Re: Levitt article

[John Morrow]

Along those lines, the following is a Paul Krugman article, which quite 
humorously recaps a similar media event about a wunderkind economist -- 
probably a story only economists would find funny.

http://www.pkarchive.org/cranks/legend.html

At 09:51 PM 8/4/2003 -0500, you wrote:

> >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

[fabio guillermo rojas]

> >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: What Do You Think?

[AdmrlLocke]

In a message dated 8/6/03 8:02:24 AM, [EMAIL PROTECTED] writes:

>Was it not the maker of fortune cookies at cheap chinese take-out's?
>
>
>
>heh.
>
>
>
>-davidu

LOL. Okay, fair enough. Now what was HER name?  ;)

David

Re: Levitt article

[fabio guillermo rojas]

> 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

[AdmrlLocke]

In a message dated 8/4/03 9:41:08 PM, [EMAIL PROTECTED] writes:

>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

Re: What Do You Think?

[Jacob W Braestrup]

A wise man once said: "if something sounds too good to be true - it 
probably is"

- I am sure they are just after the $150 fee - they won't even bother 
going after the free postage

> I get these ads through email all the time. Usually I just ignore 
tham but as 
> I'm getting poorer by the second I thought I'd take a look.  Do you 
think 
> this is just a gimmick to get the fees and maybe some free postage, 
or could it 
> be legit?
> 
> David
> 
> No Newspaper Ads…   No Magazine Ads…No Bulletin Board 
Ads ...   No Handing
> Out ...
> 
> Congratulations Friend,
> We have selected you to be one of our new catalog circular mailers. 
You can 
> earn from $550.00 to $3,000.00 and your paycheck is mailed to you 
promptly 
> every Wednesday. If you accept our offer today and follow our 
instructions your 
> first paycheck will be in your hands in approximately ten days time, 
following 
> our instructions!
> Our printing and publishing company is in the process of hiring home 
workers. 
> We desperately need home workers each week to stuff and mail out our 
special 
> advertising circulars. We have so much on hand that we are paying 
home workers 
> $10.00 for EACH letter stuffed and returned to us as per our 
instructions.
> There is no limit to the number of letters that you can stuff and 
mail for 
> our company.
> If we receive 55 letters stuffed and mailed out by you will be paid 
$550.00
> 
> 75 letters……$750.00
> 95 letters……$950.00
> 300 letters…..$3,000.00
> And so on...
> 
> The More Letters you Stuff and Mail the MORE MONEY You Can Make!
> 
> QUALIFICATIONS
> * You must be able to read and write simple English.
> * Have the ability to fold loose page circulars.
> * Stuff and seal circulars in an envelope.
> * Apply postage and mail them with the address labels we provide to 
you.
> If you pay attention to circulars that you receive from other 
companies you 
> will notice how all of them are very vague about what your package 
will contain 
> in addition they don’t tell you if they are the ones that are going 
to send 
> you the envelopes and circulars to stuff. They say all envelopes will 
come to 
> you already stamped and addressed. That simply means that YOU will 
have to 
> advertise to get people to send you self-addressed stamped envelopes.
> 
> WE ARE DIFFERENT
> We send you the envelopes, address labels and letters to be 
stuffed….
> We pay you for the work you do as per our instructions.
> Your only job is to place our special advertising circulars into 
envelopes 
> and then mail them out. For this you will receive payment of $10.00 
per envelope 
> from US!
> Your initial postage cost is reimbursable. That means it’s free! So 
keep this 
> in mind when you select an income group. No advertising in 
newspapers, 
> magazines or bulletin boards. We do not deduct taxes from your 
paycheck, so you’ll 
> get the full amount. We will send a form 1099 at the end of the year 
when 
> you’re ready to file your taxes.
> You will not be stuffing or mailing anything that is pornographic or 
illegal. 
> All literature that we’ll send you meets the requirements of the 
regulatory 
> agencies, so you have nothing to worry about.
> For your convenience, we have established 5 different groups. You can 
choose 
> the group that you want to work under. Each group carries different 
earnings 
> potential and a different number of starting supplies.
> The Earning Potential of
> 
> Group #1 is $550.00 Weekly
> Group #2 is $750.00 Weekly
> Group #3 is $950.00 Weekly
> Group #4 is $3000.00 Weekly! … This is the Most Popular Group.
> Group #5 is for established mailers who start in Group #4 and get 
promoted 
> after receiving their first $3000.00 in pay.
> Once you’re in Group #5 you have the potential to earn $5000.00 but 
you must 
> start in Group #4 if you want to be promoted to Group #5. We will 
leave it up 
> to you to choose your own starting group.
> For example, if you start in Group #3, we will send you a large 
priority 
> package containing 95 envelopes, letters and customer mailing labels 
along with 
> our easy to follow instructions. If you choose Group #4, we send you 
300 
> envelopes, letters and customer mailing labels.
> When you are promoted to Group #5, we will send you a large package 
> containing 500 of each item to be stuffed and mailed for payment.
> 
> WHY DO WE PAY SUCH A HIGH RATE AS $10.00 PER LETTER
> STUFFED AND RECEIVED ?
> First, the number of people who respond to our special letters, once 
they are 
> mailed out, is very high. Second, they like what we offer and are 
willing to 
> pay for the opportunities that we offer. These two facts allow us to 
easily 
> afford to pay $10.00 per letter stuffed and mailed. Also, we want you 
to be 
> happy with your new income level so you’ll continue to work for us 
which will 
> allow us to continue making money.
> We need home workers for a year round opportunity. Once you sign up 
with us, 
> you can stuf

Re: What Do You Think?

[AdmrlLocke]

Yes alas I'm sure you're right, and others have written to me to suggest the 
very same thing.  Indeed, it seemed too good to be true to me as well, which 
is why I solicited learned opinions rather than desperately grasping at it.

Incidentally, does anyone know the origin of "if something sounds too good to 
be true - it 
probably is?"  While I'm sure that at many points one wise man or another has 
said it, I wonder who said it first--and whether it might not have been a 
wise woman.  :)

Thanks Jacob.

David

In a message dated 8/6/03 4:14:36 AM, [EMAIL PROTECTED] writes:

>A wise man once said: "if something sounds too good to be true - it 
>
>probably is"
>
>
>
>- I am sure they are just after the $150 fee - they won't even bother 
>
>going after the free postage

Re: What Do You Think?

[David A. Ulevitch]

>
> Incidentally, does anyone know the origin of "if something sounds too good
> to
> be true - it
> probably is?"  While I'm sure that at many points one wise man or another
> has
> said it, I wonder who said it first--and whether it might not have been a
> wise woman.  :)

Was it not the maker of fortune cookies at cheap chinese take-out's?

heh.

-davidu


   David A. Ulevitch -- http://david.ulevitch.com
  http://everydns.net -+- http://communitycolo.net
Campus Box 6957 + Washington University in St. Louis

Re: Levitt article

[fabio guillermo rojas]

> 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

[AdmrlLocke]

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

In a message dated 8/4/03 8:07:18 PM, [EMAIL PROTECTED] writes:

>I did not quite mean that most economists were as clever as Levitt.  I
>meant
>
>only that the kinds of problems Levitt works on are now pretty standard.
>
>Crime has been a common topic among economists for decades.  The reference
>
>to Levitt's work on real estate agents is basically just agency theory,
>
>again a topic for empirical work for some years.  I do not mean to denigrate
>
>Levitt's creativity, which is simply huge.  My complaint was about the
>way
>
>the Times told the story.  They made it sound as if economists sit around
>
>all day making vague philosophical observations about capitalism and
>
>socialism, or something like that, rather than working on the small problems
>
>that most of us spend most of our time working on.
>
>Bill Sjostrom

Re: Levitt article

[William Sjostrom]

> In an earlier message, William Sjostrom suggested that Levitt's research
> is typical of the economics field. I am very curious about this statement,
> because it is at odds with my casual empiricism, and I would like to see
> it backed by some concrete evidence. Perhaps this reflects my own
> ignorance of the literature, but I would like to know who
> does such clever, but careful empirical work. If this is true, I'd like
> to read it. Are there people out there that collect interesting data to
> approach previously intractable questions from a new direction?

I did not quite mean that most economists were as clever as Levitt.  I meant
only that the kinds of problems Levitt works on are now pretty standard.
Crime has been a common topic among economists for decades.  The reference
to Levitt's work on real estate agents is basically just agency theory,
again a topic for empirical work for some years.  I do not mean to denigrate
Levitt's creativity, which is simply huge.  My complaint was about the way
the Times told the story.  They made it sound as if economists sit around
all day making vague philosophical observations about capitalism and
socialism, or something like that, rather than working on the small problems
that most of us spend most of our time working on.
Bill Sjostrom


+
William Sjostrom
Senior Lecturer
Centre for Policy Studies
National University of Ireland, Cork
5 Bloomfield Terrace, Western Road
Cork, Ireland

+353-21-490-2091 (work)
+353-21-490-3658 (fax)
+353-21-463-4056 (home)
[EMAIL PROTECTED]
[EMAIL PROTECTED]
www.ucc.ie/~sjostrom/

Re: Levitt article

[Daniel Houser]

In my own biased view, one such group are experimentalists. The best
experimental work provides extremely clever manipulations that generate data
to address previously empirically intractable questions. The AER is full of
such clever and careful work. Recent AER examples include Henrich et. al.'s
efforts to use experiments to learn about how trust and market performance
are related, Fehr et. al.'s efforts to examine the effect of sanctions on
cooperation, List et. al.'s field experiments with baseball cards, and on
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

- Original Message - 
From: "Dimitriy V. Masterov" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Monday, August 04, 2003 3:52 PM
Subject: Re: Levitt article


>
> In an earlier message, William Sjostrom suggested that Levitt's research
> is typical of the economics field. I am very curious about this statement,
> because it is at odds with my casual empiricism, and I would like to see
> it backed by some concrete evidence. Perhaps this reflects my own
> ignorance of the literature, but I would like to know who
> does such clever, but careful empirical work. If this is true, I'd like
> to read it. Are there people out there that collect interesting data to
> approach previously intractable questions from a new direction?
>
> The best example of this that I can think of is a working paper that
> estimated the scope of corruption in Indonesia by looking at how the stock
> prices of companies that has close links to the Suharto government reacted
> to news about his health. I can't seem to find this paper to provide you
> with a citation.
>
>
> Dimitriy V. Masterov
>
>
>

___
> Dimitriy V. Masterov
>
> Center for Social Program Evaluation
> 1155 East 60th St. Room 038
> Chicago, IL 60637
> Work: (773)256-6005
> Fax: (773)256-6313
>
>
>
>

Re: Levitt article

[Dimitriy V. Masterov]

In an earlier message, William Sjostrom suggested that Levitt's research
is typical of the economics field. I am very curious about this statement,
because it is at odds with my casual empiricism, and I would like to see
it backed by some concrete evidence. Perhaps this reflects my own
ignorance of the literature, but I would like to know who
does such clever, but careful empirical work. If this is true, I'd like
to read it. Are there people out there that collect interesting data to
approach previously intractable questions from a new direction?

The best example of this that I can think of is a working paper that
estimated the scope of corruption in Indonesia by looking at how the stock
prices of companies that has close links to the Suharto government reacted
to news about his health. I can't seem to find this paper to provide you
with a citation.


