle, the cognitive approach is not incompatible with utility theory. You could easily argue that limited memory, habit formation and trendiness can be derived from a utility maximization approach (a la Becker or even Akerlof). However, it seems more simple to postulate that people have a set of rules that they apply to some classes of economic behavior. If you take the "cognitive" approach more seriously, then you might come to following conclusions: - Some behavior is utility maximizing in the regular sense if there are heavy costs to following "bad" rules. Buying homes, for example, would probably be pretty rational. Purchase of groceries probably is done with a bunch of non-optimizing rules. (this argument follows bryan's) - The outcome of many types social interactions should not be seen as an accurate refelection of preferences and incentives, unless the persons involved understand the costs of the their actions pretty well. The outcome should be seen as the state of a system where you have lots of interacting individuals applying certain rules. This is a kind of model I rarely see in economics (although there are well known examples, but it's not typical). - A lot game theory is silly. When there is uncertainty or imperfect information, it seems more plausible that people will apply certain rules instead of figuring out insane esoteric equilibrium conditions. - Some social systems seem to contain a mixture of "rational" and "cognitive" actors. Elections, for example, have lots of rule based people (voters) and a small, but crucial, number of rational actors (politicians). Voters apply all sorts of rules to voting (pro-incumbent, for ex) that are independent of utility maximizing, while candidates seem wickedly rational because they have a lot more at stake than a single voter. - Economists need to expand the repertoire of explanations. Economists should learn how to model rule-based behaviors and interactions with the same ease as they can calculate a Langrangian multiplier. Econ 101 should start with a speech saying how people sometimes apply rules to economic behavior and at other times they act like classical utility maximizers. Students will then learn marginal analysis and models that embody rules based behaviors. So there you have it. Some rambling thoughts... Fabio
Re: socialism historical?
Political labels are notoriously contextual. The passage of a few years renders many labels unintelligible. However, there is something more interesting to say. Political parties frequently co-op specific policies, which distorts our association of a label with a policy. Example: the two politial parties in the US have played football with balanced budget. Perot also made a big deal about. So what label would you use? Fabio On Tue, 17 Jun 2003, Fred Foldvary wrote: > --- [EMAIL PROTECTED] wrote: > > government money, as it predates socialism, probably doesn't rightly > fall under the category of socialism. < > > Does the meaning of socialism include a time frame, so that a policy that > is socialist after that time is not socialist before that time? > > What is "socialism," what year does it take effect, and why is the time > element involved? > > Fred Foldvary > > > = > [EMAIL PROTECTED] >
Re: Charity
I remember a discussion with Bryan, where he claimed that the average proportion of income donated to charity is about 1% or 2%. Say somebody makes $30K, that $300/year. I can easily imagine a religious person giving a few bucks a week to church ($2x52= $110) plus maybe some extra during fund raising drives at church and work ($200 total). So people are 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. Fabio On Tue, 3 Jun 2003, Jason DeBacker wrote: > Why don’t more people give more money to charity? > > If you asked someone if they would rather see $50 used to > feed a child for a month or on another month cable TV (or > whatever), I can’t imagine someone not saying that the child > should be fed. But almost no one gives $50 a month to > charity and many give that to watch cable television (or > spend it on other “frivolous” purchases). > > Why does this happen? > > A few possible reasons: > - The history of charitable money getting into the wrong > hands has scared people from donating. > - There is some kind of market failure (a la the story of the > woman being attacked while the whole block watched and no one > stopping it or calling the police). > - People really don’t care about helping someone else, but > are ashamed to admit that. > - People just don’t think about donating. > > Regards, > Jason DeBacker >
Re: Theory of Perverse Government Tangents (fwd)
Not sure if this made it... fabio > While it may appear that the Warnick Theory of Perverse Government Tangents > has thus been born full grown, it is nevertheless recognized that > improvements or amplifications may be possible. They are welcome. > Walt Warnick Sorry, Walt. You've been beaten to the punch: Read Meyer and Rowan's 1977 article "Institutionalized Organizations: Formal Structure as Myth and Ceremony" in the American Journal of Sociology. The point of their article is that you should think of a lot of bureuacratic behavior as a signal of legitimacy. The behavior may have no obvious benefit and it's done only to satifsy legal regulation, noisy interest groups or "public opinion." Since then, they've scaled down their claims (they originally claimed most behavior was a legitimacy signal) but the basic point is well taken, especially for public administration. Fabio
Re: Theory of Perverse Government Tangents
> While it may appear that the Warnick Theory of Perverse Government Tangents > has thus been born full grown, it is nevertheless recognized that > improvements or amplifications may be possible. They are welcome. > Walt Warnick Sorry, Walt. You've been beaten to the punch: Read Meyer and Rowan's 1977 article "Institutionalized Organizations: Formal Structure as Myth and Ceremony" in the American Journal of Sociology. The point of their article is that you should think of a lot of bureuacratic behavior as a signal of legitimacy. The behavior may have no obvious benefit and it's done only to satifsy legal regulation, noisy interest groups or "public opinion." Since then, they've scaled down their claims (they originally claimed most behavior was a legitimacy signal) but the basic point is well taken, especially for public administration. Fabio
Re: Personal vs. Political Culture: The Other Box
> Absolutely speaking, sure. But e.g. the U.S. and U.K. have been > *relatively* more sympathetic to these ideas for centuries. > Prof. Bryan Caplan I think my email got crunched, but if you are talking relative levels, then some Latin American countries have semi-decent political culture, but atrocious "private." For example, take Colombia - I'm no expert, but Colombia was fairly resistant to socialism and nationalization of industry (compared to other Latin American nations), but it suffers a great deal of crime and drug use. Fabio
RE: Personal vs. Political Culture
> Actually, these "scientists" are lumping together many more things than > you described, Dr. Caplan. You're too easy on them. Culture includes > - Z Gochenour Well, yes and no. Culture is terribly vague, but good researchers will narrow it down. Bryan seems to clearly focus on attitudes towards government, which is reasonable since he's interested in policy outcomes. In general, good social scientists who deal with "culture" tend to have reasonable working definitions that help them with their research. Some cultural research is purely attitudinal. For example, demographers might want to know when individuals have a preference for small number of children, and if such a stated preference has any effect on fertility. The issue is that "culture" as it is often used denotes the "stuff inside your head" that people in a group share. This might include: language, attitudes, religions, belief systems, emotions, facts, skills and all the cognitive machinery that underlies all conscious thinking. Therefore, it is simply to big and vague an idea. Best to do what Bryan does and focus on what interests you (in his case, attitudes towards gov't vs. attitudes towards individuals or yourself). Fabio
Re: Personal vs. Political Culture: The Other Box
> Now Pete Boettke asked me if there are any peoples with the opposite > combination: bad personal culture, good political culture. The best > Prof. Bryan Caplan Note that insistence on free markets, limited gov't, democracy, etc. is a pretty recent phenomena - so one should find few examples of *any* group that has good "political" culture. Fabio
Median Voter, Welfare State and World Power
Bullshit or not? Assumption 1: There is a trade off between welfare state spending and military spending. Assumption 2: The more you spend on military, the more a gov't can project power abroad. Assumption 3: The Median European voter prefers more welfare state than Americans, who prefer more military spending. Conclusion 1: Americans per capita get more military than Europeans. Conclusion 2: Americans per capita are more able to project their millitary across the globe. Conclusion 3: Preferences for welfare state drives the power imbalance between Europe and America. Fabio
Re: Lott
How would one estimate the accuracy of self-reports of self-defense? I know in medical research you can assess the validity of self-reported health by doing follow up medical exams or seeing if the respondent dies or becomes seriously ill shortly after the survey. Is self-defense just one of those issues where we'll never have decent data? Fabio On Wed, 5 Feb 2003, William Dickens wrote: > Which is highly suspect. It is computed by projecting the fraction of > people in a relatively small sample who say they used firearms > defensively to the whole population. Anyone who has ever worked with > survey data knows that error rates of a couple of percent (at least) > on all sorts of questions are common. Both coding errors and reporting > errors substantially increase (in percentage terms) the fraction of > respondents giving positive responses to questions with very low > fractions of positive responses. Think also about how people treat > surveys (for example the number of people who say they have been > abducted by aliens). I would bet any money that the true fraction of > people who use firearms in self-defense (brandishment or otherwise) is > a whole heck of a lot lower (an order of magnitude or more) than what > is suggested by Kleck's survey. - - Bill Dickens > William T. Dickens
Re: Questions about the stagflation episode...
