> A pure market economy exists where all economic activity is voluntary for all
> persons in the economy. There are neither restrictions nor imposed arbitrary
> costs on peaceful and honest human action.
I am trying to think about cultures that don't have the economic
institutions that Wester
Imagine that an alien arrives on planet earth and asks you "what
is a market?" What kind of economic system would count as a "market"?
I know this can be a sticky question, but how would you describe the
economy of Russia or China, and why doesn't it count as a market? Is it
just the lack of the
> I hope that answers your question Fabio, without too
> much prattle.
> Best wishes to all!
> -jsh
I think you certainly answered my question and it seems that the
anti-free traders employ unusually low standards. And of course,
they seem to jettison basic economic thinking.
I think the real
> I recently visited a web page by a political scientist
> that seemed to suggest that NAFTA was a failure. I'd
> -jsh
Could you summarize the evidence he/she presents?
Fabio
Why don't you email Bryan Caplan, this list serve's moderator and founder?
He's published stuff on exactly these issues. Fabio Rojas
On Sat, 20 Apr 2002 [EMAIL PROTECTED] wrote:
> Is there a website that might have data on the opinions of economists on general
>questions like the role of gover
> The effect of this is to draw students away from math, science and
> economics and towards the softer social sciences. Similarly, within
> departments students are drawn away from harder graders and towards
> softer graders. Budgets go where students go! Thus grade inflation
> causes a *
> 2) To attract good thinkers to become historians,
> schools must keep the wage high enough to compete with other
> disciplines and occupations that require intelligence. Therefore,
I think this is a big part of it. Compeitition to get into
the best humanities programs is as fierce as law sch
> Most observers have always been very surprised that there never was a
> big demand for socialism in the United States - even at the height of
> the depression. The New Deal was very much driven by the Executive
> branch not by Congress - thus I think things could have been quite
> differ
> Since grades can't get any higher than an A, doesn't
> grade inflation merely squeeze out information
> regarding graduates as the grade scale gets compressed
> at the high end? Additionally, since it is unlikely
> -jsh
I'll look this up on ERIC (the education research data base) to
see if wh
> orientation. Thus, as we become wealthier as a society, we are more able
> to support children who pursue such uselss topics at the graduate
> level.<
>
> Why, this could mean that the wealthy feel some sort of urge to preserve
> civilization!
>
> Michael
You are a very deluded person if you
> A major puzzle: After a lot of taught about the watering-down of the
> degree, the article observes that average time to completion has risen
> from 4 years to 10 or so. At least on the surface, this sounds like
> standards are a lot tougher! This is just what you'd expect to happen
> in a si
Talking about game theory movies - does anyone remember if the
game depicted in Beuatiful Mind accurately capture the Nash eq?
Fabio
> David Fincher's new movie *Panic Room* may be the finest artistic
> expression of game theory around. Beautiful illustrations of commitment
> problems, subgame
> My just comment is that we should not use "irrational expectations"
> term in this discuss, because nobody, for sure know the
> difference between rationality and irrationality of human beigns.
> regards;
> santosh
I'm just using the phrase "irrational expectations" in a sense similar
to how m
Is there any good writing on the role of emotions in entrepeneurship?
Basically, I've come to wonder if what distinguishes entrepeneurs from
the rest of us is that they have irrational expectations of what their
business can produce. Think about it this way. Entrepeneurship is the
activity of exp
> >why is such a large fraction of state funding based on sales taxes?
> I notice a lot when I pay income tax; I am only, and only occasionally,
> mildly annoyed when I pay sales tax.
> Michael
Indeed. I've always thought that economists should develop a cognitive
taxonomy of taxes. What kinds o
Why do older executives desire MBA's or B-school Ph.D.'s? They don't
need to signal brains because they have a track record, and they
won't learn much useful stuff. It can't terribly useful credential
when you are in mid or late career. Any takes? or is this just
consumption on the part of execs?
Hypothesis: John McCain. Campaing reform has been a favorite to talk
about but not to pass for many years. I think that when you had
a charismatic cadidate adopt an issue, it can really change things.