Dimitriy V. Masterov


___
Dimitriy V. Masterov

Center for Social Program Evaluation
1155 East 60th St. Room 038
Chicago, IL 60637
Work: (773)256-6005
Fax: (773)256-6313

Re: Levitt article

[fabio guillermo rojas]

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

Re: Levitt article

[William Sjostrom]

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


- Original Message - 
From: "Alex Tabarrok" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Monday, August 04, 2003 2:34 PM
Subject: Re: Levitt article


> Here it is.  Fabio, we expect better work from you next time!  :-)
>
> Alex
>
>
http://www.nytimes.com/2003/08/03/magazine/03LEVITT.html?pagewanted=print&position=
>
> -- 
> Alexander Tabarrok
> Department of Economics, MSN 1D3
> George Mason University
> Fairfax, VA, 22030
> Tel. 703-993-2314
>
> Web Page: http://mason.gmu.edu/~atabarro/
>
> and
>
> Director of Research
> The Independent Institute
> 100 Swan Way
> Oakland, CA, 94621
> Tel. 510-632-1366
>
>
>
>
>
>

Re: Levitt article

[Alex Tabarrok]

Here it is.  Fabio, we expect better work from you next time!  :-)

Alex

http://www.nytimes.com/2003/08/03/magazine/03LEVITT.html?pagewanted=print&position=

--
Alexander Tabarrok 
Department of Economics, MSN 1D3 
George Mason University 
Fairfax, VA, 22030 
Tel. 703-993-2314

Web Page: http://mason.gmu.edu/~atabarro/ 

and 

Director of Research 
The Independent Institute 
100 Swan Way 
Oakland, CA, 94621 
Tel. 510-632-1366 

Re: Senators Denounce Policy Analysis Markets

[john-morrow]

I think you could get into a whole lot of trouble since for any event you
predict that happens, if the common opinion is that you have somehow encouraged
it, the burden of proof on the civil level will effectively be on you to show
that you haven't, which of course will likely be impossible.  Also, from
questions I asked some of the IEM people a while back, the story goes that most
futures markets require heavy regulation, and that they managed to get a "no
action" letter from some agency that guaranteed they would not be hassled with
it, since otherwise they could be.  The other alternative is to put up your own
money prizes for futures, so that you are "giving it away creatively," but that
doesn't really help with the above problem.  I'm sure there must be some people
on here that had a hand in the Arizona exchange, and I would be thrilled to hear
the story of how they managed that.

Quoting fabio guillermo rojas <[EMAIL PROTECTED]>:

> 
> > 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

[David A. Ulevitch]

> 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?

Games, in and of themselves, are not illegal.  Even the program setup by
the pentagon violated no laws I am aware of...(as if it's possible to know
them all...).

Again, if others are interested in getting this setup, I'm for it -- then
again, it looks like some of the other futures site's on the web have
already created DHS,Terrorism and other related sections to their sites so
it may be a moot point at this juncture.

And if the (US) gov. decided it had a problem with running it, we have
limited colocation resources outside of the US for this very reason. As an
aside, most of my servers (except email and a few others) drop traffic
originiating from DoD or other government registered IP space.

Thanks,
davidu


   David A. Ulevitch -- http://david.ulevitch.com
  http://everydns.net -+- http://communitycolo.net
Campus Box 6957 + Washington University in St. Louis

Re: Senators Denounce Policy Analysis Markets

[fabio guillermo rojas]

> 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: Free State Project

[AdmrlLocke]

In a message dated 7/31/03 2:29:47 PM, [EMAIL PROTECTED] writes:

>The problem with the free state project is that so much of the architecture
>
>of the corporate state is centered on the federal government.  But there's
>a 
>lot of stuff that could be done within the control of a state government.

The real problem with the free state project is implementing it.

Re: Senators Denounce Policy Analysis Markets

[David A. Ulevitch]

>
> Could this not be an opportunity? Maybe a private sponsor could set up the
> market? Fabio

Fabio,

While I have privately told Robin that I do not support the implementation
of the Ideas Futures by the Pentagon, I do believe the concept of Ideas
Futures certainly has potential benefits as well as a need for futher
implementations.

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


   David A. Ulevitch -- http://david.ulevitch.com
  http://everydns.net -+- http://communitycolo.net
Campus Box 6957 + Washington University in St. Louis

Re: Free State Project

[Kevin Carson]

The problem with the free state project is that so much of the architecture 
of the corporate state is centered on the federal government.  But there's a 
lot of stuff that could be done within the control of a state government.

1) an unconditional retreat from the drug war.  The federal drug war depends 
heavily on intergovernmental task forces and cooperation from state and 
local police.  Don't give it to them.  Likewise, no cooperation with the 
feds on unconstitutional "counter-terror" enforcement.

2) eliminate all civil forfeiture, period.

3) abolish city-wide school boards and place each school under the direct 
control of the parents whose kids attend, as a consumers' co-op.  Likewise, 
make state university boards of trustees responsible to students in 
proportion as the universities' revenues come from tuition.  As for the 
remaining trustees, the faculty gets to appoint as many as the state does.  
Non-refundable property tax credit for home schoolers equal to per-student 
education spending.

3) likewise decentralize police forces to the smallest possible (ideally 
neighborhood) unit, encourage citizen patrols as something more than a 
passive partner of professional law enforcement (as in existing neighborhood 
watch programs), and end all state and local restrictions on concealed 
carry.

2) jury rights to decide questions of law as well as fact.

4) place all city and state ("public") hospitals under the cooperative 
control of their clients.

5)  the same goes for all government-owned utilities.

6)  fund all highways on a cost-based user fee basis, based on who imposes 
the most actual cost on the system (primarily a weight-based fee on trucks 
via a turnpike system, probably).

7)  no imminent domain, period.  No special tax breaks or other corporate 
welfare to encourage corporations to locate their plants in the state-all 
taxes on business at a flat rate, no deductions or exemptions.  No taxpayer 
funded industrial parks, stadiums, etc.

8) all savings in spending (like eliminination, pursuant to ending the drug 
war, of half the prison inmates) translated into tax cuts from the bottom 
up, by increasing personal income tax exemptions or the homestead property 
tax exemption.  Exemption of necessities from sales tax.

9)  end to all zoning restrictions against mixed use development in suburbs, 
or against affordable housing (like walk-ups) in downtown business areas.  
No more utility subsidies to new housing developments at expense of 
centrally located neighborhoods.

10) no vice laws.

11) end to professional licensing, anit-jitney laws, etc.

With all these reforms, you might not have to worry about the wrong kind of 
immigrants.  I don't think Hillary, Rosie or Barbra could come within a 
hundred miles of the state without developing a case of the vapors.


From: Christopher Rasch <[EMAIL PROTECTED]>
Reply-To: [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Subject: Free State Project
Date: Thu, 24 Jul 2003 15:52:10 -0400
Hi,

Those of you with an interest in political reform and innovation may
wish to check out the Free State Project.
(http://www.freestateproject.org).  The idea is to concentrate 20,000
libertarian activists in a small-population state, so that they will
have sufficient voting power to win political office.  From the web site:
"...The Free State Project is a plan in which 20,000 or more
liberty-oriented people will move to a single state of the U.S., where
they may work within the political system to reduce the size and scope
of government. The success of the Free State Project would likely entail
reductions in burdensome taxation and regulation, reforms in state and
local law, an end to federal mandates, and a restoration of
constitutional federalism, demonstrating the benefits of liberty to the
rest of the nation and the world"
When you become a member, you agree to move to the Free State once
20,000 people have made the same pledge, within 5 years of reaching the
20 K mark.  When 5000 people sign up, a vote on the state will be held.
Currently 10 states are in the running:  New Hampshire, Wyoming,
Vermont, Maine, Delaware, Alaska, North Dakota, South Dakota, Idaho, and
Montana.
What 20,000 libertarian activists could accomplish:

http://www.freestateproject.org/strategies.htm

State comparisons:

http://www.freestateproject.org/state.htm

The appeal for the  libertarian-minded is obvious, but non-libertarians
may also be interested.  Since the chosen state will be as free as the
FSP can make it, if the state becomes a hell-hole, then those opposed to
libertarian ideas can use it as an object lesson.  Socialists could also
use the same strategy --move 20 K socialist activists to Vermont, say,
and implement the Guaranteed Universal Income, strict environmental
regulations, gun bans, high import taxes, a highly progressive tax
system, and increased welfare and public school programs.  Whatever
happens, the comparison between the two states should be very interesti

Re: Senators Denounce Policy Analysis Markets

[Peter C. McCluskey]

 [EMAIL PROTECTED] (fabio guillermo rojas) writes:
>
>Could this not be an opportunity? Maybe a private sponsor could set up the
>market? Fabio 

 There are nontrivial regulatory costs to doing it privately in the U.S.,
which probably became a good deal more serious now that politicians are
scared of the idea.
 But the publicity has probably increased the rewards for tradesports.com
(located in Ireland) to expand, and for other non-U.S. companies to compete
with it.
-- 
--
Peter McCluskey  | "To announce that there must be no criticism of
http://www.rahul.net/pcm | the President, or that we are to stand by the
 | President right or wrong, is not only unpatriotic
 | and servile, but morally treasonable to the
 | American public." - Theodore Roosevelt

Re: Senators Denounce Policy Analysis Markets

[fabio guillermo rojas]

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

[AdmrlLocke]

In a message dated 7/29/03 9:50:07 PM, [EMAIL PROTECTED] writes:

>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.

What?  People in the liberal-statist news media more behaving irrationally?  
more interested in emtionalism than facts?  Whodda thunk it?

Re: Senators Denounce Policy Analysis Markets

[Robin Hanson]

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: California Recall

[Fred Foldvary]

Schwartzeneger will not run, so Riordan, a Republican 2002 primary-election
candidate, will run, and is most likely to win the plurality race. 
Negative ads knocked him off the general election in 2002, but will not
work so easily this time.

> What's the predicted outcome? 
> Fabio 


=
[EMAIL PROTECTED]

Re: California Recall

[AdmrlLocke]

In a message dated 7/29/03 11:32:51 AM, [EMAIL PROTECTED] writes:

>--- [EMAIL PROTECTED] wrote:
>> I'd wager 
>> $10 that Davis will be recalled--and then win reelection. 
>> David
>
>Does the recall law permit the incumbent to be on the ballot for the new
>governor if he loses the recall?
>Fred 

Well if not then I don't bet my pretend-$10 that he'll get reeleted on it!  


David

Re: Senators Denounce Policy Analysis Markets

[Sampo Syreeni]

On 2003-07-28, Robin Hanson uttered:

>FYI, our DARPA project (www.policyanalysismarket.com) has just been
>denounced by two senators:
>http://wyden.senate.gov/media/2003/07282003_terrormarket.html

It's still a nice plan. Much like Brunner's delphi pools in Shockwave
Rider. (BTW, if anybody ever tried to patent artificial markets like
these, it'd be highly interesting to know whether sufficiently exacting
scifi qualifies as prior art.)

What I'm wondering, though, is asymmetric information. General contingent
markets are basically complicated markets in risk, and the claims traded a
form of insurance based on risk sharing. So the same problems apply to
them that do to insurance. If we're betting on diffuse, difficult to
influence risks, there's no problem. But if we bet on something individual
market participants can change, we have to consider things like moral
hazard and adverse selection. I mean, because of the efficient market
hypothesis, the ideal contingent market only allows profits to someone
bringing in new information. That's why betting on whether someone will be
assassinated will give an unreasonable edge in information to an assassin,
and will actually spawn assassinations. (Assassinations are probably
cheaper than defending against them if true anonymity is present.)
That's also why the market could turn into a twisted incarnation of
Assassination Politics (http://jya.com/ap.htm).

Furthermore -- unlike the original AP proposal -- these are futures
markets where you can speculate and win without pulling the trigger.
Rational bubbles can form, and those will in case turn the bet on an
assassination into a self-fulfilling prophecy (early investors will have
an incentive to rig the wheel, so to speak). When this happens, the ill
effects of moral hazard will be amplified, and we can't rely on the
resulting assassinations being reasonable even to the degree we can with
garden variety AP.

