How much do firms benefit from noncompete agreements?

[Chris Rasch]

Does anyone know of any studies examining how much firms benefit (if
any) from non-compete agreements?


While doing research on that question, I found this interesting paper:

BIASES IN THE INTERPRETATION AND USE OF RESEARCH RESULTS
Robert J. MacCoun
Richard and Rhoda Goldman School of Public Policy, University of
California, Berkeley, California 94720-7320,
[EMAIL PROTECTED]

"When self scrutiny fails, we rely on institutional safeguards such as
peer reviewing, research replication, meta-analysis, expert panels, and
so on. A
detailed review of these topics is beyond the scope of this essay, but
it should be noted that many of these practices have themselves been
scrutinized
using empirical research methods. For example, Peters and Ceci (1982 and
accompanying commentary) provided a dramatic demonstration of the
unreliability of the peer review process. A dozen scientific articles
were retyped and resubmitted (with fictitious names and institutions) to
the
prestigious journals that had published them 18-32 months earlier. Three
were recognized by the editors; eight of the remaining nine not only
went
unrecognized, but got rejected the second time around. (Though one
suspects that many articles would get rejected the second time around
even when
recognized.) Cicchetti (1991) and Cole (1992) provide equally sobering
but more rigorously derived evidence on the noisiness of the peer review
process,
citing dismally low interreferee reliabilities in psychology journals
(in the .19 to .54 range), medical journals (.31 to .37), and the NSF
grant reviewing
process (.25 in economics, .32 in physics). To make matters worse, at
least some of this small proportion of stable variance in ratings is
probably
attributable to systematic bias, though the limited research base
precludes any strong conclusions (see Blank, 1991; Gardner & Wilcox,
1993; Gilbert,
Williams, & Lundberg, 1994; Laband & Piette, 1994; Rennie, 1997). "

available  at:

http://socrates.berkeley.edu/~maccoun/ar_bias.html

Landsburg Column

[William Dickens]

RE: http://slate.msn.com/economics/00-02-09/economics.asp 

I read the Landsburg column, but I haven't read the original study he is commenting 
on. Given that, Landsburg's account of the idea seems totally nutz to me. Why would we 
assume that the relative price of quality vs quantity should remain the same over time 
(that has to be the underlying assumption that makes sense of the analysis that is 
being done). Doesn't it seem obvious that the manufacturing revolution of the early to 
mid 20th century reduced the relative cost of quantity (look at how the use of craft 
work in buildings dropped in favor of simple machine honed moldings for example and 
how mass produced plastic ticky-tacky replaced crafted pottery and dishes) while the 
information revolution seems to be reversing that trend and decreasing the relative 
cost of quality (by making more customization possible)?  If I'm right that would mean 
that the method that Landsburg wants to use would grossly overstate productivity 
growth for the first 70 years of the 20th century (where !
the price of quality is underestimated and the trend is ignored). Its hard to say 
whether its under estimated or over estimated since then. -- Bill Dickens



William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
E-MAIL: [EMAIL PROTECTED]
AOL IM: wtdickens

Re[2]: Movie popcorn prices

[Krist van Besien]

On Fri, 24 Nov 2000 15:40:02 -0500 Amanda Phillips > wrote:


> As for workers at the concession stands, you'll often notice theatre 
> managers helping out during the rush periods. And at large theatres (10-16 
> screens) movie times are staggered so that there's always a rush at the 
> concession stands.

Their is a reason for not staggering movie times though.
When all screens start at once a customer that came to see a
particular movie that just sold out is more likely to buy a
ticket for another movie where there are still seats
available. After all his plans for the evening include
watching a movie.
So the management needs to dccide what generates more
revenue. Getting more out of the concessions or increasing
the number of sold seats. On of the more successfull of
movie theatre chains in Europe [1] has choosen the latter. All
their screens start at the same time.

Krist

[1] Kinepolis Group. According to their website they get
about 77% of their revenue from the box office. 20% from
concessions.


-
Krist van Besien
[EMAIL PROTECTED]

Re: Re[2]: Movie popcorn prices

[Robert Frommer]

On the last note, is that gross revenue, or profit accruing to the theatre.
Box office reciepts are shared with both the studio and distributor, while
concession revenue is not shared.  From my own experience at the theater, I
was always of the impression that concessions drove profit for the theater.