I bet a lot of congressmen saw little John McCains in their night mares
if they opposed campign
With Lott and his critics, the issue is that two theories can produce
the same empirical results. In this case, Lott's critics, as cited
in the article, may have the upper hand because they have a simpler
explanation: the presence of "shall issue" laws coincides
with low population, low crime are
Maybe the real puzzle is under what conditions do people maximize
rank or total stuff. F
> It doesn't have to be complicated, but it does have to be specific.
> A business trying to maximize market share is pretty specific, though
> with multiple product lines and sets of consumers there remains
It doesn't have to be that complicated - how about rank among
some small group? Like businesses trying to maximize market share
at the expense of profits, or racial prejudice, where some employers
might enjoy minimizing the wages of some workers, even if doing
so has some tangible cost.
Fabio
>
This week's Economist magazine reported an experiment where subjects
could pay to decrease the income of other subjects in the experiment,
which they did with some frequency, although it didn't increase their
income from the experiment. The article's author suggest that this
was evidence for peo
I understand that some toll roads charge more during rush hour.
It's not as sensitive a mechanism as Fred suggested, but it's
not bad. Fabio
> I was looking for, but such a system would be hard to implement. Can you
> think of an existing analogous system in a similar market?
> Would there be a
To be more precise, many non-vegetarians eat a few bugs (worms in
tequila in the US, chocolate ants are popular some parts of Latin
America, etc).
Let's take chocolate covered ants. They can be bought in wafers for
$2 a wafer, some web sites list them for ten cents an ant. So it can't
be that t
> be informative for decisions. Anyone want to give odds that I'll be
> able to keep the term meaning what I want it to mean? :-)
According to Stigler (the statistician, not the economist) almost
every "named" scientific term is in error. So I'd say the odds
are huge that your name will be inco
But how many restaurants have such long lines for a reservation? My hunch
is that most restaurants don't have any long lines, some have long
lines but you can easily get a reservation and there is a small fraction
like The French Laundry where you have to wait in line so you can wait
in line!
My
Actually, I've dealt with this situation and it's quite different than
the drink at a bar. When you hire a (decent) carpenter, they will
tell you what additional labor cost, should it be required. A reputable
contractor will have this written out before hand, and you will
have signed an agreement
Are you sure this is what happened? I'd guess that the woman
expected a range of price, and was shocked when when she found
out the drink was $13.
> (1) Where else do people buy things without knowing the price first?
> (I've been thinking and have been unable to come up with any examples.)
When faxes were invented, people got pissed off when their valuable fax
line was used by unsolicited advertisements. Thus, in many places fax spam
is now a legal offense punishable by a large fine for each unwanted faxed
message.
Ie, the conflict was resolvd simply by having the practice
banne
I'd suggest getting some life expectancy tables out. You can readily
calculate these things one you have a life.
fabio
On Fri, 25 Jan 2002, Bryan Caplan wrote:
> Gray, Lynn wrote:
> >
> > It would seem to depend on the age of the person at the time of the move.
>
> Maybe so, maybe not. We c
"Build-up" has two meanings in this context. 1)Politicians could
send a series of signals to win small groups of voters. 2) Politicians
could send a series of signals to large group of voters who need
repeated re-assurances that the politician really means what he
says. Ie, build up of votes vs.
You are misinterpreting the function of these little issues.
Little issues don't "build up". Little issues tend to be signals to
certain constituencies. For example, nobody has ever lost the vote due to
rap music, but Clinton in 1992 signalled to many in the democratic party
that he wouldn't be h
> fabio guillermo rojas wrote:
> >
> > I don't think you should focus so much on the median voter theorem.
> > The logic of median voter theorems is that politicians offer
> > policies that closely resemble the median voter's desires. This assumes
>
I think the median voter has the following preferences concerning
adoption: same race parents > parents different race > no adoption.
Bryan's point is that adoption workers seem to prefer:
same race parents > no adoption > parents different race.