To someone with a penchant for conspiracy theories, then, all this would
probably count as one of DARPA's tacit aims.
-- 
Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2

Re: Senators Denounce Policy Analysis Markets

[mhc_lists]

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
> 
> On Mon, 28 Jul 2003, Robin Hanson wrote:
> 
> > 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

[Chirag Kasbekar]

Yes, it's kicking up a wee bit of a storm (!) in 
the blogosphere. Lefty blogs (some appreciative) on this include:The 
excellent Crooked Timber:http://www.crookedtimber.org/archives/000307.htmlEschaton:http://atrios.blogspot.com/2003_07_27_atrios_archive.html#105948321498376331A Berkeley Economist Against Empire:http://www.demog.berkeley.edu/~gabriel/weblog/2003_07_01_archive.html#105948868666134845Josh 
Marshall:http://talkingpointsmemo.com/july0304.html#072803605pm
Mathew Yglesias:http://www.matthewyglesias.com/archives/001030.html#001030--Chirag
 
- Original Message - From: "Christopher 
Rasch" <[EMAIL PROTECTED]>To: <[EMAIL PROTECTED]>Sent: 
Tuesday, July 29, 2003 8:54 PMSubject: Re: Senators Denounce Policy Analysis 
Markets> Glenn Reynolds (Instapundit) blogged about the DARPA 
project controversy:> > THE PENTAGON WANTS TO USE A FUTURES MARKET 
>  to predict 
terror > attacks. Although this is getting a lot of criticism (mostly 
from > members of Congress who, I suspect, couldn't accurately describe 
the > operation of /existing/ futures markets) I think it's an excellent 
> example of creative thinking, and the Pentagon deserves to be > 
congratulated for it. As I've suggested before (here > 
, 
> here, > 
 
> and especially here > 
) 
> the diffuse, fast-moving threat of terrorism requires a diffuse, 
> fast-moving response. And this sounds like a very plausible way of 
> recruiting a lot of minds in the service of anti-terrorism.> 
> Josh Chafetz agrees: > 
> 
> A futures market in terrorist attacks, while it 
sounds grisly, may> help us to aggregate diffuse 
knowledge in a way that will prove> superior to 
expert knowledge. It also may not, but it seems to 
me> that it's worth a try. At the very least, if 
we're going to demand> that the government get 
creative in fighting terror, we shouldn't be> so 
quick to criticize when it does just that.> > Yep.> 
> UPDATE: Reader Fred Butzen emails:> 
> The story about the Pentgon's "terrorism 
market" clearly is an> extension of Iowa 
Electronic Markets, which has been run for years> 
by the University of Iowa's Tippett School of Business. Here's 
a> link to the Iowa Information Market's web 
site:> > Link 
> > 
In brief, the IEM lets persons place bets on the likelihood of 
given> events' happening; for example, people 
could bet on the likelihood> that Saddam Hussein 
will survive this year, or who will win the next> 
presidential election. The collective expertise of the 
participants> has proven to be extremely useful 
in predicting events.> > The notion that 
the dim-bulbs in Congress and the media should> 
attack such a useful and proven idea as the Pentagon's is 
utterly> absurd.> > This is 
absolutely right. Whether or not the Pentagon's idea is a good > one 
depends on details I don't know about. But the lame criticism makes > 
clear that the critics are -- as usual -- clueless on the subject.> 
> ANOTHER UPDATE: Mitch Berg points out > 
 
> that this approach has worked in the past.> > posted at 
08:44 AM by *Glenn Reynolds* > 
> > > 
Robin Hanson wrote:> > > 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

[fabio guillermo rojas]

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: Senators Denounce Policy Analysis Markets

[Jeffrey Rous]

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.

Re: Senators Denounce Policy Analysis Markets

[Eric Crampton]

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

On Mon, 28 Jul 2003, Robin Hanson wrote:

> 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

[Christopher Rasch]

Glenn Reynolds (Instapundit) blogged about the DARPA project controversy:

THE PENTAGON WANTS TO USE A FUTURES MARKET 
 to predict terror 
attacks. Although this is getting a lot of criticism (mostly from 
members of Congress who, I suspect, couldn't accurately describe the 
operation of /existing/ futures markets) I think it's an excellent 
example of creative thinking, and the Pentagon deserves to be 
congratulated for it. As I've suggested before (here 
, 
here, 
 
and especially here 
) 
the diffuse, fast-moving threat of terrorism requires a diffuse, 
fast-moving response. And this sounds like a very plausible way of 
recruiting a lot of minds in the service of anti-terrorism.

Josh Chafetz agrees: 


   A futures market in terrorist attacks, while it sounds grisly, may
   help us to aggregate diffuse knowledge in a way that will prove
   superior to expert knowledge. It also may not, but it seems to me
   that it's worth a try. At the very least, if we're going to demand
   that the government get creative in fighting terror, we shouldn't be
   so quick to criticize when it does just that.
Yep.

UPDATE: Reader Fred Butzen emails:

   The story about the Pentgon's "terrorism market" clearly is an
   extension of Iowa Electronic Markets, which has been run for years
   by the University of Iowa's Tippett School of Business. Here's a
   link to the Iowa Information Market's web site:
   Link 

   In brief, the IEM lets persons place bets on the likelihood of given
   events' happening; for example, people could bet on the likelihood
   that Saddam Hussein will survive this year, or who will win the next
   presidential election. The collective expertise of the participants
   has proven to be extremely useful in predicting events.
   The notion that the dim-bulbs in Congress and the media should
   attack such a useful and proven idea as the Pentagon's is utterly
   absurd.
This is absolutely right. Whether or not the Pentagon's idea is a good 
one depends on details I don't know about. But the lame criticism makes 
clear that the critics are -- as usual -- clueless on the subject.

ANOTHER UPDATE: Mitch Berg points out 
 
that this approach has worked in the past.

posted at 08:44 AM by *Glenn Reynolds* 


Robin Hanson wrote:

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: California Recall

[Fred Foldvary]

--- [EMAIL PROTECTED] wrote:
> I'd wager 
> $10 that Davis will be recalled--and then win reelection. 
> David

Does the recall law permit the incumbent to be on the ballot for the new
governor if he loses the recall?
Fred 


=
[EMAIL PROTECTED]

Re: California Recall

[Fred Foldvary]

--- fabio guillermo rojas <[EMAIL PROTECTED]> wrote:
> 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.
> Fabio 

If Governor Davis is recalled, the election for the next California
governor will be won by a plurality.  With many candidates on the ballot, a
well-organized group can win the plurality even if they have a small total
portion of the vote.  So far, the Democrats do not want to put up a major
candidate because that would increase the vote to recall the incumbent.  So
the optimal strategy for the Democrats would be for Davis to win the recall
election, thus they are avoiding providing an attractive Democrat
alternative.

Fred Foldvary

=
[EMAIL PROTECTED]

RE: Senators Denounce Policy Analysis Markets

[Barney Hamish]

This story has even made it to Technology news site Slashdot
(www.slashdot.org)
http://slashdot.org/article.pl?sid=03/07/29/1249247&mode=thread&tid=126&tid=
95

Perhaps you'd like to contribute to the discussion there to fight against
the prevailing negative mood.
Hamish

> -Original Message-
> From: Robin Hanson [mailto:[EMAIL PROTECTED]
> Sent: Monday, July 28, 2003 8:56 PM
> To: [EMAIL PROTECTED]; [EMAIL PROTECTED]
> Subject: Senators Denounce Policy Analysis Markets
> 
> 
> 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

[AdmrlLocke]

In a message dated 7/29/03 4:05:03 AM, [EMAIL PROTECTED] writes:

>The Pentagon office that proposed spying electronically on Americans to
>monitor potential terrorists has a new experiment.

This is typical of the statist-liberal news media--starting a "news" article 
with an ad homenim attack.

DBL

Re: Senators Denounce Policy Analysis Markets

[pboettke]

The NYT article on this 


Pentagon Prepares a Futures Market on Terror Attacks
By CARL HULSE


ASHINGTON, July 28 — The Pentagon office that proposed spying electronically on 
Americans to monitor potential terrorists has a new experiment. It is an online 
futures trading market, disclosed today by critics, in which anonymous speculators 
would bet on forecasting terrorist attacks, assassinations and coups.

Traders bullish on a biological attack on Israel or bearish on the chances of a North 
Korean missile strike would have the opportunity to bet on the likelihood of such 
events on a new Internet site established by the Defense Advanced Research Projects 
Agency. 

The Pentagon called its latest idea a new way of predicting events and part of its 
search for the "broadest possible set of new ways to prevent terrorist attacks." Two 
Democratic senators who reported the plan called it morally repugnant and grotesque. 
The senators said the program fell under the control of Adm. John M. Poindexter, 
President Ronald Reagan's national security adviser.

One of the two senators, Byron L. Dorgan of North Dakota, said the idea seemed so 
preposterous that he had trouble persuading people it was not a hoax. "Can you 
imagine," Mr. Dorgan asked, "if another country set up a betting parlor so that people 
could go in — and is sponsored by the government itself — people could go in and bet 
on the assassination of an American political figure?" 

After Mr. Dorgan and his fellow critic, Ron Wyden of Oregon, spoke out, the Pentagon 
sought to play down the importance of a program for which the Bush administration has 
sought $8 million through 2005. The White House also altered the Web site so that the 
potential events to be considered by the market that were visible earlier in the day 
at www.policyanalysismarket.org could no longer be seen.

But by that time, Republican officials in the Senate were privately shaking their 
heads over the planned trading. One top aide said he hoped that the Pentagon had a 
good explanation for it.

The Pentagon, in defending the program, said such futures trading had proven effective 
in predicting other events like oil prices, elections and movie ticket sales.

"Research indicates that markets are extremely efficient, effective and timely 
aggregators of dispersed and even hidden information," the Defense Department said in 
a statement. "Futures markets have proven themselves to be good at predicting such 
things as elections results; they are often better than expert opinions."

According to descriptions given to Congress, available at the Web site and provided by 
the two senators, traders who register would deposit money into an account similar to 
a stock account and win or lose money based on predicting events.

"For instance," Mr. Wyden said, "you may think early on that Prime Minister X is going 
to be assassinated. So you buy the futures contracts for 5 cents each. As more people 
begin to think the person's going to be assassinated, the cost of the contract could 
go up, to 50 cents.

"The payoff if he's assassinated is $1 per future. So if it comes to pass, and those 
who bought at 5 cents make 95 cents. Those who bought at 50 cents make 50 cents."

The senators also suggested that terrorists could participate because the traders' 
identities will be unknown.

"This appears to encourage terrorists to participate, either to profit from their 
terrorist activities or to bet against them in order to mislead U.S. intelligence 
authorities," they said in a letter to Admiral Poindexter, the director of the 
Terrorism Information Awareness Office, which the opponents said had developed the 
idea. 

The initiative, called the Policy Analysis Market, is to begin registering up to 1,000 
traders on Friday. It is the latest problem for the advanced projects agency, or 
Darpa, a Pentagon unit that has run into controversy for the Terrorism Information 
Office. Admiral Poindexter once described a sweeping electronic surveillance plan as a 
way of forestalling terrorism by tapping into computer databases to collect medical, 
travel, credit and financial records. 

Worried about the reach of the program, Congress this year prohibited what was called 
the Total Information Awareness program from being used against Americans. Its name 
was changed to the Terrorism Information Awareness program.

This month, the Senate agreed to block all spending on the program. The House did not. 
Mr. Wyden said he hoped that the new disclosure about the trading program would be the 
death blow for Admiral Poindexter's plan.

The Pentagon did not provide details of the program like how much money participants 
would have to deposit in accounts. Trading is to begin on Oct. 1, with the number of 
participants initially limited to 1,000 and possibly expanding to 10,000 by Jan. 1.

"Involvement in this group prediction process should prove engaging and may prove 
profitable," the Web site said.

The 

Re: Senators Denounce Policy Analysis Markets

[John Morrow]

I've been raring to go with the pam markets for a while now -- 
condolences.  Many people here are probably aware of it, but you can also 
check out (and participate in!) the Iowa Electronic Markets online at the 
University of Iowa, http://www.biz.uiowa.edu/iem/
which have a reasonable track record for political markets -- perhaps you 
can petition them to run a market for Arnold in CA.

At 02:56 PM 7/28/2003 -0400, you wrote:
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: California Recall

[fabio guillermo rojas]

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 

RE: Senators Denounce Policy Analysis Markets

[Mike Cardwell]

Yeah, you also made the front page of the Drudge Report
(http://www.drudgereport.com) via its link to
http://www.thewbalchannel.com/news/2363276/detail.html.

So much for fair and balanced reporting :|

-Original Message-
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf
Of Robin Hanson
Sent: Monday, July 28, 2003 2:56 PM
To: [EMAIL PROTECTED]; [EMAIL PROTECTED]
Subject: Senators Denounce Policy Analysis Markets


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: California Recall

[AdmrlLocke]

In a message dated 7/28/03 9:10:55 PM, [EMAIL PROTECTED] writes:

>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

If I weren't so broke that I just got a power disconnection notice, I'd wager 
$10 that Davis will be recalled--and then win reelection.  I try never to 
underestimate the ability of the GOP, especially the CA GOP, to snatch defeat 
from the jaws of victory.