On Mon, 3 Feb 2003, William Dickens wrote: > That is not what I meant. Of course there is. Its thermodynamics. > However, to an outsider it looks to impose about as much structure on > weather modeling as the notion of general equilibrium imposes on > macro-modeling - - that is that the devil is in the details, big > models can be less informative than the careful eye of a specialist in Thermo, by itself, is not an example of a paradigm for meteorology. A paradigm, in Kuhn's sense, is (a) a theory, (b) empirical observations that are predicted by the theory, (c) the acceptance of the theory by most practitioners in the field, who use the theory to resolve new cases. The empirical results are the blueprint for future research. It seems that thermo is simply a rule for constructing paradigms within meteorology - i.e., any paradigm must not contradict thermo. Kind of like any macro theory must have correct microfoundations. Of course, I can't say if your depiction of meteorology is accurate, but we can ask if macro satisfies (a)-(c). Is there currently a widely accpeted theory whose legitimacy rests on the successful prediction of a specific business cycle? Is that theory the blueprint for most work in macro? Alex says yes, there is a widely accepted theory, and "Brookings" Bill Dickens says no. But neither person has provided the "model achievement" - the business cycle or other economic phenomena whose successful prediction by the theory legitimizes is position as a dominant macro-economic theory. Is there any such empirical example? The stagflation episode overturned the old theory, but is there a new theory that uses stagflation as its main example? > >Some core parts of physics deal with complexity - how about statistical > >mechanics? Is there a macro counterpart to statistical mechanics? > > Not sure what you mean by this, but I suspect that is exactly what the > stochastic mechanics of the typical general equilibrium model is > about. Adressing the idea that complexity undermines attempts at econ's Kuhnian development as a science, I was simply pointing out that some parts of physics deal with "complex systems" but still have Kuhn style paradigms. Statistical mechanics is one such example: theory behavior gases - a complex system - has dominant theories. The theory of phase transitions might be another example. > But you miss my point. I'm arguing that the phenomena > physicists study at the core of the discipline are amenable to > sufficiently exact theory and exact measurement that you can have > decisive paradigm shifts driven by anomalous research results. > Economic theory is not as precise so measurement can't provide the > sort of strong evidence that one sees in core physics. Fair enough. Measurement definitely would preclude anamoly driven change because adherent of a theory could always claim that measurements do not capture the real story. [clipped a long discussion on recent history of macro] > economics. If you mean neo or new-Keynesians then the differences > between them and new-classicals (the heirs to 60s monetarism) is minor > compared to their differences with Austrians or post-Keynesians. But > so what? Post Keynesians and modern Austrians play absolutely no roll > William T. Dickens The point of the thread - at least my goal - was to assess Kuhn's model. If it is indeed the case that general equilibria theory is the paradigm for macro, then schools of economics that reject gen equi. would small time players in the field. So gen eq succeeds as a paradigm because Austrians and post-Keynesians are marginal. However, to satisfy Kuhn's definition of paradigm, there has to also be a "classic example" and future research has to be derived from the example. I don't know macro well enough to judge, but so far no one has given me an example such an empirical prediction. Altough we know stagflation led to the revision of a given research tradition. Fabio
Re: Questions about the stagflation episode...
On Sun, 2 Feb 2003, William Dickens wrote: > don't fit easily into Kuhn's categories. We're in the same situation > as meteorology (only worse because our subjects have minds of their > own). We know that weather systems are chaotic and therefore > unpredictable beyond very limited time frames. Same for economics. I'm actually not a Kuhnian on these issues, but I am trying to see how far Kuhn's theory goes in accurately describing economic research. Is it really true that there aren't reigning paradigms in meteorology? I should note that experimental econ seems to be developing in a very Kuhnian fashion. > the hallmark of modern physics. Sure there are physical problems where > chaos and complexity cause the same sorts of problems that economists > have dealing with the economy, but they aren't at the core of the > discipline the way they are in economics. Thus I think that a lot of Some core parts of physics deal with complexity - how about statistical mechanics? Is there a macro counterpart to statistical mechanics? > Finally, You and Alex both seem to want to classify the state of > modern macro as normal science. Personally, I think that the > differences between the different approaches within macro are much > more profound than either of you apparently do. Although everybody Is the difference between monetarists and post-Keynesians smaller than between post-Keynseians and Austrians? Austrians don't even accept equilibira theory as a starting point of economic analysis. Fabio
Re: Questions about the stagflation episode...
Well maybe macro *is* in a scientific state, from your description. Sticking to Kuhn's terminology, "normal" scientific activity occurs when scientists use existing models to solve outstanding issues. From one perspective, maco is organized around general equilibria, and the fighting is over the details of money, capital and labor markets, as you describe. The situation is similar in many branches of physics - people often accept very broad ideas (Newton's mechanics) and then squabble over details, which may seem huge to insiders, but small to outsiders. Also: I've never bought the whole social science is too complex argument for why economics and physical science differ. A lot of the life and physical sciences deal with complex systems - ever study turbulence theory? It's prettty friggin' hard and complex. Or ecology - lot's of interrelated parts. But we still consider them sciences. Fabio > in macro-economics. Everybody in main stream economic thinking about > macro-problems has a general equilibrium ! model with capital markets, > labor markets, and money markets in mind. The specifics of how some of > those markets should be represented and what the rationale is for the > representations used is the main items for debate. - - Bill Dickens
Re: Questions about the stagflation episode...
IIUC, macro was characterized by multiple schools but there was an outstanding critique that the micro picture was flawed or asbent, which served to undermine one popular school. The anomaly didn't serve to usher in a new macro, but unravel some old science, which still has adherents in a modified version. The new macro is still fragmented and there is no consensus yet. Sounds like an example of science as "muddling through." Or in Kuhn's terminology, macro is "pre-science" - a stage where there is no central idea providing coherence for macro. Fabio On Sat, 1 Feb 2003, William Dickens wrote: > None of the above. Macro was already fragmented and remained fragmented after the >70s. Hard core monetarism probably did pick-up some adherents due to the events of >the 70s, but the internal dynamic of the profession - - the relentless march of the >rational actor model into all aspects of the work of economists - - was probably only >speeded by these events. What stagflation did was convince people of the correctness >of the Friedman/Lucas critique. This set nearly everyone off on a much more >determined search for micro foundations for macro theory. I'll go out on a limb and >say we still haven't gotten there. Thus Keynesian theory is still taught to >undergraduates and it is what is behind most commercial forecasting models (though >they may have some new-classical tweaks here and there). This is why I don't think >this was a paradigm shift in the sense of Kuhn because there was no alternative >paradigm to take the place of the Keynesian model. Bill Dickens > > >>> [EMAIL PROTECTED] 02/01/03 02:06PM >>> > > What would be the most accurare description of the economic profession's > response to stagflation: > > 1) Everybody dropped Keynesianism and adopted a new model (monetarism?). > > 2) Macroeconomics broke up into competing schools, with different concepts > and theories. > > 3) Keynesians kept going, but new economists adopted one or more models. > > Fabio > > > >
Questions about the stagflation episode...