The MVT would predict otherwise. I claim that ca
I don't think you should focus so much on the median voter theorem.
The logic of median voter theorems is that politicians offer
policies that closely resemble the median voter's desires. This assumes
that politicians have direct influence over the policy in question.
My impression is that this
Comments below:
> > Theda Skocpol argued that revolutions tend to happen when
> > states are simultaneously besieged by internal rebellion and
> > losses in the international arena. (Think the Bolshevik revolution)
>
>
> Doubtful, i think cost benefit analysis is more appropriate.
> Tullock wr
While there are fluctuations in the demand for certain college
degrees and these might be tied to the business cycle,
the demand for certain college degrees tend to follow long term
trends. Since the 1960's, college freshman have become more
vocationally oriented instead of idealistic, according
> fabio guillermo rojas wrote:
> > Why is local news done by television stations when most
> > other local programming (soap operas, game shows, talk shows)
> > is contracted out? . . .
Talk shows are mixed: Oprah is done by a Chicago tv station but
is syndicated
Why is local news done by television stations when most other
local programming (soap operas, game shows, talk shows) is contracted
out? Or to phrase the question differently: why do local tv stations
do *any* of their programming?
Fabio
I think Arthur Stinchcombe summarizes the interesting aspects
of academia in his book "Information and Organizations":
1. Colleges convert prestige into tuition dollars, donations and grants.
2. Prestige is based on smarts/quality, which is hard to measure.
3. Thus, academic managers (deans, p
Don't you think there is a difference between efficiency in the
intellectual arena and truth? I think that intellectual
institutions are fairly good at allocating resources to
efficiently produce "normal science" - ie, science that
refines and explores a given view of the world.
Truth may requir
Mike Kinsey on Slate notes that KMart employees are now allowed to
haggle over prices. He notes that with the Internet, merchants
can instantaneously raise or lower prices to meet demand instead of
industrial revolution style fixed prices.
I've posted once or twice about haggling and standard p
I'll rephrase what Sherwin Rosen said in some speeches and
articles before his death. He argued that Austrian economics
includes a number of ideas, which have varying degrees of
acceptance in the market place of ideas. The subjective theory
of value is accepted by most economists as are other Aus
Armchair game theory: Does anybody here think that the war
in Afghanistan can be characterized as a tipping game?
Conscripted Taliban soldiers and residents of Taliban
controlled areas could either support the Taliban or not,
and are waiting for somebody else to move first. The first
victory last
Not as much as you think. Of course, if you go to a completely
unchallenging school your chance for a top grad school will drop.
But grad school committees have pretty good information on their
hands when it comes to econ: math grades, math GRE, econ subject GRE.
They also have letters of rec. Wi
let me add another note: it's important to choose an undergraduate
college where you will do well and you like the atmosphere.
Once you have a publication or two, nobody will care that you
got a C in graduate econometrics at MIT, but your undergraduate
GPA is used for all sorts of things. So cho
I am not an economist, but I do happen to know a fair amount
about graduate school (I've been in two and my dissertation is
on higher education):
1) Unless you have a good reason, go to the best/highest prestige
school that will accept you. Why? Prestige/repuation tends
to correlate with things
I greatly appreciate the opportunity to read attachments sent
by armchair list members, but I humbly request that armchair
subscribers *not* send large documents. Rather, please
include a URL so that I can download the document to my desktop.
Otherwise, it must go through my e-mail account, which
Some economists have argued that lines at popular restaraunts reflect
irrational behavior on the part of restaraunt owners - why don't
they raise prices to get rid of excess demand? Becker, among others,
argue that lines attract other customers, and restaraunts compete
through popularity.
After
Have you considered that "the author is my friend" may have some
information in it? For example, if Robert Reisch endorsed a book,
you could reasonably conclude that Robert Reisch is the author's
friend and that his friends tend to be liberals with a certain
slant. It wouldn't signal the quality
My guess: Thomas Szasz. I really have no idea if he "deserves"
it because I have no notion of what the criteria are but I do know
that he's recieved quite a few awards fro the libt'rn crowd.
