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Tag Archives: Economics
Cuban Economics
In the United States, we have a minimum wage; Cuba has a maximum wage—$20 a month for almost every job in the country. (Professionals such as doctors and lawyers can make a whopping $10 extra a month.) Sure, Cubans get “free” health … Continue reading
Infinite regress in law (a theoretical critique of the Hand formula)
Adjudication is the process of making decisions in law, but decision-making is a costly activity. For simplicity, we can model the process of adjudication (and decision-making generally) as a function consisting of two costly inputs: (i) RESEARCH or information-gathering and (ii) … Continue reading
Don’t freak out …
Steven Levitt and Stephen Dubner’s third (and possibly last) “Freakonomics” book — Think like a freak — is out. It’s a breezy though entertaining mish-mash of assorted anecdotes and sundry stories … and an excellent graduation gift for any 6th graders you … Continue reading
If Steve Jobs were alive today, would he be in jail?
That is the provocative question raised in this report by James B. Stewart in today’s New York Times. The Times’ report notes that Steve Jobs, the co-founder of Apple, was the “driving force” in a conspiracy to prevent competitors from poaching Apple employees, a … Continue reading
Why are airline boarding procedures so inefficient?
Here is one hypothesis: Because consumers want and value assigned seats. Overhead bin space is scarce as well, and airlines allocate that to their best customers through early boarding. In other words, there are competing business objectives. It turns out that … Continue reading
More evidence that applied economics is not a science …
Economists still can’t agree on whether High Frequency Trading (HFT) is good or bad. Dude, where’s my trade?
“Living with Water Scarcity”
That is the title of David Zetland’s latest book. In David’s words: Do you worry that there is not enough water for people, the economy, and environment? Do you wonder if the water in our taps and rivers is safe … Continue reading
Model this: nice guys finish last?
The Iterated Prisoner’s Dilemma, one of the most important models in game theory, predicts that business firms that screw their customers should fail, not succeed. But check out this recent report in Bloomberg Businessweek: The most hated airline is also the … Continue reading
The Coase Theorem and the Game of Chicken
https://www.youtube.com/watch?v=7zSe1C1l6n8 Note: this post was revised and updated on 13 April 2014. There are only two parties to this particular dispute, a public agency and a private cattle rancher (thus so-called “transaction costs” are low), so what’s preventing them from negotiating … Continue reading
Do fake prediction markets work?
There’s a new information quasi-market called SciCast based on “crowd sourcing” methods and reputation effects, not on prices–i.e. participants who make the most accurate predictions move up a symbolic scoreboard but are not paid with real money. You could argue that one well-designed quasi-market is … Continue reading
prior probability 