What would be the most accurare description of the economic profession's response to stagflation: 1) Everybody dropped Keynesianism and adopted a new model (monetarism?). 2) Macroeconomics broke up into competing schools, with different concepts and theories. 3) Keynesians kept going, but new economists adopted one or more models. Fabio
Economic anamolies and Kuhn
I'm teaching a course on the sociology of science and we read Kuhn's structure of scientific revolutions. FYI, Kuhn says that science is characterized by "paradigms" - most science works from basic assumptions justified by "model achievements." Scientific change occurs when anamolies - observations contradicting theory - undermine the "paradigm" and new ideas are adopted. Can someone provide me an example of an anamoly from the recent history of economics that led to a fundamental change in economic theory? Fabio
Re: Bubblemania
> Koushik Sekhar wrote:
> > Should markets be priced assuming that nothing will go wrong ("random
> > shocks") or should markets be priced assuming that something will go wrong ?
> Neither, obviously. Prices should reflect expected values - in this
> case, disasters discounted by their probabilities.
> Prof. Bryan Caplan
But isn't this a key issue? How does one figure out discount for things
like earthquakes, terrorism or other "disasters"? Fabio
European Soveriegnty
Is there an economic explanation of why Europeans seem to want to give up soveriegnty to the EU or the UN? Fabio
Re: Black coaches and the NFL
{Original post about Black NFl coaches having superior records}
> Of course, the numbers are wholly meaningless.
[This is not meant to be race baiting, but my response is offered only in
a spirit of constructive debate.]
I find this an interesting response. When Black job performance is below
white performance, then the numbers are supposed to be evidence of
employer's statistical discrimination justifying inferior Black earnings.
When Black job performance is above whites performance, then the numbers
don't really explain the nature of the job and somehow, whites superior
earnings are still the rational outcome.
Mind you, I find the explanation plausible - Black coaches may get stuck
with jobs enabling them to imporve mediocre teams - but should we not
be careful and try to avoid double standards?
Fabio
Re: Grade inflation - an easy explanation?
Also consider the possibility that many departments get budgets based on enrollments - and tough grades scare students away! Fabio On Tue, 14 Jan 2003 [EMAIL PROTECTED] wrote: > In the Rhetoric Department at Iowa instructors who tried to actually teach > writing and therefore generated many student complaints were offered out of > their contracts--that is, forced out--because the chair and assistant chair > didn't want to deal with student complaints. > > In a message dated 1/14/03 2:17:30 AM, [EMAIL PROTECTED] writes: > > > > >Has anybody tested the hypothesis that professors assign easy grades > >because it sucks up too much time? > > > >Consider the costs of tough grading - spending more time correcting > >papers, extra time spent arguing grades with students and the extra effort > >it takes to design challenging tests and assignments. > > > >Fabio >
Re: Grade inflation - an easy explanation?
> begin with? Why did grade inflation begin to occur > when it did (the 1960s??)? I doubt it was because > grading time increased? Actually, grading time increased around the 1960's - larger class sizes. Per student it's less but many more students. Also, it's my impression research requirements for tenure increasred around that time. So the cost of time went up at that time. Fabio
Grade inflation - an easy explanation?
Has anybody tested the hypothesis that professors assign easy grades because it sucks up too much time? Consider the costs of tough grading - spending more time correcting papers, extra time spent arguing grades with students and the extra effort it takes to design challenging tests and assignments. Fabio
Re: Babynomics
This is a great page! It's exactly what I was lookign for. Fabio On Sat, 11 Jan 2003, john hull wrote: > Fabio- > > You may profit from visiting the page of an old prof. > of mine at Oregon, > http://harbaugh.uoregon.edu/index.htm , specifically, > his "Nanoeconomics? Pedianomics? The Economic Behavior > of Children Homepage", http://nanoeconomics.org/ . > > I'm not sure what help it will be, but it's the best I > can do. > > Best regards, > jsh > > > __ > Do you Yahoo!? > Yahoo! Mail Plus - Powerful. Affordable. Sign up now. > http://mailplus.yahoo.com >
Re: Babynomics
Oh, come on!! Animals are economic actors only in the most general sense. > Animals are economic actors. > > as to: > "For example, at what age are children able to understand > the concept of interest?"- any baby knows that something is better now > then tommorrow. That's not the same as interest. Interest is the price one pays for having it now rather than later. When are people able to udnerstand that concept? > "At what age do children understand that exchange > can make you better off?"- if you read the popular media, it seems they > never do. > Jason Well, I was hoping for some better answers. Many somebody knew of psychological research showing when children are able to make tradeoffs and make other economic decisions. Fabio
Re: Babynomics
> > Question: At what can humans engage in economic behavior? Are there > > studies showing when children learn to trade ? > > Fabio > > Humans start to engage in economic behavior as soon as they are born. > Trade is not a necessary characteristic of economic behavior. The issue is > rather whether infants are consciously choosing their actions. It seems to > me that the genetic basis for behavior is the same in an infant as in an > adult. > Fred Foldvary I think this is a vacuous answer. By that logic, animals are economic actors - animals seem to choose their actions. Perhaps, then, my original question was vague. The question I have is: when do humans start to engage in *sophisticated* economic behaviors not found in animals? For example, at what age are children able to understand the concept of interest? At what age do children understand that exchange can make you better off? Fabio
Babynomics
Question: At what can humans engage in economic behavior? Are there studies showing when children learn to trade ? Fabio
RE: News Coverage and bad economics
> However, in my experience and reading, the probability of an amateur having > any significant new insight or theory in economics is close to zero. There > is especially something about the topic of money that brings out the > cranks. > Fred Foldvary I'd argue that amateurs have the most impact when fields are young. Amateurs are best at collecting data (like in astronomy) or pointing out the obvious before its formalized (a lot of early math). Fabio
Re: [Fwd: a non-profit oddity]
Jim said: >Opera houses have felt the pinch of a weakened economy. A significant >number of them have canceled works with the explanation that they were >substituting obscure works with more popular ones to increase ticket >sales. I don't think that opera ticket revenue is actually counter >cyclical, but I still think the phenomenon is pretty funny. Imagine >Warner finding out the economy is bad so they greenlight more summer >blockbusters. This isn't odd at all - artistic institutions subsidize less popular work all the time with profits made from "blockbusters." If the profits on blockbusters are not enough to cover these productions, then you might as well produce another blockbuster and not go into the red. Movie studios owners only care about profits, while opera owners consume both money and art. Fabio
Foreign aid - can money buy love?