David

Re: Absolute vs. relative income level

[Fred Foldvary]

--- Tigger <[EMAIL PROTECTED]> wrote:

> Fred (& Alpius) are acting dense.

Density is efficient.  With greater density, we get more mass per volume,
thus a more efficient use of space.

> A desire to earn more than the neighbors seems to say that at a level
> equal to the neighbor, the next dollar has a (much?) greater return than
> the prior few dollars--obviously contradicting the "diminishing".

This does not contradict diminishing marginal utility.  DMU proposes that
for a given good, after some amount, extra amounts yield ever diminishing
extra utility.
For a different good, marginal utility starts all over again.  I get
diminishing marginal utility from consuming more and more apple, but if I
switch to organge, my marginal utility can go up.

The good of beating one's neighbor is a different good than that goods
obtained for incomes up to that of the neighbor.

If a particular threshold of income is needed in order to get utility from
a good (i.e. having more than the neighbor), marginal utility theory is not
contradicted but simply does not apply.  The maximization of utility from a
mix of goods implies that the goods are obtainable.  Once one achieves the
threshold and can then obtain the good, marginal utility kicks in.  One
gets more of the new good until its marginal utility per cost is equal to
that of anything else.  The implication is that after the threshold, one
would strive to get more income until extra neighbor-beating has the same
utility as extra other goods or extra leisure.

Fred Foldvary

=
[EMAIL PROTECTED]

Re: Absolute vs. relative income level

[john hull]

> "A desire to earn more than the neighbors seems to
say that at a level equal to the neighbor, the next
dollar has a (much?) greater return than the prior few
dollars--obviously contradicting the "diminishing"."  

Um...why should we think that?  If my neighbor has X
dollars, why would my going from X to X+1 be a greater
step for me than going from X-1 to X?  The last step
in a journey may be more "satisfying" than the first
since it coincides with the trek being completed, but
does that, in general, strike down the idea of
diminishing returns?  The utility doesn't seem to be
coming from the X+1th dollar per se, rather it seems
to be coming from consuming a good we can call
"beating the joneses".  The utility rise comes from
the consumption of the good, i.e. the psychic benefit
of beating my neighbor in the income race, and not
from any intrinsic value to that particular jump in income.

__
Do you Yahoo!?
Yahoo! SiteBuilder - Free, easy-to-use web site design software
http://sitebuilder.yahoo.com

Re: Absolute vs. relative income level

[Tigger]

> > i think there is a at least partial contradiction between the hypothesis
> > of diminishing marginal return of income and the hypothesis that people
> > care about consuming more than their neighbors or about earning more
than
> > their neighbors (Frank: Luxury Fever). If the latter is true than the
> > first hypothesis is weak. What do you think about this?
> > Steffen
>
> If the latter is true, it too can be subject to diminishing marginal
> returns.  So where is the contradiction?
> Fred Foldvasry

I think Steffen is onto something very important, and Fred (& Alpius) are
acting
dense.  After food, clothing, etc., diminishing marginal return says the
next dollar
of income has a lower (or perhaps often only equal?) marginal return.

A desire to earn more than the neighbors seems to say that at a level equal
to the neighbor,
the next dollar has a (much?) greater return than the prior few
dollars--obviously contradicting the
"diminishing".  (Prolly non-linearly; but so what if reality is difficult to
model?)

And I think this very important, under studied issue is behind the "rat
race", as well as
America's high consumption & high productivity.

I often talk, here in Slovakia, about the Russian and American dreams:
An American farmer lives next door to another farmer with a prize cow.
A Russian farmer's nearest neighbor has a prize cow.
The American farmer dreams that he has a better cow than his neighbor.
The Russian farmer dreams that his neighbor's cow, dies.

American Admiration Envy violates the assumption of diminishing marginal
returns.
(I often often think of these envy differences, but hadn't related them to
marginal returns.)

I'm not so sure about Russian Destructive Envy -- but I AM sure that this is
the envy which
is sinful, and terrible.

Tom Grey

P.S.  If, as in both Slovak and Russian privatization, only the very corrupt
were greatly benefiting, the admirable desire for punishing justice is
indistinguishable from destructive envy.

Re: Absolute vs. relative income level

[alypius skinner]

> Dear armchairs,
>
> i think there is a at least partial contradiction between the hypothesis
of diminishing marginal return of income and the hypothesis that people care
about consuming more than their neighbors or about earning more than their
neighbors (Frank: Luxury Fever). If the latter is true than the first
hypothesis is weak. What do you think about this?
>
> Steffen
>
I don't see a contradiction.  Once people have enough money for food,
housing, keeping up with the Jones's, (or perhaps besting the Jones's),
etc., then additional income beyond that level has less perceived value.

~Alypius

Re: Absolute vs. relative income level

[Fred Foldvary]

> i think there is a at least partial contradiction between the hypothesis
> of diminishing marginal return of income and the hypothesis that people
> care about consuming more than their neighbors or about earning more than
> their neighbors (Frank: Luxury Fever). If the latter is true than the
> first hypothesis is weak. What do you think about this?
> Steffen

If the latter is true, it too can be subject to diminishing marginal
returns.  So where is the contradiction?
Fred Foldvasry


=
[EMAIL PROTECTED]

Re: Greider

[Bryan Caplan]

Robert A. Book wrote:
Greider also has interesting material on the Democrats' connection to 
the S&L industry.  I'd never heard about any of this, but he seems to 
have his facts straight on this point.

Wrong hasn't been so much fun in years!
--


Bryan, if he's wrong about the material you know a lot about, what
makes you think he has his facts straight on the subjects you know
less about?
Shouldn't his obvious errors on cost/benefit, risk analysis, and
corporate accountability reduce the prior probability (to you) that
he's right on anything?
Good question.  Sure, errors in one area raise the probability of errors 
in other areas.  But he's a journalist.  I expect him to be weak on 
analytics.  The 5 W's of who-what-when-where-why are what he's trained 
to get right.


--Robert Book





--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
"Infancy conforms to nobody: all conform to it, so that
 one babe commonly makes four or five out of the adults
 who prattle and play to it."
 --Ralph Waldo Emerson, "Self-Reliance"

Re: Greider

[Robert A. Book]

> Greider also has interesting material on the Democrats' connection to 
> the S&L industry.  I'd never heard about any of this, but he seems to 
> have his facts straight on this point.
> 
> Wrong hasn't been so much fun in years!
> -- 


Bryan, if he's wrong about the material you know a lot about, what
makes you think he has his facts straight on the subjects you know
less about?

Shouldn't his obvious errors on cost/benefit, risk analysis, and
corporate accountability reduce the prior probability (to you) that
he's right on anything?


--Robert Book

Re: fertility and government

[John Morrow]

I'm curious if anyone is aware of an instance, where a conscious,
explicit choice was made in government policy to choose higher total GDP
over higher per capita GDP, or vice versa.
It seems to me that most any policy restricting immigration is choosing to 
maximize per capita GDP over total GDP and has that more or less in mind, 
which also goes along the lines of the voting bodies preference of higher 
per capita GDP.

Re: fertility and government

[Robin Hanson]

On 7/18/2003, Wei Dai wrote:
I think maybe the answer is that a dictator has an economic incentive to
maximize total GDP, while a voter has an incentive to maximize per capita
GDP instead. ...
If the new capitas were coming from immigration this makes sense, but if
they are coming from children, this doesn't make sense because people care
about the existence and GDP of their children.
Also, my reading of that paper is that the total GDP effect was not
statistically significant, while the fertility effect was significant.
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: fertility and government

[Wei Dai]

On Tue, Jul 15, 2003 at 07:04:27PM -0400, Robert A. Book wrote:
> [...]  The point
> I was tryign to make is that it's possible for a dictatorship to
> depress child-rearing opportunities less than other opportunities,
> thus making child-rearing relatively more attractive.

Why do you think dictatorships tend to depress people's non-child-rearing
opportunities more than their child-rearing opportunities? Note that this
is a matter of choice for the government. Certainly dictators can choose
to depress people's child-rearing opportunities very heavily if they want
to. Just look at China's one-child policy.

The article said average GDP growth in dictatorships is faster
than in democracies because of higher fertility, meaning this
"depression of opportunities" is actually causing the total wealth of the
country (including human capital) to grow faster, which doesn't seem very 
plausible.

I think maybe the answer is that a dictator has an economic incentive to
maximize total GDP, while a voter has an incentive to maximize per capita
GDP instead. The dictator owns all government revenue, which is directly
related to total GDP. The voter has only a proportional claim to
government revenue. The more people there are, the greater the GDP and
government revenue, but also the more people he has to share it with, so
he only cares about per capita GDP. Perhaps the difference in fertility 
reflect perfectly rational policy decisions made by those in control of 
governments.

I'm curious if anyone is aware of an instance, where a conscious,
explicit choice was made in government policy to choose higher total GDP
over higher per capita GDP, or vice versa.

Re: fertility and government

[Jacob W Braestrup]

I believe Robert (and others) is (are) onto something.

If we look at having children as an (potential) old-age investment, 
then it is - in most dictaturships today - a very safe one (compaired 
to having land [zimbabwe] or money in the bank [argentina], etc etc.). 
In most democracies (capitalist countries) there are several other 
invcenstments with much higher pay-offs and much lower risks - in fact, 
one may argue that children have become a consumer good, rather than an 
investment.

That still leaves the low fertility in the soviet countries, but 
possibly this could be explained by the fact that your old age was 
actually "taken care of"...

- Jacob Braestrup, Special Adviser 

> > In a message dated 7/14/03 9:52:40 PM, [EMAIL PROTECTED] writes:
> > 
> > >A few people seem to have skipped over the first sentence of my 
post. 
> > >
> > >The article said that fertility rate is higher in dictatorships 
than in
> > >democracies at *all income levels*. Meaning if you take any income 
level
> > >and compare dictatorships and democracies in the same level, the
> > >dictatorships will tend to have a higher fertility rate.
> > 
> > Yes, this is why I've suggested the higher fertility rate may arise 
from 
> > attempts to escape the oppression through the joys of sex.  
> 
> 
> Right, and even if you assume access to birth control and the like,
> there may still be non-sexual "joys of child-rearing" that can accruse
> even under a dictatorship.
> 
> More formally: In a dictatorship, the returns to non-child-rearing
> activities are reduced more than the returns to child-rearing, so
> child-rearing becomes relatively more attractive, so people do more of
> it.
> 
> In other words, yes of course I'd rather raise my kids in a democracy
> than a dictatorship, just as I'd rather start a business (for example)
> in a democracy than a dictatorship.  But in a dictatorship, while my
> child-rearing opportunities suffer, my business opportunities suffer
> even more.
> 
> I can't think of any reason why this couldn't be true at every level.
> 
> Still, I agree with Marko that we can't be sure that the underlying
> facts are true until we see how they treated the now-ex-communist
> countries of Eastern Europe/USSR.  I was under the impression that
> fertility in the USSR and the Warsaw pact countries was very low, and
> I think it's still very low in Russia.  I think the Russian population
> is decreasing.
> 
> 
> --Robert Book
> 
> 
> 

-- 
NeoMail - Webmail

Re: fertility and government

[Robert A. Book]

> >  But in a dictatorship, while my
> > child-rearing opportunities suffer, my business opportunities suffer
> > even more.
> 
> But what if you live under a capitalist dicatator, like Chile's General
> Pinochet or South Korea's General Park [is this name right?]?


If my understanding is correct, in a lot of those places you have to
"know someone" to take advantage of the capitalism.  There are
probably not enough such people to change the data, in any
(reasonable) income bracket.

Even if that's not the case, "business opportunities" is just an
example.  Substitute "political opportunities" if you like.  The point
I was tryign to make is that it's possible for a dictatorship to
depress child-rearing opportunities less than other opportunities,
thus making child-rearing relatively more attractive.


> >  I was under the impression that
> > fertility in the USSR and the Warsaw pact countries was very low, and
> > I think it's still very low in Russia.
> 
> Yes.  In fact, it's even lower since Russia and other Warsaw bloc countries
> adopted democracy than when they were ruled by Communist dictators!


Perhaps -- but calling Russia's current form of government "democracy
is stretching a bit.  They're closer than they were in 1991 to be
sure, but right now I think "oligarchy" would be more accurate.