Rob
- Original Message -
From: Krist van Besien <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Monday, November 27, 2000 8:42 AM
Subject: Re[2]: Movie popcorn prices


> On Fri, 24 Nov 2000 15:40:02 -0500 Amanda Phillips > wrote:
>
>
> > As for workers at the concession stands, you'll often notice theatre
> > managers helping out during the rush periods. And at large theatres
(10-16
> > screens) movie times are staggered so that there's always a rush at the
> > concession stands.
>
> Their is a reason for not staggering movie times though.
> When all screens start at once a customer that came to see a
> particular movie that just sold out is more likely to buy a
> ticket for another movie where there are still seats
> available. After all his plans for the evening include
> watching a movie.
> So the management needs to dccide what generates more
> revenue. Getting more out of the concessions or increasing
> the number of sold seats. On of the more successfull of
> movie theatre chains in Europe [1] has choosen the latter. All
> their screens start at the same time.
>
> Krist
>
> [1] Kinepolis Group. According to their website they get
> about 77% of their revenue from the box office. 20% from
> concessions.
>
>
> --
---
> Krist van Besien
> [EMAIL PROTECTED]
>
>
>
>

Re: Landsburg Column

[Robin Hanson]

At 10:47 AM 11/27/2000 -0500, you wrote:
>RE: http://slate.msn.com/economics/00-02-09/economics.asp
>... I haven't read the original study  Given that, Landsburg's account 
>of the idea seems totally nutz to me. Why would we assume that the 
>relative price of quality vs quantity should remain the same over time 
>(that has to be the underlying assumption that makes sense of the analysis 
>that is being done). ...

That assumption didn't bother me as much as positional goods
concerns and other ways that rich and poor differences at the
same time differ from differences across time.

The study assumes that if the value that rich people get from
spending more on something is the same value that poor people
will get when they spend more on such things as a nation gets
richer.

However, rich people save more than poor people, but savings
don't seem to rise as we all get richer together.  Rich
people spend a smaller fraction of their income on health
care, but nations spend a larger fraction as they get richer.








Robin Hanson  [EMAIL PROTECTED]  http://hanson.gmu.edu
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-
703-993-2326  FAX: 703-993-2323

Re: Landsburg Column

[Alex Tabarrok]

Bill,
  As I read Landsburg the Klenow-Bils idea is that if at time 1 the
rich own 100% more microwaves than the poor at a 25% higher price then
at time 2 when the poor own 100% more microwaves than at time 1 the
quality-adjusted price (unobserved) has fallen 25%.  What they need to
assume is that the quantity/quality price that poor and rich consumers
face at time 1 continues to hold between time 1 and 2.  My guess is that
the assumption requires some sort of uniform technological improvement
across the span of microwaves from low to high quality.  (Probably also
some homotheticity type assumptions about preferences).

The examples you mention show that technological improvement is not
uniform across quality types but does the tradeoff change so fast that
the cross-sectional results are uniformative?  Suppose, for example,
that you reestimate the cross sectional quantity/quality price every
five years - this is easy as there is plenty of data - then all you need
is more or less uniform technological improvement over any five year
span, which seems reasonable enough to me.


Alex


-- 
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Email: [EMAIL PROTECTED]

Why Are Courting Signals Ambiguous?

[Robin Hanson]

People are usually not very direct when flirting, courting, etc.
For example, people usually do not just say "Do you want to have sex?".
Instead flirting and courting tend to be extremely complex processes
involving much ambiguity, subtle error-prone interpretation, and
complex analysis.

It is interesting to make up armchair explanations for this ambiguity.
1) Plausible Deniability - people want to flirt without being caught
flirting, or without clear evidence that can be reported to third
parties.  This attached people to consider "cheating," and unattached
people to not look "desperate."
2) Social Ability Sorting - Ambiguity allows shoppers to sort for
people with the cognitive and social skills to read subtle signals
correctly.  Such skills come from innate ability, and from more
successful experience in flirting/courting/mating.
3) Confidence Sorting - Ambiguity creates a cost of misjudging interest.
This cost is lower for those who are more confident that others
will be interested in them.  Such people are more likely to play.
4) Cost Sorting - Ambiguity makes courting take longer, a cost which
might be larger for the attached and the poor, who are less desired.