Facetious guess: Bill Gates!
Fabio
On Wed, 10 Oct 2001, Alex Tabarrok wrote:
> Speaking of prize
I've read that the Academy tends to clump together Nobelists
by topic - "the game theory year" of Selten, HArsanyi and Nash, for
example. Maybe somebody would take it personally, but they shoudln't.
Fabio
On Wed, 10 Oct 2001, Bryan Caplan wrote:
> In a way, isn't dividing the prize 3 ways a
Well, the second-hand report supplied by me was just one bit of
evidence in support of the more general observation that some people
report that they are happiest in situations of adversity - a point
raised by Robin. Someone volunteered that a survey had shown that
some Russians were happiest dur
I may have asked this before, but I don't recall getting a response:
How can there be any realistic competition between phone books?
The Yellow Pages are subsidized by the local, perhaps monopolistic phone
company. Couldn't the regular Yellow Pages blow away the competition
by cutting advertis
A lot of firms have been using the attack as an excuse... somehow,
terrorists have even inhibited the buying of guitars since
The Guitar Center announced potential losses blamed on the attack!
Seriously, there may be some truth to things. A business on the
brink of bankrupcy depends on the lenie
An article in the LA Times discusses how high levels of stress
change hormonal balances in the body causing, ahem, sexual arousal
during times of stress.
I can easily imagine a similar effect for just plain happiness.
Fabio
On Mon, 1 Oct 2001, Robin Hanson wrote:
> The Washington Post had tw
Couldn't one argue that airlines are similar to roads, telephones
and other services necessary for a modern economy? Thus, the gov't
might be justified in maintaining transportation in order
to promote more general well being. You then sacrifice short
term optima for long term benefits.
Fabio
Vladimir Nabokov once wrote that prizes should not be given to
anybody over the age of twelve. In the big picture, prizes
are silly but there is some value in discussing them. Wrt to
the economics prize, the question I rasied was about what
constitutes good economic analysis: the committee that
a
Other nobel prizes have been awarded to individuals that weren't
formally trained. Some literature winners were not fiction writers,
a recent physics went to an engineer and medicine/physiology often
goes to non-MD biologists. If people started thinking contribution
to economic thought, then we m
Of course, Bill, the right thing to do would be to state some
odds and place a bet.
Fabio
On Thu, 20 Sep 2001, Bill Dickens wrote:
> As Fall approaches one of the interesting rituals involves the selection of
> Nobel Laureates. While I'm not a legitimate bookie, I do engage in some
> innocuous
I just looked on the internet and it is often the case the rent-to-own
contract frequently includes a clause stating that the owner
pays for repairs. The same web page listed an advantage of RTO
was that it allowed people with little cash for a down payment
to buy pricy items like home appliance
Why does Rent to Own exist? Isn't rent to own just a way of
lending money to the customer (like many auto firms)?
One friend said it was a way of selling to people whose religion
precludes the paying or charging of interest.
Any comments?
Fabio
I have heard a few news commentators suggest that the
rebuilding process will spur the economy. I have not heard this
from any gov't officials.
I would guess that many economists in the gov't are probably concerned
with making sure specific industries don't go under. Already, it's been
suggeste
> 1. any takers on why?
How about learning? Younger people, by definition have less experience/
knowledge. they probably have less emotional control than older
people.
> 2. is a "forbidden fruit" argument consistent with economic rationality?
>
Depends on definition of "economic rationality.
I should also note that this has happened in computer science
dpeartments as well, for almost identical reasons.
-fabio
It seems that there are a few issues:
1) The current distribution of wealth fits the latitude hypothesis
pretty well. I don't think that anybody is really disputing this
point.
2) The real question is whether the current distribution of wealth is
typical or not. If you did the same study 1000 A
> Question: What would controlling for racial composition do to these
> results? Clearly there is high collinearity between race and latitude,
> though modern transportation is weakening the connection. If you do
> both latitude and racial composition, what would happen? Does anyone
> have har
Someone who used to work in a paint factory told me that
paint manufacturers can sell the same paint for different
prices just by changing the label. The same can would be
marketed to different kinds of consumers and fetch different prices.