--Robert

Re: fertility and government

[Susan Hogarth]

Quoting Wei Dai <[EMAIL PROTECTED]>:

> According to a recent article [1] in Harvard International Review, because
> of differences in fertility, the population growth rate in dictatorships
> is higher than that in democracies at every income level. It says "an
> average woman has one-half of a child more under dictatorship than under
> democracy." As a result of this faster population growth, dictatorships
> have greater GDP growth even though they have lower per capita GDP growth
> compared to democracies.
> 
> This information leads me to ask a couple of questions:
> 
> 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?

What is the taxation burden in dictatorships versus democracies? I wonder if 
that shows a better correlation with fertility than government form.

-- 
Susan Hogarth
"If we cannot adjust our differences peacefully we are less than human."
 - F. Herbert

Re: fertility and government

[alypius skinner]

>  But in a dictatorship, while my
> child-rearing opportunities suffer, my business opportunities suffer
> even more.

But what if you live under a capitalist dicatator, like Chile's General
Pinochet or South Korea's General Park [is this name right?]?

>
>
>  I was under the impression that
> fertility in the USSR and the Warsaw pact countries was very low, and
> I think it's still very low in Russia.

Yes.  In fact, it's even lower since Russia and other Warsaw bloc countries
adopted democracy than when they were ruled by Communist dictators!


~Alypius

Re: fertility and government

[Robert A. Book]

> In a message dated 7/14/03 9:52:40 PM, [EMAIL PROTECTED] writes:
> 
> >A few people seem to have skipped over the first sentence of my post. 
> >
> >The article said that fertility rate is higher in dictatorships than in
> >democracies at *all income levels*. Meaning if you take any income level
> >and compare dictatorships and democracies in the same level, the
> >dictatorships will tend to have a higher fertility rate.
> 
> Yes, this is why I've suggested the higher fertility rate may arise from 
> attempts to escape the oppression through the joys of sex.  


Right, and even if you assume access to birth control and the like,
there may still be non-sexual "joys of child-rearing" that can accruse
even under a dictatorship.

More formally: In a dictatorship, the returns to non-child-rearing
activities are reduced more than the returns to child-rearing, so
child-rearing becomes relatively more attractive, so people do more of
it.

In other words, yes of course I'd rather raise my kids in a democracy
than a dictatorship, just as I'd rather start a business (for example)
in a democracy than a dictatorship.  But in a dictatorship, while my
child-rearing opportunities suffer, my business opportunities suffer
even more.

I can't think of any reason why this couldn't be true at every level.

Still, I agree with Marko that we can't be sure that the underlying
facts are true until we see how they treated the now-ex-communist
countries of Eastern Europe/USSR.  I was under the impression that
fertility in the USSR and the Warsaw pact countries was very low, and
I think it's still very low in Russia.  I think the Russian population
is decreasing.


--Robert Book

Re: fertility and government

[AdmrlLocke]

In a message dated 7/14/03 9:52:40 PM, [EMAIL PROTECTED] writes:

>A few people seem to have skipped over the first sentence of my post. 
>
>The article said that fertility rate is higher in dictatorships than in
>democracies at *all income levels*. Meaning if you take any income level
>and compare dictatorships and democracies in the same level, the
>dictatorships will tend to have a higher fertility rate.

Yes, this is why I've suggested the higher fertility rate may arise from 
attempts to escape the oppression through the joys of sex.  

Re: fertility and government

[Wei Dai]

A few people seem to have skipped over the first sentence of my post.  
The article said that fertility rate is higher in dictatorships than in
democracies at *all income levels*. Meaning if you take any income level
and compare dictatorships and democracies in the same level, the
dictatorships will tend to have a higher fertility rate.

I've placed a copy of the article at
http://www.ibiblio.org/weidai/przeworski.pdf. Unfortunately it does not
have a bibliography which makes it hard to determine how the numbers it
cites were calculated.

Re: fertility and government

[Sampo Syreeni]

On 2003-07-14, Wei Dai uttered:

>1. Why is fertility higher in dictatorships? Do dictators like bigger
>populations, and democrats like smaller populations?

Maybe they're poorer in aggregate? I mean, sustenance-level poverty is one
of the prime causal precedents of high fertility, and most dictatorships
are poor ones, because of ineffective rule of law and wide-spread
corruption.

Sure, there are a few wealthy dictatorships (Saudi Arabia comes to mind),
but that's because of independent factors (which usually do not touch the
entire population).

>Does population growth influence choice of government?

Under extreme poverty, likely not -- poverty would drive people to take
care of their own business, not politics. Under other conditions, probably
yes -- relative poverty and the greed thereoff is how we got the welfare
state. We would expect the per capita lack of income in young generations
induced by population growth to affect at least redistributive policy. For
example, I wouldn't be surprised if that was the precise description of
how politics in India works right now.

If the latter hypothesis pans out, we have to be real grateful that
industrialisation proceeded so rapidly in the West, unhindered by
full-grown democracy. Otherwise we never would have tunneled onto the
level of wealth which throttles population growth, without bumping into a
democratic political wall with the working class requiring income
transfers -- the latter slows growth, so we could well have become stuck
in between.

>2. Should economists try to maximize GDP, or per capita GDP?

Neither, I think. Maximizing GDP would not be conducive to general
welfare. Maximizing per capita GDP today would also violate individual
choice, if we also take into account individuals' time preferences. I
would take full heed of the principle of revealed preference, and just let
people choose.

>Another interesting piece of information in this article is that
>democratic regimes are more frequent in more developed countries, but
>it's not because those countries are more likely to become democracies.
>Rather it's because they are less likely to revert back to dictatorships.
>Among democracies that have collapsed, the one with the highest per
>capita income is Argentina in 1975 -- US$6055.

I would side with Robert Kaplan
(http://www.theatlantic.com/issues/97dec/democ.htm) and conjecture that
democracy can only survive in a relatively homogeneous population,
constrained by the rule of law. Secondarily I would claim that democracy
can only survive where its transaction costs and the steadily increasing
dead weight it produces can be absorbed by economic growth. Such
conditions seem to sweep most of the unsuccessful democracies from the
picture.

They might sweep us under the rug as well. The conjecture might be false,
but at least it supplies some basis for the claim that growth is
"necessary" (which it of course isn't in any purely economic framework).
-- 
Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2

Re: fertility and government

[Marko Paunovic]

I haven't read the article, so everything that follows is speculation.

I don't believe that historical evidence supports this claim. For example,
former communist countries did not have high rates of population growth. I
don't know the numbers for Fascist Countries, but I don't think that the
rates were too high.

I believe that more variation in population growth could be explained by
looking at dominant religion than by looking at the form of government. Of
course, there is some correlation between dominant religion and the form of
government, which may lead to the conclusion that form of government and
population growth are correlated.

- Original Message -
From: "Wei Dai" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Monday, July 14, 2003 17:49 PM
Subject: fertility and government


> According to a recent article [1] in Harvard International Review, because
> of differences in fertility, the population growth rate in dictatorships
> is higher than that in democracies at every income level. It says "an
> average woman has one-half of a child more under dictatorship than under
> democracy." As a result of this faster population growth, dictatorships
> have greater GDP growth even though they have lower per capita GDP growth
> compared to democracies.
>
> This information leads me to ask a couple of questions:
>
> 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?
>
> 2. Should economists try to maximize GDP, or per capita GDP? If the former
> should they be supporting dictatorships?
>
> Another interesting piece of information in this article is that
> democratic regimes are more frequent in more developed countries, but it's
> not because those countries are more likely to become democracies. Rather
> it's because they are less likely to revert back to dictatorships. Among
> democracies that have collapsed, the one with the highest per capita
> income is Argentina in 1975 -- US$6055.
>
> [1] A Flawed Blueprint. By: Przeworksi, Adam. Harvard International
> Review, Spring2003, Vol. 25 Issue 1, p42.

Re: fertility and government

[AdmrlLocke]

In a message dated 7/14/03 6:45:42 PM, [EMAIL PROTECTED] writes:

>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?

It may be that oppressed people turn to sex (and alcohol, etc.) more as a way 
of easing the pain of oppression.

Re: fertility and government

[fabio guillermo rojas]

> 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: "Family" Businesses and Licensing

[AdmrlLocke]

In a message dated 7/14/03 9:16:31 AM, [EMAIL PROTECTED] writes:

>> There are zero licensing requirements for farming.
>> Eric
>
>Are there no federal permits and grandfathering in agriculture?
>
>Fred Foldvary

The federal government imposes a host of rules and regulations on farming, 
everything from "wetlands" regulations to grandfathered agricultural payment in 
kind programs.

Re: "Family" Businesses and Licensing

[Eric Crampton]

On Mon, 14 Jul 2003, Fred Foldvary wrote:

> Are there no federal permits and grandfathering in agriculture?

The only thing that comes close is that intrafamily land transfers are
taxed differently than interfamily land transfers.  Then again, I know
more about the Canadian farm system than the US.

> 
> Fred Foldvary
> 
> =
> [EMAIL PROTECTED]
> 
> 

Re: "Family" Businesses and Licensing

[Fred Foldvary]

> There are zero licensing requirements for farming.
> Eric

Are there no federal permits and grandfathering in agriculture?

Fred Foldvary

=
[EMAIL PROTECTED]

Re: "Family" Businesses and Licensing

[AdmrlLocke]

In a message dated 7/14/03 1:40:05 AM, [EMAIL PROTECTED] writes:

>As a sidelight, I've noticed several "father/daughter" teams amoung
>lawyers, and the hardware retailer "88 Lumber" is run by a
>father/daughter team (and it's not because the father doesn't have
>sons; he does).

And speaking of famous father/daughter teams there are the Hefners.  :)

DBL

Re: Competition vs. Profits in the NBA

[Dan Lewis]

Market size doesn't matter much in the NFL.  There are only 8 home games 
per team and the TV contract is negotiated league-wide.   It's almost 
salary cap independent.

At 12:40 AM 7/14/2003 -0400, you wrote:
> equally.  This, of course, gives a boost to smaller market teams.  The
> last six Super Bowl winners have been Tampa, New England, Baltimore, St.
> Louis, Denver (twice) and Green Bay.  All relatively large markets.
Green Bay, Wisconsin is a large market?

Re: "Family" Businesses and Licensing

[Robert A. Book]

> In my informal experience, fathers and sons tend to work together
> full-time only in professions with strict licensing or training
> requirements.  Electricians, lawyers, realtors and even CPAs - I've
> found more father/son teams here than in any other type of job.  All
> of those jobs have fairly rigid prerequisites (electricians have to
> pass journeyman and master-level tests; lawyers have the bar and law
> school, etc).  Why is that?


I'm not sure this is actually true.  Eric Crampton mentioned farming
as a non-licensed procession with lots of father-son teams, and I'd
add retailing -- more so in the time before chain stores, but to some
extent even now.  Don't you remember all the stores with names like
"George Johnson & Sons"?


> Also - why is it more often "father/son," and not "mother/daughter" or "mother/son"? 
>  Or "father/daughter"?


You'd have to adjust the frequency of these teams to the percentage
of women in each profession and see if the percentage of such teams
involving women is more or less than what you'd expect based on the
percentage of women in the profession.

As a sidelight, I've noticed several "father/daughter" teams amoung
lawyers, and the hardware retailer "88 Lumber" is run by a
father/daughter team (and it's not because the father doesn't have
sons; he does).


--Robert

Re: Competition vs. Profits in the NBA

[Robert A. Book]

> equally.  This, of course, gives a boost to smaller market teams.  The
> last six Super Bowl winners have been Tampa, New England, Baltimore, St.
> Louis, Denver (twice) and Green Bay.  All relatively large markets.


Green Bay, Wisconsin is a large market?

