#EconomicsInThreeWords

Is Economics deserving of its own Nobel Prize*? Is Literature? In honor of Jean Tirole being awarded the 2014 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — previous recipients include our intellectual heroes Ronald Coase, John Nash, and Thomas Schelling — we are reposting the following Twitter thread titled #EconomicsInThreeWords. Here’s our contribution: “Markets require rules.” Below are a few other exemplars from this series:

https://twitter.com/acoyne/status/518775100313579520

*By the way, for what it’s worth, the Nobel Prize for Economics is not a “real” Nobel Prize, i.e., it’s not one of the original Nobel Prizes created through Alfred Nobel’s will, which specified that his annual prizes should go to people whose work has “conferred the greatest benefit on mankind.” The Economics prize, by contrast, was created (and funded) by the Swedish Central Bank in 1968 “in memory of Alfred Nobel.”

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Music Monday: Mexican Coke

Triple hat tip to Erin Geiger Smith for writing up this in-depth report about Mexican Coca Cola in the Sunday Times and for bringing this hard-core Mexican Coke song and this cool thing to our attention. Here is an excerpt from her report (emphasis ours): Continue reading →

Posted in Art, Culture, Economics | Tagged , | 1 Comment

Who pays?

Eve Moneypenny and James Bond appear to commit a number of civil torts in this dramatic opening scene of the 2012 film Skyfall (filmed on location in Istanbul, Turkey). Is their employer, MI6, not liable to the various victims for any of the resulting damages under the common law principle of respondeat superior? Doesn’t the answer to this liability question, in turn, depend on whether Bond and Moneypenny are employees or independent contractors?

Posted in Law, Property Rights, Questions Rarely Asked | Tagged , , , | 4 Comments

#LetGurleyPlay

The University of Georgia Athletic Association made $98.9 million in revenues during the 2013 fiscal year, according to this revealing report in the Athens Banner-Herald. The University of Georgia Athletic Association’s main income sources included $21.2 million in direct football revenue, $23.2 million in ticket contributions from football season ticket buyers, and $18.2 million in TV income through the NCAA and SEC. Yet Todd Gurley, their star running back and Heisman-trophy candidate, isn’t allowed to make a few hundred dollars off his own likeness. The monopolistic NCAA and the greedy University of Georgia Athletic Association are pure evil, and Todd Gurley’s teammates should refuse to take the field today against Mizzou in solidarity with their brother. In short, let the man play, or no one plays.

Who will be college football’s Lech Walesa?

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The paradox of “assholism”

This is Professor Geoffrey Nunberg’s crude neologism, not ours. Dr Nunberg, a professor of linguistics at UC Berkeley, delves into “the moral logic of assholism” in his 2012 book Ascent of the a-word: assholism, the first sixty years. (We spent the better part of yesterday afternoon reading Dr. Nunberg’s quirky tome.) In the words of Dr Nunberg, this moral logic justifies rudeness on one’s part when someone else is rude in turn: “Put simply, you have a right to treat assholes as assholes because the assholes have it coming.” But as the Professor explains in his a-word book, this moral logic poses a paradox or puzzle, for calling someone an “a-hole” is itself an a-hole move, is it not? By way of example, if we were to call the Todd Gurley snitch an “a-hole” (no doubt a deserving epithet in this particular case), we would then be acting like a-holes ourselves. This paradox of contradiction is aptly captured by the familiar expression “two wrongs don’t make a right.” (In Spanish, we would say: “Lo cortés no quita lo valiente.”) Is this really true? Is there a solution to this paradox? (Note: This blog post was revised on 11 October 2014.)

A is for ______.

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The paradox of automation

Our student Mike Hildebrandt recently brought this mesmerizing essay (with the mysterious title “The Human Factor”) to our attention. The author of the essay, William Langewiesche, describes the last moments of doomed Air France Flight 447 in riveting detail, and he also makes the larger point that as automation makes commercial aviation safer, the possibility of pilot error becomes more likely in those rare instances in which an unforeseen event occurs mid-flight. In the words of Mr Langewiesche:

To put it briefly, automation has made it more and more unlikely that ordinary airline pilots will ever have to face a raw crisis in flight—but also more and more unlikely that they will be able to cope with such a crisis if one arises. Moreover, it is not clear that there is a way to resolve this paradox. That is why, to many observers, the loss of Air France 447 stands out as the most perplexing and significant airline accident of modern times.