Robin Hanson  [EMAIL PROTECTED]  http://hanson.gmu.edu
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-
703-993-2326  FAX: 703-993-2323

Re: Landsburg Column

[William Dickens]

Hi Alex,
We agree. If I'm right that the changes in the price of quality are profound then 
the five year measures should show big changes. Particularly between 1945 and 1970 I 
would bet they would be enormous. -- Bill

>>> [EMAIL PROTECTED] 11/27/00 12:03PM >>>
Bill,
  As I read Landsburg the Klenow-Bils idea is that if at time 1 the
rich own 100% more microwaves than the poor at a 25% higher price then
at time 2 when the poor own 100% more microwaves than at time 1 the
quality-adjusted price (unobserved) has fallen 25%.  What they need to
assume is that the quantity/quality price that poor and rich consumers
face at time 1 continues to hold between time 1 and 2.  My guess is that
the assumption requires some sort of uniform technological improvement
across the span of microwaves from low to high quality.  (Probably also
some homotheticity type assumptions about preferences).

The examples you mention show that technological improvement is not
uniform across quality types but does the tradeoff change so fast that
the cross-sectional results are uniformative?  Suppose, for example,
that you reestimate the cross sectional quantity/quality price every
five years - this is easy as there is plenty of data - then all you need
is more or less uniform technological improvement over any five year
span, which seems reasonable enough to me.


Alex


-- 
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Email: [EMAIL PROTECTED]

Re: Why Are Courting Signals Ambiguous?

[CyrilMorong]

Robin Hanson's post was very interesting.  I have wondered that ambiguous 
signals might play another role.

Suppose all women like men who wear red ties because those men, for some 
reason, are nicer or richer than others. Assume that this is the only way 
women can tell the nice guys from the jerks(the men who are not nice). So 
women would avoid men who don't wear red ties.  But if women told men that 
they like men who wear red ties, then the jerks(the men who are not nice) 
could wear red ties.  If all men wore red ties, then women could not tell 
which guys were really nice.  So you might not want to give away what signals 
you are looking for or what they mean.  In your mating, dating, flirting 
activity you wuold not come right out and say what you are looking for.

Cyril Morong
San Antonio College

webpage update

[Bryan Caplan]

Shameless self-promotion - I've just updated my Academic Economics
webpage, partly because of the acceptance I just got from the Journal of
Law and Economics for "What Makes People Think Like Economists?"  All of
the papers can be downloaded in Word format at:

http://www.gmu.edu/departments/economics/bcaplan/econ.html
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  "[T]he power of instruction is seldom of much efficacy, except in 
   those happy dispositions where it is almost superfluous." 
   -- Edward Gibbon, *The Decline and Fall of the Roman Empire*

Re: Why Are Courting Signals Ambiguous?

[david friedman]

Variants of your option 1: People want to be able to find out if the 
other party is interested without committing themselves, for two 
reasons:

a. The status of "rejected suitor" is different from, and to some 
degree incompatible with, the status of friend--and they want to 
preserve the latter option as long as possible.

b. Rejection hurts.
-- 
David Friedman
Professor of Law
Santa Clara University
[EMAIL PROTECTED]
http://www.daviddfriedman.com/

Re: Why Are Courting Signals Ambiguous?

[Alexander Robert William Robson]

Robsin Hanson wrote:

People are usually not very direct when flirting,  courting, etc.
For example, people usually do not just say "Do you want to have sex?".

One reason could be that some groups of individuals, by virtue of their
natural (or artificial!) physical or other attributes, and by virtue of
the way human tastes have evolved, might have some kind of market
power with respect to the ability to withhold sex from the other.

So a member of one of these groups who simply asks "do you want to have
sex?" is effectively engaging in price undercutting, and
is breaking the implicit (or explicit) collusive agreement that exists
between members of this group.  Such an individual, who lowers the price
in such an obvious way, raises the risk of social stigmatization by other
members of the group and may even be banished from the group, thereby
losing the privileges of being a cartel member.

Therefore members of the cartel have an interest in giving out ambiguous
signals which, on the one hand, say  "I'm interested in having sex with
you" to potential mates, but which, on the other hand cannot be detected
or easily interpreted by fellow cartel members.  I guess this is kind of
a Green-Porter theory of ambiguity in mating and dating.

