Agreement has been reached on the controversial wage agreement for members of four Icelandic unions. This means that major strike action will be called off.

The Icelandic Union of Commercial and Office Workers (VR), the Commercial Federation of Iceland (LÍV), Flóabandalagið and Stéttarfélag Vesturlands have agreed to a final version of the agreement and the characteristic aroma of waffles has filled the negotiation venue.

Making waffles is a traditional Icelandic way of marking and celebrating the successful conclusion of negotiation of this type.

The story is here, good photo of political leadership.  Note that some of the unions were asking for fifty percent pay hikes and threatening strikes, I believe they did not get everything they were asking for.  Yet not all is well and one can only hope that more waffling is in order:

Wage disputes remain ongoing with the Icelandic Nurse’s Association, the Icelandic Association of Academics (BHM) and the Icelandic Professional Trade Association (SGS) and strike action planned by members of these unions remains on the timetable.

For the pointer I thank Peter Kobulnicky.

Saturday assorted links

by on May 30, 2015 at 1:10 pm in Uncategorized | Permalink

1. The sports culture that is Texas.  Which is also an argument for a Pigouvian approach.

2. Isn’t this from a Monty Python skit or something?

3. India arrests pigeon accused of spying for Pakistan.

4. Visualizing how the best firms drive inequality.

5. Minnesota Lost and Found.

6. The rise of elitism in economics.

7. Varoufakis’s Great Game?

The still-underrated Todd Kliman interviews her:

I’ve been given special powers, and I appoint you czar (funny, isn’t it, how we have so many appointed czars in this unaristocratic country) of food in the US. What is your first order of business? What sorts of laws do you push for? What public statements do you make? What is your 5-year plan? Your 10?

Me? A czar? My first order of business would be to go to the bathroom and throw up in sheer terror. I’m not a fan of appointed czars or of five-year plans. I am a fan of incremental changes. Look what’s happened in the 15 years since I wrote the article. Walmart’s become a major player, so has Monsanto, celebrity chefs, sustainability, and locavore have become household words, fats and sweeteners have been vilified and un-vilified, and now Taco Bell is removing artificial flavoring and coloring, corporations are scrambling to make their products appealing to those who want healthful and organic foods, and McDonald’s is in trouble. No one could have predicted or managed these changes. And many have happened through the power of the word. So I’d turn down the offer. The pen is mightier than the czar!

Some of the faux companies even hold strikes — a common occurrence in France. Axisco, a virtual payment processing center in Val d’Oise, recently staged a fake protest, with slogans and painted banners, to teach workers’ rights and to train human resources staff members to calm tensions.

The article, by Liz Alderman in the NYT, is about imaginary companies in Europe, most of all France:

More than 100 Potemkin companies like Candelia are operating today in France, and there are thousands more across Europe. In Seine-St.-Denis, outside Paris, a pet business called Animal Kingdom sells products like dog food and frogs. ArtLim, a company in Limoges, peddles fine porcelain. Prestige Cosmetique in Orleans deals in perfumes. All these companies’ wares are imaginary.

The thing is, these imaginary companies come attached to some very real benefits for workers, and, it seems, some of the capitalists too.

For the pointers I thank Rian Watt and Samir Varma.

Friday assorted links

by on May 29, 2015 at 11:28 am in Uncategorized | Permalink

1. The culture that is Wisconsin.

2. One first person account of “the wife bonus.”

3. Branko Milanovic on FIFA corruption.

4. Utah fights against homelessness.

5. Indian MIE: the “Luft-wafer.”

6. Can nostalgia boost creativity? (speculative)

7. The economics of ad blockers.  And more relevant material here.

Most indie films and documentaries don’t get to most markets. It’s hard for a theatre to know which of the many indie films audiences really want to see and without the scale of a NYC it doesn’t make sense for theatres to gamble on a screening that might not make audience.