So, does this particular paradox have any feasible solution? Also, what is the “optimal” rate of technological automation? (Diagram below courtesy of Aaron and Hsinya Lin.)

Posted in Bayesian Reasoning, Economics, Paradoxes | Tagged | Leave a comment

Grade the Professor

We are teaching “Intro to Business Law” at UCF this semester, and now that we are half-way through the semester, we would like some feedback from our students. (At last count, 1009 students are enrolled in Introduction to Business Law or BUL 3130.) You have one week to “grade the professor,” so vote early and vote often, for this pithy poll expires on 16 October. Comments are especially welcome, especially responses to the following two questions:

1. What do you like most about the Professor’s Intro to Business Law class? 2. What do you like the least, i.e. what would you like the Professor to do differently?

Posted in Academia, Bayesian Reasoning | Tagged | 21 Comments

Music Monday

More details here.

Posted in Music | Tagged | 1 Comment

The problem of reclining airplane seats

We forwarded our 3 October blog post “The Right to Recline?” to several scholars, including our gentle friends Terry Anderson, Christopher Buccafusco, and Chris Sprigman. (By the way, Professors Buccafusco and Sprigman, in particular, had previously published this thoughtful essay on airplane seat reclining.) In summary, we had argued in our 3 October blog post — and we continue to argue — that property rights aboard commercial airlines are unclear. Some of our interlocutors, however, replied to us that the recliner should have a default right to recline since most airplane seats are reclinable in the first place. Here, for example, is one representative response to our 3 October blog post:

To me, the right appears to belong to the recliner, at least as a default. Seats recline, and people recline mostly without asking or notice. I know some people think that’s rude, but that doesn’t mean there isn’t a property right.

Nevertheless, we are not fully persuaded by this line of reasoning for two reasons. First, why can’t the “default rule” be in favor of the reclinee? After all, the reclinee is allocated a limited amount of legroom before takeoff, so he could easily argue that, at a minimum, he is entitled to that minimum amount of legroom during the entire duration of the flight. Secondly and more importantly, we would argue that just because someone has a property right to x, this does not mean that he has the right to use x in such a manner as to impose external costs on third parties. For example, I have a property right to my 1993 Jeep Wrangler, but I don’t have the right to park my Jeep on my neighbor’s driveway without my neighbor’s permission. Or to take one of Ronald Coase’s classic examples — the problem of cattle trespass — just because a rancher owns a herd of cattle doesn’t mean he is not liable to neighboring farmers when his cattle trespass on their land and destroy their crops.

In short, returning back to our airplane seat problem, what we have here are two competing and reciprocal sets of property rights: (a) the recliner’s right to recline and (b) the reclinee’s right not to be reclined upon. Until the airlines make it explicitly clear which set of property rights is to prevail — a or b — disputes between recliners and reclinees are unlikely to go away.

Social costs are bad.

Posted in Current Affairs, Economics, Property Rights | Tagged , , , | 2 Comments

Should academic papers be published anonymously?

David Wood, a professor of accounting at BYU, recently gave a thoughtful talk at our home institution (UCF*) comparing and contrasting academic publishing across various fields, including accounting, economics, finance, psychology, and the natural sciences. (For its part, The Economist recently wrote up this review essay about new developments in academic publishing.) Without getting into all the details of The Economist’s report or Professor Wood’s talk, suffice it to say that many academics are not satisfied with the publishing process in their fields for a wide variety of reasons, but foremost among these reasons is the high rejection rate by the top journals across all fields. This begs the question, however, of what, if anything, should we do to fix this “problem” (assuming, of course, that this state of affairs represents a real problem worth solving), short of increasing the number of academic papers accepted for publication? On the one hand, we could continue to tweak the existing system, or we could adopt a revolutionary approach by creating a specialized journal willing to publish academic papers on an anonymous basis. Such a journal could thus focus on publishing short papers with highly original or innovative ideas, independently of who wrote such papers. What do you think?

*Go Knights!

Posted in Academia, Game Theory, Questions Rarely Asked | Tagged | 1 Comment