Re: Competition vs. Profits in the NBA

[Dan Lewis]

The business model I floated a year or so ago (sadly on April Fool's
Day) gives visiting teams a % of local revenue, based on attendance.
(See http://www.nationalreview.com/comment/comment-lewis040102.asp)
That'd probably create a happy-medium between the two forces.
But more to your point, I'm starting to believe that the idea of a "big
market team" in sports is something of a fiction. Instead, "big
market" is synonymous with "historically and currently good team who
doesn't go into debt." The last part creates some honestly _small_
market teams -- see anything team a dairy state -- but note how few
true big-market teams there are, and what sets them apart:
1) The Lakers are clearly a big market team. The Clippers, who share a
home-court with them, aren't.
2) The Philadelphia Eagles (NFL) were a regularly competitive team
before the salary cap. The 76ers (NBA) and Phillies (MLB) were both
considered failing, small market teams until recently.
3) The Nets play in the same complex as the Giants and Jets (NFL).
4) The Portland Trailblazers are considered a regular contender in the
NBA. Portland is so small it has no football or baseball team,
although it may have the latter in the future.
5) The Dolphins are a football institution. The Heat have been mostly
competitive throughout their history. The Florida Marlins are the
prototypical "poor" team.
6) No one would have a problem with a White Sox/Cubs world series, even
though they're both clearly "large market" teams.
7) Detroit made the NBA finals three years in a row, pre-cap and pre-
Jordan era (1988-1990), winning two. The Lions (NFL) and Tigers (MLB)
are perhaps two of the worst teams in recent sports history. (The
Pistons of the NBA, on the other hand, have been doing well over the
last few years).
The idea that large markets exist seem more to be a function of the
team than the city itself. So, if you have a dynasty, it'll draw
eyeballs, _even if it's in the bumbles._
The best example is the Detroit run in the NBA. In their third year,
they played Portland, with, if I recall correctly, better ratings than
they had the two years before (versus the Lakers).
But more importantly, remember that these finals were projected (after
game 2) to have the worst ratings since 1982. (As it turned out, they
had the worst ratings since they've been recorded.) Who played in
the '82 Finals? The Lakers beat the Sixers, 4-2. Note that the two
teams had faced each other in 1980 with the same result (although LA
had a different coach) and would face each other _again_ in 1983.
In '83, the Sixers won 4-0, and the ratings were better.
The best explanation is that fan base has a significant lag time to it,
especially as you get to smaller markets. Combine that with the fact
that the one team that had been to the finals the year before (NJ) was
a huge underdog and didn't put up much of a fight, and this series was
doomed to lose to Joe Millionaire.
So, the problem isn't that we want to give small market teams a
chance. The problem is that leagues dislike dynasties, but dynasties
are good for them.
Dan Lewis

At 01:31 PM 7/10/2003 -0500, you wrote:

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: "Family" Businesses and Licensing

[John Morrow]

Another interesting question might be how does the distribution of income 
of children of people in these professions vary conditional on whether they 
go into their parents line of work controlling for socioeconomic status, 
etc.  I would gamble there are a disproportionate number of people centered 
around their parents profession's wage, with most coming from the lower end 
of the income spectrum -- in other words I am speculating that most of the 
additional wage from these professions comes from rote training and 
experience rather than other factors, although it seems also that the 
professions you mention all seem to also be of the "very small business" 
type, so the parents business might be an endowment much of which is only 
capturable if a child operates it, and as I believe small business 
operators are largely male (for whatever reasons, cultural or otherwise), 
that might explain some of the gender business, no pun intended.

At 08:56 PM 7/10/2003 -0700, you wrote:

In my informal experience, fathers and sons tend to work together 
full-time only in professions with strict licensing or training 
requirements.  Electricians, lawyers, realtors and even CPAs - I've found 
more father/son teams here than in any other type of job.  All of those 
jobs have fairly rigid prerequisites (electricians have to pass journeyman 
and master-level tests; lawyers have the bar and law school, etc).  Why is 
that?

Also - why is it more often "father/son," and not "mother/daughter" or 
"mother/son"?  Or "father/daughter"?

-JP

Do you Yahoo!?
The New 
Yahoo! Search - Faster. Easier. Bingo.

Re: "Family" Businesses and Licensing

[Sampo Syreeni]

On 2003-07-10, John Perich uttered to [EMAIL PROTECTED]:

>In my informal experience, fathers and sons tend to work together
>full-time only in professions with strict licensing or training
>requirements.

That's an interesting one. My first stab is that we might go about it the
other way. Why do such professions need strict licencing? One explanation
would be that these professions are crafts where the best way to learn the
job is to do it. In such professions we wouldn't expect there to be strict
outcome based criteria on what one needs to know, but we do know that a
certain learning process is more successful than others. So, if we want to
assure safety and efficiency, we can't just test for an applicant's skills
-- there'd be a problem with information. Thus the market orients itself
along the learning process, the uncertainty about the outcomes makes the
professions more amenable to legislative intervention, and the eventual
legislation then follows the process oriented reasoning.

>Also - why is it more often "father/son," and not "mother/daughter" or
>"mother/son"?  Or "father/daughter"?

Perhaps self-selection in occupations, so that parent/child combinations
with different sexes do not benefit from intergenerational knowledge
transfer? That leaves the mother/daughter pairing. Perhaps that's because
of self-selection into lines of work which are less "crafty"?
-- 
Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2

Re: "Family" Businesses and Licensing

[zgocheno]

> In my informal experience, fathers and sons tend to work together 
> full-time only in professions with strict licensing or training 
> requirements.  Electricians, lawyers, realtors and even CPAs - 
> I've found more father/son teams here than in any other type of 
> job.  All of those jobs have fairly rigid prerequisites 
> (electricians have to pass journeyman and master-level tests; 
> lawyers have the bar and law school, etc).  Why is that?

As Eric pointed out, farming is also a profession where fathers and sons usually work 
together: in addition to what was named:  Carpenting, construction, medicine, 
mechanics, etc.  This is a social phenomenom much older than government licensing; it 
spans eras and cultures.  I'd say rather than licensing requirements, fathers and sons 
often work together in vocations with specialized training requirements.  Sons often 
learn this trade from their fathers and grow up in an environment where respect for 
this trade is fostered and encouraged.

Often in these professions, people must work together in teams and use very 
specialized knowledge to be successful.  A family bond is a good way to reduce search 
costs for good employees.  Vocational training is combined with father-son bonding for 
further reduction in the cost of training.  In "other types of jobs" that require less 
specialized training, the benefits of working with/for your father are typically much 
smaller.

> Also - why is it more often "father/son," and not 
> "mother/daughter" or "mother/son"?  Or "father/daughter"?

In general, women do not go in to these types of professions.  Sons tend not to follow 
in the footsteps of their mothers for obvious reasons.  Mother-daughter professional 
relationships are less common because there are far fewer female professionals in 
these fields - but consider mother/daughter relationships in housewifery, modeling, 
beauty pageantry, etc.

- Zac Gochenour
[EMAIL PROTECTED]

Re: "Family" Businesses and Licensing

[Eric Crampton]

On Thu, 10 Jul 2003, John Perich wrote:

> 
> In my informal experience, fathers and sons tend to work together
> full-time only in professions with strict licensing or training
> requirements.  Electricians, lawyers, realtors and even CPAs - I've

There are zero licensing requirements for farming.  I'd lay even money
that farming would be in the top 5 professions on a "proportion of
father-son teams" scale.

Eric

RE: Competition vs. Profits in the NBA

[fabio guillermo rojas]

> 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

[Mike Cardwell]

In truth, the major pro sports (at least in the US and Canada)have very
different buisness models that to different degrees skew the system to
big and small market teams.  

First and formost, every league has different revenue sharing agreements
between its membership.  To my recollection, the NFL teams put a
relatively large amount of revenue into a common pot and then divide it
equally.  This, of course, gives a boost to smaller market teams.  The
last six Super Bowl winners have been Tampa, New England, Baltimore, St.
Louis, Denver (twice) and Green Bay.  All relatively large markets.
Couple this with rigid standards on player salaries (in the form of a
collective bargaining agreement with the players union that defines a
maximum amount each team can spend on players), and small market and big
market teams are on a relatively even playing field.

At the other end of the spectrum, Major League Baseball teams share
relatively little revenue and have (until last year... And the rules are
still pretty loose) no real curbs on how much a team can spend on
players).  Teams from Southern California or New York have appeared in
and won 5 of the last six World Series.

Why do relatively similar endeavors have such different business models?




-Original Message-
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf
Of fabio guillermo rojas
Sent: Thursday, July 10, 2003 2:32 PM
To: [EMAIL PROTECTED]
Subject: 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: Competition vs. Profits in the NBA

[fabio guillermo rojas]

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 

Re: Competition vs. Profits in the NBA

[Robin Hanson]

At 01:31 PM 7/10/2003 -0500, Fabio wrote:
... 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?
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.
Does a similar phenomena occur in other areas of life?  Do university alumni
want an appearance of fair evaluation of applicants, but really want their
kids to have an advantage?  Do businesses want an appearance that local media
are fair and impartial, but really want to be able to buy them off to prefer
their side of the story?  Are there other examples?
Can we model this behavior as resulting from rational agents, or is some
irrationality required to make such a story work?
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: Russia Needs More Inequality

[zgocheno]

One thing about the Russian brain drain that surprised me is the level of "internal 
brain drain" where scientists remain in Russia but give up their vocation to pursue 
other careers.  More productive careers, I'd say.  Consider: Russia had too many 
scientists.  Emigration restrictions and low opportunity cost for becoming educated 
created one of the most impressive cadres of scientists in the world.  A lot of good 
it did the USSR, right?

Many foreign and domestic companies employ fleets of scientists and technology experts 
in Russia, and most are Russians.  The biggest brain drain problems are in wonderful 
academia, where soviet dinosaurs lecture on obscure topics to young Russians still 
getting a highly subsidized education.  What happens to a good portion of academia 
when there is no government funding?  Its worthless.  Take away a good portion of the 
subsidies from any country's academic sector and look at the number of academic jobs.  
Multiply this by a few magnitudes and you have what has happened in Russia.

Many of the scientists that remain in Russia are working for productive local 
corporations and multinationals, or under funding from foreign organizations.  My 
point is, why would we want to stop this "brain drain," especially the internal 
variety?  That said, certainly the large subsidies for science education should be 
eliminated.  

The worst thing they can do: "In 2000, funding for science increased by almost 39 
percent, and Russia now spends some $1.3 billion on science annually. The numbers are 
expected to increase even further in the 2003 budget." One good thing: they rent some 
of their huge lab space out as office space to corporations in order to fund their 
research.  Also, for DC-metro area readers, some Moscow scientists now use their 
otherwise useless military equipment and laser technology expertise to make very 
beautiful pieces of art, reasonably priced at the "Russian Laser Art" store upstairs 
at Tysons Corner.

Bryan Caplan wrote:

> But the main thing you hear about post-Communist Russia is the awful explosion of 
> inequality, blah, blah, blah.

Certainly, a good portion of the brain drain is due to the inability for scientists 
doing productive work to make their market wage.  I'd say the bigger problem in this 
case is highly subsidized education, though.

> The slogan shouldn't be "equality" but "riches for the most productive" or perhaps 
> "better inequality."

I looked at this from an advertising or public relations perspective, and decided that 
they would only work in an Ayn Rand novel.

-- Zac Gochenour
[EMAIL PROTECTED]

"Make no laws whatever concerning speech, and speech will be free; so soon as you make 
a declaration on paper that speech shall be free, you will have a hundred lawyers 
proving that 'freedom does not mean abuse, nor liberty license'; and they will define 
and define freedom out of existence."
-- Voltarine de Cleyre

Re: Russia Needs More Inequality

[Sampo Syreeni]

On 2003-07-07, Bryan Caplan uttered to [EMAIL PROTECTED] and Tyler Cowen:

>But I can't remember hearing anyone drawing the obvious lesson: Russia
>needs more inequality to persuade the brains to stay.

It doesn't. Just as you say, it needs "better inequality", which in this
case most likely means "less inequality". The point is, the distribution
shouldn't be forced. It should be let to evolve. Until now, it hasn't
been, because of all the rent-seeking and corruption you mentioned.

Thus, equality vs. inequality isn't the right basis in which to analyse
Russia's situation. The right basis, as always, is rule of law vs. no rule
of law, or efficient law vs. inefficient law.

>As Alex Tabarrok pointed out to me, even Rawlsians should embrace this
>conclusion.

This sounds interesting and I might not have been present at the time.
Could you perhaps provide me with a cite?
-- 
Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2

Re: IQ, birthrates, and economic performance

[jrhorsman]

this is a very old article. For a slightly different slant on this issue
try,
richard lynn "IQ and the Wealth of Nations"
he looks at national iq scores gathered from a variety of sources and
correlates the scores with national wealth.