Somebody said foreign aid might be justified if it increased the security of the US through supporting a steadfast ally. Has anybody ever figured out foreign aid trade offs? For example, What has the greatest effect on the annual number of American deaths due to political violence (wars, terrorism, civil wars)? - $1 million spent on the army/navy/etc. - $1 million given to the government of a foreign nation - $1 million spent on covert forces - $1 million spend on pro-American propaganda Another question: how much do you have to spend to get a dependable US ally? How much do you have to spend per person before 50% of a population is pro-US? What does the curve mapping per capita US foreign aid to % population pro-US look like? Does money buy love? Fabio
Re: University overhead
How sticky is the price for university overhead? Fabio On Wed, 4 Dec 2002, Rodney F Weiher wrote: > As a purchaser of university research, we often bargain with the PI on > overhead, who in turn must bargain with their administration. > > Rodney Weiher > > fabio guillermo rojas wrote: > > > Do universities compete over the overhead they charge? For example, when > > wooing senior faculty, is it ever the case that universities offer lower > > overhead for big projects? > > > > Fabio > > > > for <[EMAIL PROTECTED]>; Wed, 4 Dec 2002 12:32:46 -0600 (CST) > Received: (from daemon@localhost) > by midway.uchicago.edu (8.12.5/8.12.5) id gB4GJvCl007013 > for [EMAIL PROTECTED]; Wed, 4 Dec 2002 10:19:57 -0600 (CST) > Received: from julesburg.uits.indiana.edu (julesburg.uits.indiana.edu [129.79.1.75]) > by midway.uchicago.edu (8.12.5/8.12.5) with ESMTP id gB4GJu5C006992 > for <[EMAIL PROTECTED]>; Wed, 4 Dec 2002 10:19:57 -0600 (CST) > Received: from logchain.uits.indiana.edu (logchain.uits.indiana.edu [129.79.1.77]) > by julesburg.uits.indiana.edu (8.12.1/8.12.1/IUPO) with ESMTP id gB4GJro7014681 > for <[EMAIL PROTECTED]>; Wed, 4 Dec 2002 11:19:53 -0500 (EST) > Received: from indiana.edu (jimerso.soc.indiana.edu [129.79.103.5]) > by logchain.uits.indiana.edu (8.12.1/8.12.1/IUPO) with ESMTP id gB4GJtZq015788 > for <[EMAIL PROTECTED]>; Wed, 4 Dec 2002 11:19:55 -0500 (EST) > Message-ID: <[EMAIL PROTECTED]> > Date: Wed, 04 Dec 2002 11:19:56 -0500 > X-PH: V4.4 (uchicago), $Revision: 1.60 $@midway > From: Brian Steensland <[EMAIL PROTECTED]> > User-Agent: Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.0.1) Gecko/20020823 >Netscape/7.0 > X-Accept-Language: en-us, en > MIME-Version: 1.0 > To: [EMAIL PROTECTED] > Subject: Indiana > Content-Type: text/plain; charset=us-ascii; format=flowed > Content-Transfer-Encoding: 7bit > Status: O > X-Status: > > Hi Fabio-- > > If you still have questions about the Indiana department or Bloomington, > I'll be around all afternoon today if it would still be helpful for you > to talk to people here. > > Regards, > Brian >
University overhead
Do universities compete over the overhead they charge? For example, when wooing senior faculty, is it ever the case that universities offer lower overhead for big projects? Fabio
Re: Self-assesment vs. Rationality
> I presume you mean irrationaly optimistic self-assesment? I'd say quite > a lot. But then comes the > hard question: what policy implications follow from this conclusion? Yes, irrat self-assesment is a good word for it. Robin, I know you are a fan of taxing people for not using their abilities. How would you tax people here to make them more efficiently invest or make them have more rational self-assesments? A key free market principle is that investors better know how to spend money than the gov't. Should we be in the business of judging who is irrational? Fabio
Self-assesment vs. Rationality
I was chatting with the driver of my airport shuttle a few days ago and he was telling me about his investments. He dabbles in commodity trading - corn, sugar, etc - and he explained to me his strategy for beating the market. Simply put, he looks for trends in price or volume and tries to sell before the price drops. I then asked him if he knew that other investors have the same information and that profits might be competed away. He agreed with me and insisted that he was *fast* - he was simply faster at spotting the trend than the average investor. Here's the question: how much of investing behavior is based on self-assesment vs. rational expectations? In other words, when are investors driven by their perception that they can beat other investors vs. an assessment that an average investment will be profitable? Fabio
Re: Economists job market/search costs
> Having publications before you go on the market can make a very big > difference. At least 10 years ago very few people did and having > - - Bill Dickens An article in the Journal of Human Resources about 10 years ago showed that having 1 article had a big effect on landing a job, 2 articles a little more, and then you get diminishing returns. The JHR articled did quality of the journal counts a lot, too. The bigger the better. I'm saddened to hear that the norm of 4 years and yer out is breaking down. Engineering schools still maintain it to no harm. What has happened in the economics profession? Fabio
Theory of Teams
Occasionally, someone mentions the "theory of teams." Can someone please tell me what the economic theory of teams is? Fabio
RE: Journal response times
> friend had a paper go three rounds at AER and that took 3 years. I > wouldn't be surprised if a lot of bad papers get rejected quickly and > that would bring down the average turn around time a lot. That is indeed the case. Journals get many papers of low quality, and it's easy to reject the bad ones out of hand. And remember, most papers could be improved, and will go through a round of revision. > But that is > irrelevant if you are submitting a good paper that is eventually going > to be published. Then you care about the time to publish and its > disgraceful at nearly all economics journals. - - Bill Dickens > William T. Dickens It's not irrelevant at all, and it's not prima facia disgraceful, at least on the part of journals. First, it's not irrelevant because its a signal that your paper is being taken seriously, rather than a curt "this is lame." After having seen some lame papers in my day, this happens more than you might think. Second, don't blame journals - blame your colleagues. It is simply impossible to get decent reviews on papers. Take a non-hypothetical example - my recent article in Rationality and Society. This paper is an agent based simulation of an epidemic where agents engage in a very simple signallying game. Now how many of my colleagues could read that paper? Among sociologists, relatively few. Add into the mix that some might lazy, on sabbatical, have family issues, etc. Then it becomes very hard to get reviewers. That happened when I first submitted it to a health journal - nobody they knew was willing to read a technical model. I know one person whose paper was sent to *ten* reviewers. There were promises that the reviews would come in, but they never did. But what can the journal do? I know among sociology journals and some others, turn around times have been cut by doing the following: reject papers if they don't survive the first R&R; reject papers based on a single bad review; accept papers one only two decent reviews if they author has a good track record. I know economics journals have setup incentives, but in general it doesn't seem to have worked if the members of this list are to be believed. So let me conclude by observing that the Journal of Artificial Societies and Simulations is the fastest reputable social science journal I know. It's on line, has a cadre of dedicated reviewers and a very smart editor - so you think papers whiz through the review process. Some papers do appear "in print" in a month or two, but most take about 6 mo-year to see "publication." Why? Simple, humans are slow and the editors wants quality. It simply takes time to have people read through a paper and then have the author thoughtfully respond. While there is a lot of nutty stuff in academia, journals do the best they can given the constraints. If you want decent peer review and not have full-time paid reviewers, this is the best you can get. The only thing you can do to imporve the system is to review the papers you get, and encourage your colleagues to do the same. Fabio
RE: Journal response times
My original statement was not about about time to publication, but "turn around" time - ie, the time it takes to return a manuscript to author with referee comments. I opined that "turn around" time for well staffed journals was in the 3-6 month range for the faster social sciences, but much longer for other fields. As another poster noted, if you assume that accepted papers need at least 1 revision, you should multiply that by 3 and then you get the numbers cited in an earlier post - minimum 18 months. This was my estimate for the top journals, which get money for staff. Smaller journals have less money, which translates into a tired editor with grad student assistant, resulting in longer turn around times. Your experience of 14 months for a psych journal is in fact normal, and much better than fields like history, math or literary studies. Perhaps the absolute fastest is experimental physics, where claims of first discovery matter, and stuff is rushed to print in a month or two. Once you work in journal publishing, you soon realize how friggin' hard it is to get stuff reviewed and then 14 months to publication (or even two years) starts to seem reasonable. Fabio > I wouldn't if I were you. My submission to Psych Review with a revision > took 14 months from submission till it appeared in print. I've never > made it into print in a refereed economics journal in less than 18 > months and more typical times are 2 to 3 year. Oh yes. And the editor of > Psych Review was profusely apologetic for the refereeing taking so long! > - - Bill
RE: Journal response times
> "The data are average times (measured in months) > between initial submission and acceptance at various > economics journals in the year 1999." > > It seems that the long times quoted in this article > are something different than what fabio was talking > about. I have not read the article but the above Hmmm... seems like the data is censored. Need to sample rejected papers too. Ok, then. I feel better about my original statement. Fabio