>From what I was told, this practice is fairly common
A new graduate student in my department told me that at Beijing
University, econ undergraduates are not taught Keynesian economics -
they get a good dose of Marxism and then they get hooked up with
monetarism!!
Can anybody else verify this? Is China liberalized enough so that
students are allowe
> By the way, if you read Nasar's book, she reports that when Nash
> presented his results on non-cooperative games to Von Neumann, the latter
> replied that they were "trivial". I wonder who will play Von Neumann in
> the movie? My pick would be John Malkovich.
>
> Alex Robson
> UC Irvine
I
If you want something aimed at generic undergraduates, I'd
highly recommend Alan Taylors "Mathematics and Politics."
(Rated G)
If you want a somewhat technical intro, then I'd recommend
Morris' intro for political scientists.
(Rated PG)
If you want the standard treatment for beginning econ grad
> At the risk of opening a whole new can of worms, I think that diagnosing
> the homeless as "mentally ill" is often tautologous. As in "You would
You've opened this can of worms before!! I think it's time to
let the little felllows enjoy their new found freedom...
-fabio
I think Anand raises a more interesting question than is addressed
in the responses so far. I bet it's been addressed in some literature,
but I think the interesting question implied by Anand's post
is "how similar are preferences made in absence of prices to prefences
developed with full knowled
Alex,
Here is a follow up question: why did California state regulators
forbid or discourage all the practices (extra plants, buying futures,etc)
that would help stabilize the power supply?
Fabio
Due to price caps, California utilities are unable to raise prices
in order to purchase more power on the open market. Two questions:
1) Is this an accurate depiction of the siuation in California?
2) The legislature and the governer have called for more regulation.
Is this a classic example of
Why do airline firms exist?
Seriously, given the unpredictable nature of the airline industry such
as disasters, bad weather, labor strikes and regulation you would
think almost no one could survive in such a wacky business environment.
I know that some firms tend to make profits (like Southwes
I was reading Braudel's text and he said that for each leg of a journey
(12-18 miles) the courier would charge 1 ducat. Thus trans mediterranean
letters could cost an entire year's pay.
-fabio
> What is the field of economics, perhaps a category of pricing theory,
> that addresses the discrete nature of prices? Aside from the limit
Maybe psychology and economics? How about transaction costs and search
costs? My hunch is that for the most part the format of prices can b
e attributed
Good point, Alex. I think I like the medieval example because it's
a little more shocking - the US Post does about the same job as
private postal carriers in the Dark Ages.
-fabio
> You don't have to go back that far. The Pony Express had speeds
> comparable to today's US Post Office on rout
Last summer, I argued with a friend over the privatization of the postal
service. He said that the postal service already did a good job as
one could ask for. A bystander opined that without market forces, how
could one really know if a job was done efficiently or not?
With the postal service,
1) Have there been any attempts to measure the shipments of durable goods
to the Third World by immigrants? I have noticed that Mexicans who
travel home tend to carry these huge boxes of stuff with them
to give to their families.
2) Has any one measured the impact of this flow of goods on the
ec
Replies below:
> So how does the Supreme Court have any power? While can't Congress
> always credibly threaten "Say our laws are constitutional, or else we'll
> add more justices who will!"?
The minority party in the Senate has a lot of power if they have at least
40%. They can block the major
An article in the current Liberty magazine makes much ado about
how the top 500 companies in the US have had a declining share of
assests and emplyees. Ie, the top firms over time represent less
of the economy - wealth seems to be created more and more by medium
and small companies.
Any reasons
Do I hear ... the Armchair grinch??
-fabio
PS Seriously, this isn't the most pressing issue in the world, but
the usage of small amounts of money is a real question, albeit a rather
silly one.