R.J. Lehmann writes about Tugg, a new service that allows someone who wants to create an event to pull the movie to a local theatre:

With Tugg, a user chooses a film and the date, time and the theatre where he or she would like it to be shown. If the theatre approves the request, Tugg creates a personalized event page for the user through which tickets can be sold. If sales meet a set threshold goal before the set deadline, then the screening is on; if not, it’s cancelled and those who bought tickets are refunded their money. As a bonus that provides ample incentive to promote screenings, users who organize events get to keep 5 percent of the gate.

…Essentially, what Tugg offers is what is known in game theory circles as an assurance contract. (That’s ASsurance, not INsurance.) As my old colleague Alex Tabarrok, who has done some pioneering work on the subject, explains:

In an assurance contract, people pledge to fund a public good if and only if enough others pledge to fund the public good. Assurance contracts were not well-known when I began to write on this topic but have now become common due to organizations like Groupon and Kickstarter, which work on this principle (indeed, I have been credited with the ideas behind Groupon, although sadly for my bank account, I don’t think that claim would stand in a court of law). Since no money is paid unless the total pledges are high enough to fund the public good, assurance contracts remove the fear that your contribution will be wasted if other people fail to contribute.

In essence, Tugg handles the logistics of creating a movie event and the assurance contract assures that the event will be profitable.

Arrived in my email

by on May 29, 2015 at 4:31 am in Books, Economics | Permalink

The book itself has not yet come to my pile, though perhaps it still will.  This one is self-recommending, so here is the basic information, it is due out June 2:

Alvin Roth, Who Gets What — and Why: The New Economics of Matchmaking and Market Design.

If you do not know why this is self-recommending, here are previous MR posts on Alvin Roth.  And here is the book’s home page.

Nearly half of the biggest US metropolitan areas have yet to recoup all the lost jobs from the Great Recession and almost a third have failed to return to previous levels of output, according to analysis that underscores the fragmenting urban fortunes beneath the surface of America’s recovery.

Research on 100 urban areas from the Brookings think-tank, reveals an economic patchwork in which the legacy of boom and bust hangs heavily over cities in Florida and inland California, while at the other end of the spectrum, technology and bioscience-focused cities such as Austin, Texas, San Francisco, and Raleigh, North Carolina have comfortably surpassed their previous peaks.

“This may be the norm now — extreme variation,” said Mark Muro, policy director for the Metropolitan Policy Program at Washington-based Brookings.

That is from Sam Fleming and Demetri Sevastopulo.

A memorial dedicated to the 32 Basque whalers who were killed in the West Fjords in 1615 in what’s known as Iceland’s only mass murder was unveiled in Hólmavík, the West Fjords, on April 22, the last day of winter. At the occasion, West Fjords district commissioner Jónas Guðmundsson revoked the order that Basques could be killed on sight in the region.

“Of course it’s more for fun; there are laws in this country which prohibit the killing of Basques,” Jónas told mbl.is. When asked whether he’s noticed an increase of Basque tourists since the order was revoked, he responded, “at least it’s safe for them to come here now.”

President of Gipuzkoa Martin Garitano spoke at the ceremony, as did Icelandic Minister of Education and Culture Illugi Gunnarsson, strandabyggd.is reports. The speeches were followed by musical performances and a moment of prayer.

The program included Xabier Irujo, descendant of one of the murdered Basque whale hunters, and Magnús Rafnsson, descendant of one of the murderers, taking part in a symbolic reconciliation, as it says on etxepare.eus.

There is more here, via Peter Kobulnicky.

The Essential Hayek, by Don Boudreaux.  I cannot (yet?) find an Amazon listing.

Adrian Wooldridge, The Great Disruption: How Business is Coping with Turbulent Times.

Dirk Philipsen, The Little Big Number: How GDP Came to Rule the World and What to Do About It.

Steven J. Levitt and Stephen J. Dubner, When to Rob a Bank…and 131 More Warped Suggestions and Well-Intended Rants.

Dan Ariely, Irrationally Yours: On Missing Socks, Pickup Lines, and Other Existential Puzzles.

Brendan O’Flaherty, The Economics of Race in the United States.

Right now there is lots in the pile, but I thought I should let you know about those right away.