RE: Journal response times
I stand corrected!! 21 months for AER papers? Hmmm... Fabio On Mon, 14 Oct 2002, Robson, Alex wrote: > Fabio Rojas wrote: > > "I'd say economics has a pretty decent turn around time." > > The following are data from a recent paper by Glenn Ellison of MIT (JPE, October >2002). The data are average times (measured in months) between initial submission >and acceptance at various economics journals in the year 1999. (The full paper is >available for viewing at http://web.mit.edu/gellison/www/jrnem2.pdf ): > > > American Economic Review 21.1 > Econometrica 26.3 > Journal of Political Economy 20.3 > Quarterly Journal of Economics13.0 > Review of Economic Studies28.8 > > Canadian Journal of Economics 16.6 > Economic Inquiry 13.0 > Economic Journal 18.2 > International Economic Review 16.8 > Review of Economics and Statistics 18.8 > > Journal of Applied Econometrics 21.5 > Journal of Comparative Economics 10.1 > Journal of Development Economics 17.3 > Journal of Econometrics 25.5 > Journal of Economic Theory16.4 > Journal of Environmental Ec. & Man. 13.1 > Journal of International Economics 16.2 > Journal of Law and Economics 14.8 > Journal of Mathematical Economics 8.5 > Journal of Monetary Economics 16.0 > Journal of Public Economics 9.9 > Journal of Urban Economics8.8 > RAND Journal of Economics 20.9 > > Journal of Accounting and Economics 11.5 > Journal of Finance18.6 > Journal of Financial Economics14.8 > > > Alex > > > > Dr Alex Robson > School of Economics > Faculty of Economics and Commerce > Australian National University > Canberra ACT 0200. > AUSTRALIA > Ph +61-2-6125-4909 > > -Original Message- > From: fabio guillermo rojas [mailto:[EMAIL PROTECTED]] > Sent: Monday, 14 October 2002 8:47 AM > To: [EMAIL PROTECTED] > Subject: Journal response times > > > > >Anyone have any idea why the norm in economics allows referees so much > > time to do a report? Why its so different from other fields? Is this one > > of those "soft" vs. "hard" field things? Its my impression that the > > physical science journals all want fast turn around on their referee > > reports. Anybody know what its like with Anthropology, Sociology, or > > Political Science? < > > I'd say economics has a pretty decent turn around time. I currently work > at the American Journal of Sociology and we usually get papers back > to authors in less than 90 days, often 60 days. My experience is that top > tier journals do better than second or third tier because they often have > prestige and staff, which encourage quick reviewer response. Most > sociology journals do much worse than AJS. > > As far as discipline goes, economics and political science is best because > their is consensus on what constitutes decent research and you don't have > to master every detail of a paper to assess its quality. The worst is > mathematics because you really have to understand every symbol in every > equation. Humanities are also bad - you don't have to understand every > word, but humanities professors are very unresponsive. On another > list-serv, I saw one math professor complain that a 5 page research note > had spent *years* at one journal. You can get similar complaints from > humanities professors. > > In the middle are engineering, sociolgy, education and other fields. Most > journals get stuff back from 3 months to a year and these fields are > "in-between" fast fields like economics and slow pokes like math. > > Fabio > > > > >
Journal response times
> >Anyone have any idea why the norm in economics allows referees so much > time to do a report? Why its so different from other fields? Is this one > of those "soft" vs. "hard" field things? Its my impression that the > physical science journals all want fast turn around on their referee > reports. Anybody know what its like with Anthropology, Sociology, or > Political Science? < I'd say economics has a pretty decent turn around time. I currently work at the American Journal of Sociology and we usually get papers back to authors in less than 90 days, often 60 days. My experience is that top tier journals do better than second or third tier because they often have prestige and staff, which encourage quick reviewer response. Most sociology journals do much worse than AJS. As far as discipline goes, economics and political science is best because their is consensus on what constitutes decent research and you don't have to master every detail of a paper to assess its quality. The worst is mathematics because you really have to understand every symbol in every equation. Humanities are also bad - you don't have to understand every word, but humanities professors are very unresponsive. On another list-serv, I saw one math professor complain that a 5 page research note had spent *years* at one journal. You can get similar complaints from humanities professors. In the middle are engineering, sociolgy, education and other fields. Most journals get stuff back from 3 months to a year and these fields are "in-between" fast fields like economics and slow pokes like math. Fabio
Re: Traffic School and Vehicle Insurance
> It seems to me, that traffic school makes everybody out to be a greater > risk than their driving record indicates. If risk is a primary factor in > an insurance company's rate determination, doesn't that mean that > traffic school makes everybody's rates higher than they otherwise would > Be? > Michael Giesbrecht Maybe the Median Voter is a bad driver and this is a wealth transfer from good drivers to bad drivers. Fabio
Re: Why does tenure exist?
> One possible explanation for tenure is that university departments > are to a large degree worker managed firms. One problem with a worker > David Friedman David's explanations make sense, but I'm empirically skeptical on two grounds: (1) Why is it that only educational worker managed firms have tenure? I could be wrong, but why don't kibbutzes have tenure? or Berkeley's bohemian co-ops? (2) I am beginning to doubt that "worker managed firm" describes the university. I'm not faculty (yet!) but from what I understand, the university administration has great power in the university. If they want, administrators can change standards for tenure and cut budgets and they control the physical plant, and other stuff. The "worker managed lable" applies just to the department. There is no reason the administration has to allow tenure to exist. Fabio
Re: Why does tenure exist?
> raise. Government subsidies and private charity give universities the > cushion they need to avoid being put out of competition by > performance-oriented for-profits. > Prof. Bryan Caplan While I share Bryan's skepticism, I don't buy his argument because universities/schools are the only non-government organizations that have tenure. Does the Ford Foundation or the YMCA have tenure? Or how about churhes? Do priests or rabbi's have a version of tenure? There may be de factor tenur, because no one wants to rock the boat, but these institutions have not evolved legal rights pertaining to tenure. Fabio
Why does tenure exist?
Seriously, why does tenure exist at all? I know the motivations for tenure, but why isn't it competed away somehow? I would like to know what economic process ensures its continued existence. Fabio
Re: Charity and Races as Complements
> or biking. But why are these activities combined so often? Why limit > who can give to a charity to who can run in a race, and why limit who > can run in a race to who is willing to give to a charity? Symbiosis? Charities need publicity, and staging a big race in the middle of town is one way to do it. 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. More symbiosis: Athletic events attract lots of healthy, young people into one place - lots of disposable income the charity wants. The participants also get to socialize with other healthy people with disposable income and who share similar values. So both sides benefit. Fabio
Re: Feral Children
Diego! Diego! The definitive source on outlandish, but possibly true facts is the weekly "Straight Dope Column" in the Chicago Reader, written by Cecil Adams. To sum up Cecil's column, yes, there a few authenticated cases of feral children, but most researchers doubt that any of these were raised by animals, a common misconception. Feral children remain stunted most of their lives, unable to acquire a vocabulary of more than fifty words. See the link below. Fabio Check out: http://www.straightdope.com/classics/a3_046.html On Fri, 6 Sep 2002 [EMAIL PROTECTED] wrote: > Maybe the topic of feral children is a bit of target from the armchair > list, but I am curious to see if someone could share their knowedge > about this. Do the stories about feral children -"lost or abandoned > children raised in extreme social isolation, either surviving in the > wild through their own efforts or 'adopted' by animals"- have any > truth behind them or are they just "old wives tales"? I guess the > question should be refined: how much truth is there behind > particularly famous stories of feral children (Amala & Kamala, Victor > the wild boy of Aveyron, Wild Peter, Kaspar Hauser, John Ssabunnya, > the Hessian wolf-boy, etc.)? Most importantly, what are the > conclusions and findings -assuming there is a general consensus- about > them? What are the consequences of extreme social isolation in > children regarding their abilities to develope complex forms of > reasoning and abstract thinking? Is there a critical period for > language acquisition? > > Diego > > >
Re: Median Voter and Sampling
Another MVT deviation: Personal bankrupcy law. I bet most voters would prefer more lenient laws. Fabio
Re: Median Voter and Sampling
Another MVT deviation: Marijuana decriminalization Fabio
Re: Median Voter and Sampling