- Original Message -
From: "alypius skinner" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Wednesday, July 02, 2003 3:34 AM
Subject: IQ, birthrates, and economic performance


> "...in not too many generations differential fertility could swamp the
> effects of anything else we may do about our economic standing in the
> world."
>
>
>  http://www.slavin.uk.net/texts/birth.html
>
>
>
> IQ and falling birthrates
> R.J. Herrnstein
> The Atlantic, May 1989 v263 n5 p72(7)
>
> Bright, well-educated American women of all races are having fewer
children,
> a phenomenon the author believes may affect national productivity and the
> gene pool
>
>
> --
--
> 
>
> A GREAT MANY PEOPLE ARE ANXIOUS ABOUT HAVING children. I hear about this
> concern frequently from young men and women passing through Harvard-more
> than ever before in my three and a half decades here. And I hear about it
in
> conversations with my peers, frustrated by the slow accumulation of
> grandchildren. This concern is at least mildly ironic, coming, as it does,
> two decades after alarms about a "population explosion."
>
> Though populations in South America and Africa and the Indian subcontinent
> continue to grow at an alarming rate, the U.S. media direct their
attention
> increasingly to labor shortages in industrial societies and to shrinking
> school populations in affluent American suburbs. Thinking people have
heard,
> and are talking, about the "birth dearth," as Ben Wattenberg named it in
the
> title of a recent book. Day-care and parental benefits, which will
> presumably increase the birth rate, earn approving mention in the
platforms
> of both political parties and in glossy annual reports of large companies.
>
> The concern about fertility also bubbles to the surface in artistic
> renderings of contemporary and future life-in light movies like Baby Boom
> and Three Men and a Baby, for example, about young women or men trying to
> reconcile careers and parenthood, and in serious novels, like Margaret
> Atwood's Handmaid's Tale, with its fantasy of a not-too-distant future in
> which the dwindling number of fertile women are made slaves to
procreation.
>
> Low fertility, of course, is hardly a new worry. Some of its history,
> especially that in Europe since the middle of the nineteenth century, is
> well and compactly told by Michael Teitelbaum and Jay Winter in their book
> The Fear of Population Decline. Some French writers attributed the defeat
of
> their nation in the Franco-Prussian War, in 1871, to the slow French rate
of
> reproduction, as compared with that of fecund Germany. Fertility became a
> central issue in early-twentieth-century French politics. Besides being
> blamed for France's inability to field an army large enough to defeat the
> Germans and also have a functioning economy at home, low fertility was
seen
> by various contemporary French commentators as the cause or the effect of
> "national degeneracy," a disease of the French spirit.
>
> Fiction echoed reality, as it does everywhere. In Emile Zola's novel
> Fecondite, written at the turn of the century, happiness and personal
> triumph came to a working-class couple with fifteen children and scores of
> grandchildren, rather than to various unappealing bourgeois, with their
> selfishly hedonistic but ultimately miserable lives, their Malthusian
> rhetoric bemoaning fecundity, and, above all, their small families. Zola
was
> one of the founding members of the National Alliance for the Growth of the
> French Population.
>
> In Great Britain, too, arguments about reproduction were part of the
> political landscape before and after the turn of the century. As in
France,
> a disastrous and costly war heightened public alarm. But the British had
> been outfought in southern Africa, rather than outnumbered, by the Boers,
> even though the British eventually won the war. Considerations of the
losses
> of the Boer War emphasized not so much the question of how many British
> soldiers but of how good they were. If the French worry about fertility
was
> characterized as mainly quantitative, the British worry was mainly
> qualitative.
>
> The worries went beyond the quantity and quality of armies. Teitelbaum and
> Winter describe a British preoccupation with the general "physical
deteriora
> tion" of the population; with what was called the residuum, meaning urban
> unskilled workers; and with the "proliferation of the unfit" versus the
> underreproduction of the fit. Prime Minister Arthur Balfour worried
publicly
> in 1905 that the very members of the working class who showed the
enterprise
> and ability to improve their lot were the ones who limited their 

Re: calculating the irrational in economics

[Fred Foldvary]

> Calculating the Irrational in Economics
> By STEPHEN J. DUBNER
> 
> the average investor is hardly the superrational "homo
> economicus" that mainstream economists depict.

Who depicts it?  What's the difference between "superrational" and
"rational".  

> behaviorists are essentially calling for an end to economics as we know
> it.

A good reason to be wary.
Most revolutions are just spin.

> The point is that too many options
> can flummox a consumer. 

So what?

> Standard economics would argue that people are
> better off with more options.

Where does standard economics argue this?
This sounds like straw.

> But behavioral economics argues that people
> behave less like mathematical models than like - well, people.

No doubt many mathematical models are unrealistic.
But their purpose is not to be realistic.
 
> Among the behaviorists, there is the common sentiment that
> economics has been ruined by math.

Others say this also.

> Richard H. Thaler. His paper, written with the legal scholar Cass R.
> Sunstein, was called "Libertarian Paternalism Is Not an Oxymoron." 
>  Mr. Thaler has concluded that too many people, no matter how
> educated or vigilant, are poor planners, inconsistent savers and
> haphazard investors. 
> His solution: public and private institutions should gently
> steer individuals toward more enlightened choices. That is, they must be
> saved from themselves. 

> Mr. Thaler's most concrete idea is Save More Tomorrow (SMarT), a
> savings plan whereby employees pledge a share of their future salary
> increases to a retirement account. 

That's a good idea, but it does not overturn economics.

> an automatic asset
> reallocation to keep an employee from holding more than 20 percent of his
> portfolio in company stock.

Better yet, use modern portfolio theory and invest only in index funds.
 
Fred Foldvary


=
[EMAIL PROTECTED]

Re: some people are optimizers

[marko]

Quoting Fred Foldvary <[EMAIL PROTECTED]>:

> --- Marko Paunovic <[EMAIL PROTECTED]> wrote:
> > I can't really see a situation where decision not to have children is
> > good for your genes.
> 
> What matters for evolution is the propagation of the species, not
> individuals.  So if most individuals have children, but some choose to
> enhance the welfare of others by avoiding having children, that overall can
> help the species flourish and reproduce.
> 

Yes, it could help the species. However, my genes don't care about the well- 
being of the species. They care about themselves. What is good for the species 
is not necesarily good for my genes. I guess one could even argue that by 
helping the other members of the species you are hurting yourself because you 
are increasing competition for limited resources. The only exemption, as I 
already mentioned, is caring for relatives.

The situation is analogous to the public good problem. If I did something good, 
it would help everyone, but probably harm me. That is why I will not do it at 
all. Again, the only exemption are the people I care about, which are usually 
memebers of my family and for whom I am willing to sacrifice.

Re: some people are optimizers

[Fred Foldvary]

--- Marko Paunovic <[EMAIL PROTECTED]> wrote:
> I can't really see a situation where decision not to have children is
> good for your genes.

What matters for evolution is the propagation of the species, not
individuals.  So if most individuals have children, but some choose to
enhance the welfare of others by avoiding having children, that overall can
help the species flourish and reproduce.

Fred Foldvary

=
[EMAIL PROTECTED]

Re: some people are optimizers

[Sampo Syreeni]

On 2003-07-01, Marko Paunovic uttered to [EMAIL PROTECTED]:

>However, I don't think that there is any evidence, except in social
>insects, for this kind of specialization that you are suggesting.

The existence of two sexes appears an obvious counter-example. There are
also some reasons to expect that the principle might work at a
finer-grained level. I don't have a reference at hand, but I've once read
a highly interesting sociobiology account of why homosexuality might be
one such specialisation (that's where the childcare idea came from). I've
also heard some speculation about the possibility of "warrior genes" (i.e.
genes which cause aggression bordering on self-sacrifice). The same goes
for novelty seeking ("troubled youth"), which I understand has been
extensively studied. From the economic standpoint the ratio between
novelty seekers and steady people determines the community's collective
risk profile.

So I wouldn't dismiss the possibility of genetic occupations (a wonderful
term, BTW) just yet. Otherwise we're in vigorous agreement.
-- 
Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2

Re: some people are optimizers

[Marko Paunovic]

"Sampo Syreeni" <[EMAIL PROTECTED]> wrote:


> On 2003-07-01, Marko Paunovic uttered to [EMAIL PROTECTED]:
>
> >Because gene for "not wanting children" will not be around for too long,
> >but only for one generation.
>
> Not true. For instance, such a gene could have positive effects on the
> other people in your tribe (say, added time for common childcare, which is
> quite common in orang-outang communities), so the gene might well be
> self-propagating in the social evolutionary sense. I mean, you only need
> trivial economic analysis to show that specialisation is useful, and so
> having a percentage of individuals who do not breed but do some other
> useful work for the community could prove very advantageous.

True. Could prove advantageous...

>
> Why on earth should we presume evolution couldn't take advantage of basic
> economics, when it has lead to far more nontrivial consequences? Genes do
> not care about individuals. They only care about their own survival. Why
> should we presume individuals have some special place in the theory of
> evolution?

I agree completely. However, I don't think that there is any evidence,
except in social insects, for this kind of specialization that you are
suggesting. It is theoretically possible, but I've never heard of
"genetically transfered occupation" (if I can call it that way) in any other
animal species but social insects. I think that evidence would support my
view that male and female of almost all species want to procreate because
their genes want that. Why we are not witnessing more specialization, I
don't know. What we do see, is that many males don't breed (I think that
many male sea-lions don't breed), but I don't think they do any useful work
for the community.

> >It might be good for your genes to "invest" all your time and money in
> >one child or two children.
>
> But historically they haven't, just as they don't in less developed
> countries today. Thanks to our knowledge of biology we also see that the
> genes in those surroundings are pretty much the same as ours. So where's
> the difference?
>
> The real difference is that there are other forces at work here besides
> Darwinian evolution. Cultural evolution is the prime one -- it has long
> since overtaken its biological counterpart, just about everywhere. To put
> it bluntly, if you can at least farm, you're no longer guided solely by
> biological dictates. Instead it's information which guides your life.
> Economics still applies, but it isn't as trivial as in the simple case of
> evolutionary biology.

This is of course true. Culture has added some costs (you have higher
opportunity cost of your time) and some benefits (if you have many children,
you don't have to save for retirement because children will look after you)
so the optimal number of children is different. Also, for example, because
of legal "issues", hit-and-run strategy is much less profitable for men. My
point was that there IS some optimal number of children and that simple
maximization of that number is not in the self-interest of genes.

> >> Human genes endow people with the intelligence to choose not to have
> >> children when the cost and risk are high.
>
> Precisely.
>
> >I can't really see a situation where decision not to have children is
> >good for your genes.
>
> Okay. Say you have faulty genes which do not affect your basic
> reproductive ability? Like when you're stupid but oh-so-horny? That isn't
> a trait that would directly interconnect with your ability to breed (your
> groin ain't your brain), so a naive analysis would suggest stupidity is
> irrelevant. But we all know painfully well it ain't.

I don't agree. I think that my stupidity is irrelevant from the standpoint
of my genes. If I am stupid it is still better for my genes if I have
children. It is not good for the genes of my girlfriend, so hopefully women
will (or already have) develop a way to test my intelligence or overall
ability. I guess what I'm trying to say is that there is both natural
selection where genes are important (like height or pretty face) and
cultural selection where genes are irrelevent (like wealth). However, they
are strongly connected. Although there is probably no gene for wanting a
rich wife, there is a gene for loving your child. So, if you have well-being
of your future child in mind, you will consider not only genetic features of
his/her mother but also her cultural features.

But, this also works if I AM stupid. It is still better for my genes if I
marry a pretty, rich girl.  Hopefully, she will also be smart and reject my
proposal.

> The example goes to show that the link between your genotype and your
> ability to breed isn't a direct one. Nowadays I wouldn't actually expect
> any precise, scientific model to be able to capture the precise dynamics
> of mating and procreation. In the stone age, maybe, but not today -- since
> then we did invent nylon, lubrication, lipstick, fermented beverages and
> industrial stren

Re: Do Not Call -- The newest public interest miracle?