Alex Robson

RE: excellent column, evidently Landsburg never worked in politics

[Andrew Sellgren]

Bryan pointed us to:

> Landsburg's column "I've Got to Admit It's Getting Better"
> ...
> http://slate.msn.com/economics/00-02-09/economics.asp

At the end, Landsburg says,

>If the AARP is powerful enough to demand a 5 percent increase and
inflation
>is measured at 3 percent, they'll get a 3 percent cost of living
adjustment
>and an additional 2 percent on some other pretense. If inflation is
measured
>at 4 percent, they'll get 4 percent plus 1 percent. And if inflation is
>measured at 6 percent while the AARP is in a position to demand only 5
>percent, they'll get a 6 percent cost of living increase coupled with a 1
>percent cut.
>   I don't know how to prove that theory, but it strikes me as
>self-evident. The alternative is to suppose that the entire political
>system, with all its checks and balances, is in thrall to the way some
>economist happens to calculate a number. I don't believe we're that
powerful.

I'm a big fan of Landsburg, and I would not lightly criticize the author
of this list's namesake, but that strikes me as utter nonsense.  Hasn't he
heard of ``framing''?  E.g., in Kahneman and Tversky (1981).  People weigh
positive and negative innovations differently.

Here's another way to look at it:  Why do some people insist on using the
term ``pro choice'', while others are equally adamant about using ``pro
life''?  Isn't -(-x) the same thing as x?  Evidently not.  Being ``pro
choice'' is not the same as being ``pro abortion''.

When I worked as a congressional staffer, I was astounded by the fact that
just about half the mail we received on entitlements started out with
something like, ``I wish you would stop calling my Social Security an
`entitlement' .''  Words matter.  Rhetoric matters.  Politicians pay
pollsters and focus groups to gauge the effects of words.  Interest groups
spend money to push a particular vocabulary.  It's easier to pass a bill
for a ``cost-of-living adjustment for retirees'' than for a ``subsidy to
people on permanent vacation.''

Cheers.
Andrew.


-
Andrew Sellgren
Department of Economics, MSN 3G4
George Mason University
Fairfax, VA  22030-

Tel:   (703) 993-1124
Fax:   (703) 993-1133
Email: [EMAIL PROTECTED]
Web:   http://sellgren.gmu.edu
-

Re: Why Are Courting Signals Ambiguous?

[Chris Auld]

The explanation below assumes that all women know what they're looking
for whereas no men know what women are looking for.  Which isn't plaus...
h, wait, forget that remark.

I think we could differentiate between flirting as a way of garnering
information v flirting as a way of mitigating, as David says, the damage
caused by rejected advances by the pattern of flirting.  In places where
relative strangers mingle (singles bars, say), I think the flirtation
tends to border on direct propositioning.  But where friends or co-workers
interact, flirting is much more subtle.  The latter type of environment is
the one in which garnering information about potential mates is relatively
unimportant (you already know them) whereas in the former information is
scant, so if flirting were mostly a way of signalling personal 
characteristics we'd expect to see pattern reversed.  This supports
David's variant on Robin's theme 1.


Chris Auld  (403)220-4098
Economics, University of Calgary
Calgary, Alberta, Canadahttp://jerry.ss.ucalgary.ca/>

On Mon, 27 Nov 2000 [EMAIL PROTECTED] wrote:

> 
> Robin Hanson's post was very interesting.  I have wondered that ambiguous 
> signals might play another role.
> 
> Suppose all women like men who wear red ties because those men, for some 
> reason, are nicer or richer than others. Assume that this is the only way 
> women can tell the nice guys from the jerks(the men who are not nice). So 
> women would avoid men who don't wear red ties.  But if women told men that 
> they like men who wear red ties, then the jerks(the men who are not nice) 
> could wear red ties.  If all men wore red ties, then women could not tell 
> which guys were really nice.  So you might not want to give away what signals 
> you are looking for or what they mean.  In your mating, dating, flirting 
> activity you wuold not come right out and say what you are looking for.
> 
> Cyril Morong
> San Antonio College
> 

webpage update

[Vero de Rugy]

That is really cool Bryan. But I am not surprised. I have great
expectations now when it comes to you. What a year!

Vero