> Elasticity and stickiness are different concepts. But in any case, > there is little evidence that policy preferences shift rapidly. When Ok, how about the 94 congressional election? Seems that voter preferences shifted little or not at all, but a bunch of conservatives got voted into office. Of course, they moderated after they got in, so maybe knee jerk MVT wins again but only in the long run. > Sure, there is a little of this. But again, I doubt this matters much. > The Supreme Court held off New Deal legislation a little bit for a > couple of years, but after 4 years it caved in completely. Is that a good example? The nation was in a depression and the New Deal was urgent. But also consider this: if you had polled people in 1931, would they have demanded all the alphabet agencies? I doubt New Deal was a response to the median voter, other than a vague "do something!" > politician match the median preference." Also true. In other words, > you seem to be giving the MVT an extra line of defense. As this thread has evolved, I've come to realize that my beef is not with MVT, but with applications. > My point, again, is that there are few such discrepancies! It's NOT > easy to make a list of issues and find deviations. Ok - I'll take some guesses: Affirmative action Adoption policies (compliments of B.C.) Pre-1996 Welfare policy The Somalia intervention (did any voters want that one?) Any increase ever in personal income taxes In New Jersey: The long time prohibition on self-serve gas stations > Knee jerk use is appropriate in this case. The theoretical objections > are weak, and the empirical evidence in favor is strong. Well, I'm not going to say the gov't passes policies left and right without voter approval, but I'm not sure the "knee jerk" MVT allows for lags in policies, or the many idiosyncrasies we observe. Fabio
Re: Median Voter and Sampling
> But I do have a naive question: Is there a median > voter for each issue, so that if there n issues, there > can be up to n median voters? Or, is there only one > median voter who satisfies the vector median as I > described above? Can such a person be proven to > exist, sort of like a voter version of the Ham > Sandwich Theorem? > jsh Well, sure. It's just the proof of the regular MVT, but done with multiple integrals. F Ro
Re: Median Voter and Sampling
> So what are you getting at? Since there is a series of elections, each > with a different median voter, the MVT doesn't actually predict that the > median general voter gets his way? Or what? > Prof. Bryan Caplan I think that applications of MVT are very, very sloppy. Four criticisms: 1. You seem to assume that policy responds quite well to public opinion. You assume that if opinion shifts, policy will quickly follow. I believe that policy is very "sticky" with respect to public opinion. To make it econo-talk, I think policy is not very elastic with respect to changes in the median voter. 2. Institutions are designed to prevent policy from being overly sensitive to public opinion. Ie, we don't have elections every day. We create rules that allow policy makers to resist every whim of opinion. Examples: rules for changing the constitution, judicial dependence on precedents, etc. In a sense, institutions play the role that contracts do in the labor market - set practices over some time period (ie, you've bought labor at price X and the employee can't leave just because the price is now more than X). 3. When people (ahem, Mr. B.C.) say "look - puzzle - people want X but we get Y" - the poll that measures opinion is probably a random sample of adults, or maybe voters. But as I've argued before, this might not be the relevant group. Maybe it's party activists, or party-rank and file. Policies may have select audiences and there is no puzzle until you show that the relevant audience does in fact strongly oppose a policy. 4. Cognitive limitations: I'm no expert, but my hunch is that many people are only willing to get worked up over a small # of issues - taxes, abortion, immigration, defense... and the dedicated might add their favorites like gun control or affirmative action. Therefore, it's no risk to screw the voter on an issue as long as you don't do it on certain big issues. Therefore it's easy to get a list of dozens of issues and find a descrepancy - what's so puzzling about that? So my beef isn't the MVT per se, but the knee jerk use of it. Fabio
Re: Median Voter and Sampling
> Any decent treatment of the MV states that it is the median *actual* > voter who matters, not the median *potential* voter. It's the Median > VOTER theorem, not the Median CITIZEN theorem, or the Median SENTIENT > BEING theorem. I still think this is true but still misleading. Consider how American politicians succeed - first, they must fund raise and win the favor of party big wigs; then they must must survive a round of primaries; then they must survive the general election. We have at least three successive rounds of MVT. This suggests that policies are probably tailored to one of these three audiences. Thus, I find that arguments of the form "survey X says people hate policy Y" really miss the point. For there to be a real puzzle, you have to show how policy Y is not preferred by party activists, primary voters and general voters. Ie, you have to understand how institutions partition voters into specific groups. > The real puzzle (which I take as further evidence of voter > irrationality) is that voters use optimal punishments for superficial, > trivial transgressions like saying one wrong word, but forgive > politicians for blatantly breaking campaign promises. Bush senior lost > after breaking his "no new taxes" pledge, but it was not a foregone > conclusion. > Prof. Bryan Caplan This is not a real puzzle to me. Political beliefs are much like other kinds of beliefs, you can have enormous disputes over details but you can't challenge fundamental beliefs in obvious ways. Ie, conservatives can't flaunt violation of low tax pledges, liberals can't flaunt abandonment of affirmative actions, etc. But you can argue endlessly over the small potatoes. Violation of symbols signals not being part of the group anymore. Fabio
Corporations and the Third World
> No doubt a major reason for the lack of equity markets and equity > financing in most third world countries. The US is almost unique in the > prominent role played by equity markets in providing capital for > business. Banks and other more hands on intermediaries play a much > larger role even in Europe and Japan than in the US. - - Bill Dickens > William T. Dickens Is the US equity market a historical accident, or is this somehow natural when the state doesn't sponsor banks like in Japan and Europe? Fabio
Re: Nations as Corporations
> Are state-enforced lawsuits really what keeps large multinational > corporations honest now? If not, then the concept here is to use > mechanisms similar to whatever large corporations now use. > Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu "Multinationals" come in different flavors. Those based in Western nations and that have assets that can be seized after litigation are probably kept in line by fear of lawsuits and jail terms. I have no idea how share holders keep faith in firms based in dodgy Third World nations. Probably some kind of trust, where paying out dividends and respecting voting rights signals that future investors will be treated well. But how often does this occur? Are these multinationals not based in 3rd world not trying to avoid shareholder rights? Fabio
Re: charlatanism
> > The real charlatans in academia are the many frauds who build > > their whole careers by getting their names put on coauthored > > papers to which they have not legitimately contributed. > That's a sort of embezzlement; but `charlatan' implies > that the *content* of the papers is fraudulent. > Anton Sherwood, http://www.ogre.nu/ It is a sort of charlatanry about the content of your career - you sort of imply you've done a bunch of original stuff by associating yourself with the successful. Fabio
Re: charlatanism
> Does anyone think, at least in the excerpts we read, that the article > attacked libertarian or libertarian-leaning economics as much as it attacked > economics generally? > David Levenstam It's typical to say that bad science is X, and my political opponents just happen to do X. IMO, it is usually easier to attack an economic theory in this roundabout way than just to confront the idea head on because you really don't have to understand what's going on. Example from my professional life: As is probably obvious, I'm not an economist - I'm a sociologist who takes economics very seriously and I sometimes use economic tools in my research. So I'm always in a position of explaining economic ideas to non-economists and I frequently find that people tend to avoid economic issues. For example, when I explain human capital theory to people, they seem horrified and obsess over whether their sacred cow - education - can be thought of as something as dirty as an investment. Instead of asking whether the idea is internally coherent and has empirical support, they go nuts over just the wording of the theory. Similarly, I find that these articles that trash economics because it is "psuedoscientific" do the same - they obsess over the wording (the use of math) rather than think real hard about the intuitions behind things. Of course, there is always bad research hiding behind equations - but the equations just express an idea - that can be debated - in a coherent way. Fabio
Re: Nations as Corporations
> 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? Fabio
Re: Why Compact Cars Identical?
> << Or to rephrase in economic terms, risk averse managers prefer copying > a proven strategy (low risk/low payoff) than engaging in R&D (high > payoff/high risk). > reduce drag coefficients to increase fuel economy. The summer I sold cars > (1997 at a Pontiac-Mazda-Jeep-Eagle dealer) one of the young salesman pointed > out that Mazda still used the aero styling, while everyone else had abandoned > it, giving the Mazadas a bit of an out-of-date look. > David Let me add that some have speculated that industries are chasing moving targets. Fads get set in motion, and firms play catch up until the next fad comes along. Easier than being original and persuading customers about your product. Fabio
Re: Why Compact Cars Identical?