Assorted links

by on May 28, 2015 at 12:47 pm in Uncategorized | Permalink

1. The limits of self-driving trucks?

2. Indian public announcements.

3. United had men-only flights until 1970.

4. Profile of Hélène Rey (pdf).

5. Canada is the world’s biggest exporter of lentils.

Joel Shurkin reports:

Ants — most are teeny creatures with brains smaller than pinheads — engineer traffic better than humans do. Ants never run into stop-and-go-traffic or gridlock on the trail. In fact, the more ants of one species there are on the road, the faster they go, according to new research.

Researchers from two German institutions — the University of Potsdam and the Martin Luther University of Halle-Wittenberg — found a nest of black meadow ants (Formica pratensis) in the woods of Saxony. The nest had four trunk trails leading to foraging areas, some of them 60 feet long. The researchers set up a camera that took time-lapse photography, and recorded the ants’ comings and goings.

…Oddly, the heavier the traffic, the faster the ants marched. Unlike humans driving cars, their velocity increased as their numbers did, and the trail widened as the ants spread out.

In essence ants vary the number of open lanes, but they have another trick as well:

“Ant vision is not that great, so I suspect that most of the information comes from tactile senses (antennas, legs). This means they are actually aware of not only the ant in front, but the ant behind as well,” he wrote in an e-mail. “That reduces the instability found in automobile highways, where drivers only know about the car in front.”

Driverless vehicles can of course in this regard be more like ants than humans.

Enough said

by on May 28, 2015 at 2:35 am in Current Affairs, Economics, Law | Permalink

Labor leaders, who were among the strongest supporters of the citywide minimum wage increase approved last week by the Los Angeles City Council, are advocating last-minute changes to the law that could create an exemption for companies with unionized workforces.

The push to include an exception to the mandated wage increase for companies that let their employees collectively bargain was the latest unexpected detour as the city nears approval of its landmark legislation to raise the minimum wage to $15 an hour by 2020.

The story is here.  And here is a mood-affiliated Jared Bernstein piece on the L.A. minimum wage hike; it would have been stronger if all he had written were the simple eleven words: “I’m sorry, but I don’t think this is a good idea.”  In a way, the labor unions have just said the same.

Hat tip goes to Modeled Behavior.

I suggest two plans, each of which I have been able to implement in a partial way only:

1. Take the train around to random first, second, and third tier Chinese cities.  Many of them will have their own cuisines, or they will represent a nearby regional cuisine.  It’s like discovering the food of a new country.  Imagine if Shandong province were a separate country!  How compelled you would feel to visit it for the food, often considered China’s foundational cuisine, plus it uses the finest vinegars.  And yet, because it is part of “China” (Gavagai!), you feel you already know something about Chinese food and thus the need to sample it is not so pressing.  Redo your framing, and rush to some of the lesser visited parts of China.

By the way, you can stay in the second or third best hotel in most Chinese cities for only slightly more than $100 a night, and yet receive five star treatment and quality.

2. How many provinces does China actually have?  I don’t wish to litigate that dispute, but most of them have restaurants devoted to their regional dishes in Beijing.  These are state-owned restaurants, and most of them are excellent.  Furthermore they are scattered around town, so if you visit them all you will see many parts of Beijing.

A month in Beijing should allow you to visit them all, plus the air pollution really is better these days.

I should add that western China has by far the best raisins I have sampled in my life, most of all the big red raisins.  Until my trip to Xi’an, I had never actually tried a real raisin with the real raisin flavor.  Forget the Terra Cotta Warriors, discover what a raisin is!

Assorted links

by on May 27, 2015 at 2:15 pm in Uncategorized | Permalink

1. Critical review of the Alice Goffman book.  Like Alex, I thought the felony made the whole thing more interesting, though of course I do not approve.

2. Fertility is rising for educated women.

3. Has there been a supercapacitor breakthrough?

4. The Future Library.  Will anyone care?

5. The Chinese strategic tradition.  Will anyone care? (yes)

6. John Nash on encryption.

7. New Politico site on ideas and policy.