On Fri, 15 Dec 2000, Alex Tabarrok wrote:
> What does this have to do with economics? Answer: Not m
A friend of mine noticed that men tend to carry rather large
amounts of change in their pockets compare to women.
Any economic explanation of why this is?
-fabio
On Tue, 5 Dec 2000, Yann Le Du wrote:
> Doesn't the _existence_ of the rule participate in changing the way the
> people "think the chances are that the government would actually try to
> stop them" ? I think there's a retroaction process there.
You might think so, but for the longest time in A
On Tue, 5 Dec 2000, Robin Hanson wrote:
> >The evidence is that a lot of people are willing to pay quite
> >a bit for their own free speech. Witness the fact that many
> >are willing to die for the right to express their religion.
>
> I agree that many people highly value their ability to expre
On Mon, 4 Dec 2000, Robin Hanson wrote:
> But I have often wondered if we could measure willingness to pay
> for various freedoms, perhaps by just directly asking people.
I think we already have one good measure: the amount of donations to
organizations dedicated to free speech such as the ACLU
Observation: Many colleges in the pre-civil war era attracted donations
from abolitionists because they offered a place where abolitionists
could argue their case freely. In other words, many colleges were
paid forums for the abolitionist movement.
Question: Could we use charitable donations to
Chris, could you summarize the alleged deficiencies of the Bell Curve?
-fabio
On Thu, 26 Oct 2000, Chris Auld wrote:
> journal, for very good reasons. I'd put the Bell Curve in the bottom
> 5% of the distribution of published empirical work in economics. And
> I'm probably being far too gene
On Tue, 24 Oct 2000, Robin Hanson wrote:
> Fabio wrote:
> >What are the big unsolved puzzles of economic empirical research?
Robin wrote:
>
> 1) Why do people live so much longer today than they used to?
Granted technological change and increased wealth, why is this such
a mystery?
> 2) Wh
Informal Survey:
What are the big unsolved puzzles of economic empirical research?
What economic phenoma seem pretty darn important, but have not
been adequately explained by current economic theories?
Just curious to see what the pro's have to say...
-fabio
Since this was late... any comments on Heckman and McFadden's prizes?
-fabio
On Mon, 9 Oct 2000, fabio guillermo rojas wrote:
>
> Any guesses on the econ nobel prize this year?
>
> -fabio
>
Any guesses on the econ nobel prize this year?
-fabio
>Card and Krueger is indeed an original and clever study and if it had
> turned out the other way I have no doubt John and others would be
> hailing it as the definitive paper on the minimum wage.
>
> Alex
Why is the response to Card/Krueger to completely trash it? Given the fact
that it
Business schools have been criticized for being pure credentialing
agencies. The New York Time ran an article today about how consulting
firms are hiring non-MBA's. usually people with graduate degrees
in any field. In house studies show that MBA do just as well
as non-MBAs.
The article is:
ht
Once again, it goes back to supply and demand. People with good
writing skills seem to be more numerous than those that can teach
math. Thus, the price of writers should (and is) lower than
mathematicians.
-fabio
> Are Humanities less real skills that, let's say, maths or economics? If
> human
> So, are professors really underpaid? (if such statement makes any sense at
> all).
I recommend that you read chapter 5 of Stinchcombe's "Information
and Organizations." That chapter is all about universities. One
good observation (not unique to Stinchcombe) is that US universities
seem to be
> Aren't the oil companies the moral equivalent of Satan to Gore?
> Am I missing something here?
> Alex Robson
I think it's pretty simple: Gore doesn't want high fuel prices
to become an election issue. Democrats regularly help out/accept
donations from industries you would think that they ha
Here some cute numbers
Title Amazon.com sales Rank Approx Price
The Communist Manifesto 3,955 $5
The Road to Serfdom 866$8
Wealth of Nations 1,782 $9
Essential Works of Lenin 40,222 $
Observation: Competitive chess players often use clocks to ration time.
Seems logical - conserve your time for important or difficult move.
Straight forward budget constraint.
Question: Chess players often use the "touch rule" - you touch
a piece, you move it. Is there any economic motivation fo
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