> That makes sense for the cars all made by the same company, or which > share subcontractors. But Toyota, Honda, Subaru, and Ford all make cars > with virtually the same shape and layout. > Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Among management theory/organizational sociology types it's commonly believed that firms just copy each other once someone has innovated a solution to a problem (making cheap cars for the masses). It has to do with management fads. Why bother to come up with a totally different approach to small cheap cars when you can copy the competition and compete on labor costs and marketing, which are easier than coming up with new ideas? Or to rephrase in economic terms, risk averse managers prefer copying a proven strategy (low risk/low payoff) than engaging in R&D (high payoff/high risk). Fabio
Re: Why Compact Cars Identical?
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. Another note: isn't square and boxy a simple way to maximize space inside the car? Fabio
Re: taxi transitional gains trap
> Is there really a transitional gains trap? If a majority of NYers > seriously wanted free entry in cabs, wouldn't it happen regardless of > the opinions of cab companies? > Prof. Bryan Caplan Uh-oh. The Median Voter Theorem rears its ugly head again. Couldn't we just say that taxi cab owners are a small well organized group with huge incentives for the status quo, while NYers are a large group with weak preferences? Ie, why can't just invoke Mancur Olson here? Fabio
Re: cultural cues and queues
Alternative hypothesis: people will accept money only if other people are accepting money. Fred - next weekend, I want you recruit a person who will get in line before you. When you arrive, announce that you will give $20 to somebody who will let you cut in line. That planted person will then accept the offer. Then have your fake person make the same offer. I bet somebody will take the money. Fabio
Re: Public Opinion On Spending
> In other words, all of the main items in the budget are popular and > indeed if anything the public wants them to be larger. (Presumably views Question: could public opinion be endogenous? Ie, maybe there might be some status quo bias? Would people before the New Deal or the Great Society have approved of specific programs before they existed? Isn't it "folk wisdom" that many gov't programs start with promises they'll stay small (income tax, social security, medicaid) but once they exist, they become popular? Fabio
Re: taxi transitional gains trap
> Alex Tabarrok wrote: > > . . . In addition, there are serious constitutional > > issues involved in opening the market to free-entry because this would > > probably constitute a "taking." . . . Can somebody tell us exactly what the legal status of the medallions are? Does the state own them, rent them or is it like a driver's liscence where the has ultimate authority over them? Fabio
Re: take-in/eat out
> The same goes for mail order vs. brick-and-mortar stores. The Internet > crash makes it seem like mail order can't afford to discount 40% below > brick-and-mortar. But why not? It sure seems like a website must be > vastly cheaper to run than a physical store, especially when one website > can do the work of thousands of local stores. > Prof. Bryan Caplan You bring up a fascinating issue that was addressed in the SF Chronicle this past weekend - the difference between take-out/mail order/internet vs. eat-in/bricks and mortar. The journalist concluded that brick-and-mortar stores served an important economic function in many industries - warehousing that was sensitive to supply and demand. Take cars - why can't we just select a car over the internet, have it shipped to us and then save the money that used to go to local car dealers? Allegedly, it's because the manufacturer takes a great risk when they make a bunch of cars and pay for the storage costs. The auto dealer takes on the risk and makes it easier for the auto firms to concentrate on making cars. In a lot of industries "bricks and mortar" help spreads the risk of having lots of unsold inventory. The inventory is spread among many people who can then get rid of inventory more easily because they understand their customers and more easily figure out the clearing price. In exchange for bearing the risk, they get a mark up. The internet only firm must bear the risk themselves and jack up the price appropriately. You can save a little on less employees, but you have to absorb the cost of unsold inventory and its storage. These are *huge* costs. As far as the eat-in/take-out thing goes, I have some experience working in restaraunts. I have observed that the take out operation often requires at least one or two people to work the window and sometimes extra stuff like disposable plates, the actual take out window, the printing of take out menus, etc. Also, I've noticed that most of the price of food is labor and the ingredients, while site costs are spread out over years and make up a small portion of the price. Real world data: A taco from one of those trucks costs about $3-$4, while a decent mexican place will charge $4-$6. Reducing the dine-in *completely* only reduces the price by $1-$2. Not a gigantic savings. Ergo, restaraunt food is mostly labor and ingredients. Fabio
Re: New article on cooperation & the brain
> The part about students being socially isolated from each other and lacking > social experienceis interesting. Are there any studies that might confirm > this? I teach at a community college, so the students probabl mix with each > other less than they do at other colleges. If I recall correctly, I did > obsverve more cooperation when I played this game at a small liberal arts > college that I used to teach at. > Cyril Morong Interesting. I should note that isolated doesn't mean literally isolated (college students do live in dorms!) but that acheivement in college is mainly through individual effort, while sucess in business really is a team effort. Fabio
Re: New article on cooperation & the brain PD??
> I'm awfully sorry, what does "P.D." mean? > Thanks, > jsh P.D. = Prisoner's dilemma. Sorry. F
Re: New article on cooperation & the brain
> When I play the prisoner's dilemma in class, I see very little cooperation. I know one researcher who has repeated a trust game (not prisoner's dilemma) with many classes of students and groups of business men. He finds that students are remarkably untrustworthy and businessmen tend to give their trust quite frequently. He thinks that students are socially isolated from each other and have little experience in social worlds were trust is common, unlike business men. I wouldn't be surprised if there were a similar difference when you P.D. Can anybody confirm or reject this claim about students? Fabio
RE: Republican Reversal
> In the real world we have almost 600 in Congress, dealing with > innumerable matters more or less simultaneously. One of the things each > CongressCritter does is to decide what to do not about, say, farm > subsidies generally, but about SB1234, sponsored by Sen. This and Sen. > That, which goes through specific committees with specific members, at > specific times, during which times specific other things are happening, > and other things are reasonably foreseeable (to happen or to avoid). Let me add a very non-economic note to this discussion. The economic approach to studying policy outcomes is essentially some combination of median voter theorem and public choice - ie, how much can the politician screw the voter before getting fired? Some political scientists have taken the approach outlined the above post. They understand policy outcomes as the result of institutions, networks of politicians,lobbyists and gov't bureaucrats and exogenous events (Ie, the terrorist attacks, Enron) that frame policy. The focus here is on the stuff that happens between the voter and the politicians. I don't think these approaches are really in conflict but what they do is capture different parts of the political procss. The median voter thing seems to capture the broad outlines of politics. America won't turn into Sweden just cause Tom Hayden read Robert's Rules of Order one day. Public opinion and honest elections set the broad paramters for what politicians can accomplish. OTOH, the gov't does so much stuff that politicians have to depend on committees, lobbiests (sp?) and gov't agencies to get anything passed. How can a semi-comprehensible law on uranium mining or Alaskan fishing rights be passed without consulting a million committess, the GAO or affeced parties? Furhtermore, all sort of random events may abruptly change how people percieve a law and add to this mix ths interactions between politicans and voters. Remember, you can do anything you want - if you can convince the median voter it was ok! If you buy this second story, then it's quite easy to see how individual policies may deviate greatly from the median voter. Fabio
Why do people pick stocks?