[John Morrow]

This is precisely a thought that occurred to me as a way to prevent spam -- 
computers can reduce the marginal transaction cost, and liens could be put 
up against bandwidth providers to take care of any lag in the 
system.  Would be spammers would sign contracts with their ISPs, and ISPs 
with the agencies who kept track of costs for individuals and authenticated 
email coming from contracted ISPs.  A major problem is getting a critical 
mass of people to use it, so that people are not missing email from users 
of "hold out" ISPs.

At 07:41 PM 7/1/2003 -0400, you wrote:
On Mon, Jun 30, 2003 at 12:26:41AM -0500, [EMAIL PROTECTED] wrote:
> [...] could it be done more efficiently?  Probably, but I can't think of
> it.
I can... The Do Not Call form should take a bank account number and dollar
amount. Any advertiser who pre-pays the amount I specify would be
allowed to call me.

Re: Do Not Call -- The newest public interest miracle?

[Wei Dai]

On Mon, Jun 30, 2003 at 12:26:41AM -0500, [EMAIL PROTECTED] wrote:
> [...] could it be done more efficiently?  Probably, but I can't think of 
> it.

I can... The Do Not Call form should take a bank account number and dollar
amount. Any advertiser who pre-pays the amount I specify would be
allowed to call me.

Re: some people are optimizers

[Sampo Syreeni]

On 2003-07-01, Marko Paunovic uttered to [EMAIL PROTECTED]:

>Because gene for "not wanting children" will not be around for too long,
>but only for one generation.

Not true. For instance, such a gene could have positive effects on the
other people in your tribe (say, added time for common childcare, which is
quite common in orang-outang communities), so the gene might well be
self-propagating in the social evolutionary sense. I mean, you only need
trivial economic analysis to show that specialisation is useful, and so
having a percentage of individuals who do not breed but do some other
useful work for the community could prove very advantageous.

Why on earth should we presume evolution couldn't take advantage of basic
economics, when it has lead to far more nontrivial consequences? Genes do
not care about individuals. They only care about their own survival. Why
should we presume individuals have some special place in the theory of
evolution?

>It might be good for your genes to "invest" all your time and money in
>one child or two children.

But historically they haven't, just as they don't in less developed
countries today. Thanks to our knowledge of biology we also see that the
genes in those surroundings are pretty much the same as ours. So where's
the difference?

The real difference is that there are other forces at work here besides
Darwinian evolution. Cultural evolution is the prime one -- it has long
since overtaken its biological counterpart, just about everywhere. To put
it bluntly, if you can at least farm, you're no longer guided solely by
biological dictates. Instead it's information which guides your life.
Economics still applies, but it isn't as trivial as in the simple case of
evolutionary biology.

>> Human genes endow people with the intelligence to choose not to have
>> children when the cost and risk are high.

Precisely.

>I can't really see a situation where decision not to have children is
>good for your genes.

Okay. Say you have faulty genes which do not affect your basic
reproductive ability? Like when you're stupid but oh-so-horny? That isn't
a trait that would directly interconnect with your ability to breed (your
groin ain't your brain), so a naive analysis would suggest stupidity is
irrelevant. But we all know painfully well it ain't.

The example goes to show that the link between your genotype and your
ability to breed isn't a direct one. Nowadays I wouldn't actually expect
any precise, scientific model to be able to capture the precise dynamics
of mating and procreation. In the stone age, maybe, but not today -- since
then we did invent nylon, lubrication, lipstick, fermented beverages and
industrial strength black clothing. It's the same with not having kids.
Biological principles alone fail to explain that.

I'm also pretty sure this disconnect is what makes us talk about evolution
on lists having to do with economics.
-- 
Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2

Re: some people are optimizers

[Marko Paunovic]

"Fred Foldvary" <[EMAIL PROTECTED]> wrote:

> Why is deciding not to have children against the interest of the genes?

Because gene for "not wanting children" will not be around for too long, but
only for one generation.

> Note also that modern parents stop at one or two
> children, rather than many, and is that too against the interest of the
> genes?

This is different situation. It might be good for your genes to "invest" all
your time and money in one child or two children. Why? Well, instead of
having 10 uneducated and poor children, you might want to have two highly
educated and skilled children. In human society, where education and money
matter in "sexual success" it makes sense.

>Human genes endow people with the intelligence to choose not to
> have children when the cost and risk are high.

I can't really see a situation where decision not to have children is good
for your genes. Maybe when you have a lot of brothers and sisters and no
parents, so you invest your time and effort in them Or if it seriously
threatens your own life if you decide to have children, like during wars and
such. But even then, it is only "good" for your genes to postpone your
decision until such "bad times" pass.

Re: some people are optimizers

[Fred Foldvary]

--- Wei Dai <[EMAIL PROTECTED]> wrote:
> and also often act directly against 
> the interest of their genes (e.g., deciding not to have children) when 
> they apply more rational decision processes.

Why is deciding not to have children against the interest of the genes?

Genes also induce people to want happiness, and children are very costly,
at least in modern society.  So the net benefit of children may well be
less than alternatives.  Note also that modern parents stop at one or two
children, rather than many, and is that too against the interest of the
genes?  Human genes endow people with the intelligence to choose not to
have children when the cost and risk are high.

Fred Foldvary

=
[EMAIL PROTECTED]

RE: Marketing vs. Economics

[chris macrae]

I started as a market researcher 25 years ago; I have worked in 30
countries; I can testify that global marketing organisations have given
up all clues as to what local people want. In different ways that's the
message of http://www.wwdemocracy.nildram.co.uk/index.htm and
www.cluetrain.com and www.nologo.org 

I am pretty sure that economics has also given up asking the basic
questions : what organisations do people really want around them, which
are they sensible to trust? , what systematically multiplies both our
capabilities (learning, doing, inventing) as producers and as fussy
customers? For example, this sort of question wasn't even on the radar
of Bill Emmott's talk earlier this month on saving capitalism from
itself.

So in my view both subjects have veered alarmingly away from human
common sense; whether that means they could rediscover this by uniting
in a reappraisal of where they lost touch with trust and living systems
and how knowledge networks are changing world markets is a moot question


Chris Macrae, Bethesda, www.valuetrue.com 
Sample chapter available on request from me at [EMAIL PROTECTED]  on
our forthcoming book published by John Wiley on how to value
transparency and trust-flow across organisational systems

-Original Message-
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf
Of Robin Hanson
Sent: 30 June 2003 14:27
To: [EMAIL PROTECTED]
Subject: Re: Marketing vs. Economics

On 6/25/2003, Fabio wrote:
>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 ... it seems more simple to postulate that
>people have a set of rules that they apply to some classes of economic
>behavior. ...
>- 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.

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.

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?



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: some people are optimizers

[Wei Dai]

On Mon, Jun 30, 2003 at 08:32:55PM -0400, Robin Hanson wrote:
> This seems to me to confuse the decision with how the decision is
> represented and implemented.  There are presumably many ways to disperse
> a decision process and make it robust to random errors, and some of those
> ways may be compatible with pretty optimal behavior.

Maybe there are ways to implement a decision process that is both robust
and also produces optimal behavior, but it seems that evolution has not
found them. I think at the margin that is available to evolution, there is
a pretty sharp tradeoff between robustness and optimality.

As evidence, I submit the fact that people often behave irrationally even
in very high stakes situations (i.e., high stakes as far as their genes 
are concerned, for example choosing a mate or deciding how much parental 
investment to allocate to each child), and also often act directly against 
the interest of their genes (e.g., deciding not to have children) when 
they apply more rational decision processes.

Re: Libertarian Paternalist!

[John Morrow]

So for this "libertarian paternalist" viewpoint, is the goal of these plans 
to force people to do certain things, or make certain behaviors "default" 
in the sense that they are the status quo unless people voluntarily decide 
to do otherwise?  Otherwise, I don't see how forced saving differs except 
in degree from the operations of the Fed or various tax provisions, or in 
fact wealth transfers that are otherwise market based, and I think many 
"libertarians" would object -- clarification?.  Also, does anyone know of 
any research along the lines of changing the "default" behavior in an 
institution (not meaning psychological bias literature or survey data, but 
rather tweaking a scenario but not changing the info set or options 
available to actors and seeing different results -- I seem to remember a 
paper critiquing regret theory, but that is it).  In other words, is there 
any empirical evidence in an actual institution with incentives that shows 
how behavior is altered by changing the "default" option affects behavior?

At 10:17 PM 6/30/2003 +, you wrote:

 Who would manage these accounts? The person himself? If he is not 
competent enough not to save what makes you think they can invest?
Now the question is how much money do you give to the basic  poverty
fund? If you make it to low then people will not get enough basic benefits 
. If you make it to high then you risk the problem of losing work incentive.



"Great news for me ... I'm a Libertarian Paternalist!
I've long "what" I am, but just not the name.
I ESPECIALLY like the need of humans to direct money flow into
different accounts.  I support many gov't individual accounts:
a forced savings retirement account (SMART or whatever)--the second
pillar in 3-pillar pension reform schemes like Slovakia (first pillar
is poverty income to all, almost irrespective of contribution; third
pillar is optional tax-advantaged savings, like IRAs).
Health care & catastrophic insurance would be good, too.

I'd like an individual unemployment account; required to donate
until it reaches enough to pay you half your last year's salary (or
poverty income for year plus half the difference).
I'd like automatically elligible educational tax-loans, where you pay
back the loan by using some 50% of your tax payment; possibly plus a
5-10% surtax on income above poverty level.
The point is to make voters have their own accounts, so they are
mostly benefiting from their own money.  Only then, I believe, will
we be able to start making progress against the immorality of using
gov't violence in order to claim "other people's money".
And, maybe, even start reducing that corporate welfare that sucks up
so many tax resources.
NOT a libertarian socialist -- a paternalist.

Tom

now have a new address:
[EMAIL PROTECTED]"

The best thing to hit the internet in years - Juno SpeedBand!
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Re: some people are optimizers

[Robin Hanson]

On 6/30/2003, Wei Dai wrote:
A perfect optimizer who behaves according to decision theory (or some
bounded-rationality version of it) is very vulnerable to small changes in
its utility function definition or the module responsible for interpreting
the meaning of terms in the utility function definition. Such a change,
say a bit flip caused by cosmic radiation, or the introduction of a new
philosophical idea, could cause the agent to behave completely counter to
the designer's intentions.
In the rule-based agent, on the other hand, the utility function
definition and its interpretation are effectively dispersed throughout the
set of rules. If the rules are designed with appropriate redundancy, it
should be much less likely for a catastrophic change in behavior to occur.
This seems to me to confuse the decision with how the decision is
represented and implemented.  There are presumably many ways to disperse
a decision process and make it robust to random errors, and some of those
ways may be compatible with pretty optimal behavior.


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: Libertarian Paternalist!

[moti2]

 Who would manage these accounts? The person himself? If he is not competent enough 
not to save what makes you think they can invest?
Now the question is how much money do you give to the basic  poverty
fund? If you make it to low then people will not get enough basic benefits . If you 
make it to high then you risk the problem of losing work incentive.




"Great news for me ... I'm a Libertarian Paternalist!
I've long "what" I am, but just not the name.

I ESPECIALLY like the need of humans to direct money flow into
different accounts.  I support many gov't individual accounts:
a forced savings retirement account (SMART or whatever)--the second
pillar in 3-pillar pension reform schemes like Slovakia (first pillar
is poverty income to all, almost irrespective of contribution; third
pillar is optional tax-advantaged savings, like IRAs).

Health care & catastrophic insurance would be good, too.

I'd like an individual unemployment account; required to donate
until it reaches enough to pay you half your last year's salary (or
poverty income for year plus half the difference).

I'd like automatically elligible educational tax-loans, where you pay
back the loan by using some 50% of your tax payment; possibly plus a
5-10% surtax on income above poverty level.

The point is to make voters have their own accounts, so they are
mostly benefiting from their own money.  Only then, I believe, will
we be able to start making progress against the immorality of using
gov't violence in order to claim "other people's money".

And, maybe, even start reducing that corporate welfare that sucks up
so many tax resources.


NOT a libertarian socialist -- a paternalist.

Tom

now have a new address:
[EMAIL PROTECTED]"
 


The best thing to hit the internet in years - Juno SpeedBand!
Surf the web up to FIVE TIMES FASTER!
Only $14.95/ month - visit www.juno.com to sign up today!

Re: Marketing vs. Economics

[fabio guillermo rojas]

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