If it is common knowledge that picking stocks is no better than using an index, then why is stock picking so popular? Ie, why do people accept lower returns just for the privilige of picking the stocks themselves? Fabio
Re: Autism, brain damage and cooperation
> Come on, Fab - pointing out examples of brain differences explaining > behavioral differences is hardly convincing evidence that brain > differences are the right explanation in this case. My point is that behavior is more than cost-benefit calculations with IQ as an intervening variable. My purpose in citing this kind of evidence is that behavior depends on cognitive faculties which are dependent on well developed parts of the brain. Damasio's book shows some evidence that brain differences *might* lead to behavioral differences. I'm not an anatomist, but I wouldn't be surprised if children's brains simply didn't have all the parts developed for correctly learning social behavior. > Yes, there are cognitive abilities with low g-loading, and memory is > one. But now that I think about it, I shouldn't have let you get away > with citing memory differences in the first place. Children in fact > seem to have much *better* memorization ability than adults in numerous > respects. > Prof. Bryan Caplan It's well documented that long term memory is nil for children less than five years of age (doctors call it "pediatric amnesia") and is very spotty until about 12. Maybe children can remember strings of numbers well in labs, but they can't remember things from a year or two ago terribly well. And it's this long term learning that's needed for socialization. Social behavior draws from a large pool of past experience, not the short term memory tested in laboratories. (Do a real world test: ask a 7 year old about how they misbehaved two years ago. If you get anything remotely accurate, I'll buy you lunch.) Also, while were at it, I think you overinterpret the G-loading thing. A G-loading is essentially a factor analysis of responses to a standardized test. Statistically, you estimate a linear model. G -> response to Question 1 G -> ... Question 2, etc. G is often called a "latent factor" that is *unmeasured*. See any non-economics statistics book (economists rarely use this and it's not in Golderger, Amimiya or Greene). Then you can test alternative models like G1 -> Q1, Q2, Q4 G2 -> Q3, Q5, etc. and do model comparisons. IIUC, the psychometric literature has found that the first model has a really good fit while other models have poorer fits for tests of abstract thinking. What is this G? It's a *construct* from the test, not a direct measurement of anything. Which means to assert one single process called IQ is really strecthing it. What you can safely say is that G is the dimension along which test responses vary. This dimension can be the consequence of a bunch of other things and you can collect data to test hypotheses about these more complex models: F1, F2 --> G --> Q1, Q2, Q3. My whole point is that obsessing over G might lead one to ignore the stuff that leads to G. In a lot of these IQ/behavior debates people seems to take extreme positions that IQ is this all powerful explanatory device, or that it is meaningless when it's neither. I really think that some people are more intelligent than others and that this matters alot, but explaining everything in terms of G seems a bit dicey to me. Fabio
Autism, brain damage and cooperation
> In any case, all of the deficiencies in children's brains you point out > more or less sound like extensions of their low absolute IQ. Not really. One listed deficiency is memory. That might be correlated with IQ, but it's certainly not the same as IQ. Analogy: a computer with a small storage capacity might have sophisticated software (analogy with low memory/high IQ). Real world example: Autistic children. Their behavior is described as "misbehavior" because they simply can't learn how to interact with adults. However, they can perform very complex tasks such as math problems and some autistic people have been able to score well on IQ tests. Abother real world example: In the book "Descarte's Error," a well adjusted rail road worker in the 19th century is injured on the job. He recieves a severe trauma to the head which results in localized brain damage. According to the author, the part of the brain which was damaged many scientists believe is responsible for producing emotions, which may conflict with detached rationalist thinking. Once the railroad worker recovered from his injury, he abandoned his job, started to consort with criminals and lived the rest of his life as a con-artist. As far as people could tell, he retained his cognitive abilities but his personality completely changed. My conclusion from such facts is that the ability to conduct normal social interactions is a combination of learning, IQ, percpetion, memory and other mental abilities. You really can't bundle them all together. Child misbehavior is not reducible to IQ, but might be a result of one or more of a deficiency in one or more of these mental abilities. A simple economic model really seems to leave a lot out. Fabio
Re: children and cooperation
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. So when a child has a desire, they simply don't have the biological capacity to think about consequences very well. I'd also add that maybe children become socialized well by misbehaving. It's a weird idea, but it's a common observation that children are always "pushing the boundary." For example, children will test the "keep your hands to yourself" rule by moving their finger very close to your face and say "I'm not touching you!" Although it's annoying, this behavior will teach kids (via punishment) that people don't want to be touched and they need some personal space as well. Without the misbehavior, they never really learn the improtance of personal space. I'm sure that much of the unspoken rules of personal interaction are learned in this fashion (misbehavior-punishment cycles). Fabio
Re: double vs. single entry
On Thu, 27 Jun 2002, William Dickens wrote: > Does anyone answering here know any accounting or are people just guessing? Just enter "double entry accounting" into google and you can easily find some answers. It hard for us modern people to understand, but simply accounting techniques can make a world of difference of semi-literate people like medieval Europeans. Bryan asked about negative numbers, and as any historian can tell you, it took a long time for negative numbers to become widespread. Fabio
Re: double vs. single entry
> What's wrong with negative numbers?! > Prof. Bryan Caplan Bryan - it's not mathematical. It's book keeping. Keeping the two columns separate is simply easier for finding mistakes. With spreadsheets its easy, but if its teh 13th century and all is done by hand, then it makes a big difference. F
Re: double vs. single entry
Double entry means that you have one column for money going out of an account and one column for money going into an account. Thus, it very easy to keep track of cash inflow and outflow (just add up the columns). With single entry, there is more error because you mistakenly count a debit as a credit. The advantage is huge when you have to do things by hand. It also helps you track errors more quickly. Fabio On Thu, 27 Jun 2002, Bryan Caplan wrote: > What exactly is the advantage of double-entry accounting over > single-entry accounting? > -- > Prof. Bryan Caplan >Department of Economics George Mason University > http://www.bcaplan.com [EMAIL PROTECTED] > > "He wrote a letter, but did not post it because he felt that no one >would have understood what he wanted to say, and besides it was not >necessary that anyone but himself should understand it." >Leo Tolstoy, *The Cossacks* >
Re: Republican Reversal
> These are all good comments on the Republican reversal. Thus, I take it > that the list agrees that democracy works pretty well in reflecting the > wishes of the voters. > Alex I'd say democracy reflects general trend in voter opinion pretty well, although some policies may be way out of whack. For example, who would argue that either Bush or Gore is very far from the median voter (except on abortion)? Or that conservative states like Idaho tend to have more conservative policies? Fabio
Re: Not such a fantastically entertaining paper
Let me also add that the basic assumption of Frey's article is also wrong - the assumption that editors slavishly follow referee's. My take is that it's editors choose referees, so the editor's really do choose the articles because they choose referees and indirectly choose the outcomes. Fabio
Higher Education Norms
Over the last couple of years, colleges have been defecting from long held norms over financial aid and admissions policy. One example is the switch from loans-only financial aid to direct grants by some elite colleges. Another is dropping the need-blind admissions policy and letting ability to pay influence admissions. What accounts for this breakup of old norms in higher education? My understanding of higher education history is that meritocratic ideals became the standard by the 1960's or so, and that a number of measures were implemented to keep this standard (price discrimination via financial aid). So what prompts the change? Of course, maybe the more basic question was: were these norms followed by many colleges at all? Maybe recent events reflect long standing state of higher ed. that we haven't recognized. Fabio
Re: In Praise of Pay Toilets
> Plausible, but then the question is: *why* do people have a disutility > of paying for toilets? Does this fit into any pattern of the sorts > of things people have a disutility of paying for? As noted earlier, people did pay for toilets before and it is common in Europe. So it seems we are trying to pay for a rather specific fact, not a general disutility for paying for toilets. Let me also add a peice of anecdotal evidence that retailers offer free toilets to attact customers: A recent NPR show interviewed Hong Kong residents who said they would congregate in McDonald's in the 1960's becuase it was the only place open in the evening that was public, you could hang out and use the facilities. Eventually many such hang outs popped up all over Hong Kong. Fabio
Re: In Praise of Pay Toilets
Some ideas: 1. Zoning. Maybe pay toliets are the NIMBY victims. Most people admit they might be nice to have, but I can imagine businesses not wanting them in front of their shop or street corner. 2. Most pay toilets sit on the street. I can also imagine them being a victim of urban planning - city gov't types simply hate them because they don't fit into their view of what cities should be like. 3. They aren't as profitable as you think because people can frequently use quasi-public restrooms such as fast food places, hotels, gas stations, etc. Ie, there are real competitors. Fabio
