by Tyler Cowen
on January 29, 2012 at 8:08 am
1. More on animal nationalism, a tweet.
2. Perspectives on Ireland.
3. Should we de-fund college libraries? A lot of publishing models would change, books too.
4. Placebo markets in everything.
5. How do states act after they get nuclear weapons?
Arnold Kling decrying the marketplace buying BE Press So that he will he will no longer receive free articles.
Sort of like Gingrich attacking private equity.
3. Should we de-fund college libraries?
Change, it is coming.
“The ongoing world protests against SOPA, PIPA, and ACTA have helped inspire a revolt among scientists over the role of academic publisher Elsevier and its business practices.
British mathematician Tim Gowers kicked-started the campaign with a scorching blog post outlining numerous complaints against the publisher, which sells over 2,000 academic journals such as The Lancet and Cell. Gowers claims that Elsevier charges unacceptably high prices and forces libraries to subscribe to bundles of publications en masse – some of which have little, if any, scientific credibility.”
I am generally in agreement with Tim Gowers. However, one of his complaints involves Elsevier’s practice of selling access to many different journals as a massive bundle. I have read discussions, particularly in the context of cable TV, which suggest that bundling works much better for consumers than some naive arguments might suggest. I’d be interested in readers’ views on the balance of evidence here. My own university has much access to maths journals now than in the days before we bought the standard bundles, but I have no overview of the costs, and data would obviously be preferable to anecdotes.
Neil, the issue regarding bundling in publishing, and in particular electronic publishing, is very low marginal costs and revenue coming in from two sides of the market: advertisers and sponsors, and from subscribers. The antitrust test for predatory bundling involves selling below marginal cost in conditions of high barriers to entry. Hard to prove here, which means it is typically the wild west in terms of competitive behavior with respect to bundles which may impede entry, or at least blockade exit by sponsored pubs.
In my naive understanding bundling often transfers the buyers’ consumer surplus to the seller; whether the buyer is better off depends on the details of his reservation price’s heterogeneity.
e.g. Consider two customers with a heterogeneous reservation price of $100 and $60 and vice versa for two journals. In absence of bundling the seller can make a max of $240. With bundling he can make $320. Only the seller is better off here; he ate away the $40 cons. surplus of both buyers. Bundling didn’t help the buyers; it hurt them in a way.
Now imagine the same example but with reservation prices of $100 and $30. Now without bundling seller sells both journals at $100 each making $200. With bundling he’d make $260. Again the seller is better off bundling but in this particular example even the buyers are better off since now they can actually get both journals.
So whether the bundling is in the interest of consumers or not ought to depend on the specifics of the case.
Disney isn’t selling ESPN at the same price as ABC Family.
Bundled or not, I mean
The real question of academic publishers is transaction cost, reputation, and competitive practices.
A number of the pubs distributed by Elsie are not owned or sponsored by Elsie. So why their power. It has to do with the high transaction cost in distributing to niches. And, the power of bundling to introduce new pus, as well as the ownership of the pub article databases that complement the pub. Two sided market problem.
Typing from an iPad: pubs not pus.
Elsevier is a horrible offender, their business practices are apalling, but I don’t see how this defunding is supposed to work. My university has stopped subscribing to a large raft of journals due to budget cuts, and Elsevier’s offerings are a prime reason. We don’t even have subscriptions to the two specialty Nature journals that have been started in the past couple of years in my field as well. But if you look at the rates that are charged for them, versus what they contain, that seems to me to be a rational decision.
If I really need the paper I have ways of getting it, but it tends to annoy. This hurts the students far more than faculty or doctoral candidates.
Granted I am at a state university in a poor state, but it is the flagship institution, and my department is one of the larger departments in the school. I think the rates charged for journals these days are exploitative and getting close to unsustainable. When I talk to foreign colleagues, they often mention the same problems, and often their resources are even more scarce.
Who has the intellectual property rights of a Journal, I wonder. If the entire editorial staff of some Journal decided to move en masse from Elsevier to Wiley (say) can they pull it off?
What you do is look in the vitae or list of the authors pubs and you will usually find a PDF version of the paper Oran earlier working paper.
Another issue is the expense of building, maintaining and heating very large buildings for the purpose of housing all of these journals. Some of the biochemistry journals have tens of thousands of pages a year filling up many feet of shelves. Probably most of these articles are not read by a single person on campus. It would be far better for the environment to consign all of this to cyberspace and have the university pay for a subscription.
#4 – “Placebo” is a bit harsh. It’s a market in listening, sympathising, and encouraging. Sure… you could join a church or a sewing circle and maybe get the same goods at a lower cost. But these are typically barter markets. “You listen to my gripe, I’ll listen to yours.” The people in most need of such goods very often have little of their own to offer, and of poor quality to boot. Why not just pay money to directly get the boost you need?
If I paid someone to give me a boost I’d have a hard time convincing myself anything he was saying was true and worth boosting me. A related point I often wonder about is if psychiatrists can ever truly benefit much from therapy? If you know the protocol can you delude your mind about it?
As someone who has known a fair number of psychiatrists, I would say that you would be surprised how many of them went in to the profession precisely because they had mental problems of some kind. The only real question is did they go into the profession because it helped them or because they wanted to be on the other side of power dynamic that they had previously experienced? They all would claim the first, but I have seen a lot of evidence to support the latter.
I’ve never experienced therapy, but is there such a significant therapist-patient dynamic to make the patients later yearn to be a therapist? I’m wondering if ex-cons yearn to be jailers etc.; does overt power-play attract the victim or alienate him?
As an aside I’m curious if there ever has been a study correlating effectiveness of therapy and patient-IQ; I’d expect a strong negative effect of high patient-IQ on effective therapy outcome.
I have never seen studies that correlate effectiveness of therapy with IQ. But I have seen studies that say that people in the mental health professions are far more likely to suffer various mental ailments than people in other professions (including other medical professions). So you could speculate that their “knowledge” does not help them much or they had problems before they joined the profession. My experience would lead to me to believe that the both ideas are on the money.
But going on to your other question, convicts sure enjoy being jailers and they have been used in the role the world over. And I can’t speak for therapy outside the institutional setting. But inside the institutional setting there is a very big power dynamic going on.
Having said that, I had the pleasure of meeting a lady who had been institutionalized for mental problems who got out and became a psychiatrist. She had none of the airs that is all to common among people who have reason to believe that they have risen “above” their former compatriots. She treated the clients just like she was one of them and her goal was to get people out of there no matter what. All very admirable from a certain point of view. My only real problem with her is that she developed (or never really lost) a habit of leaving her feces in places that feces do not belong and blaming the housekeeping staff. That plus her habit of openly conspiring against administration got her escorted from the building in the end.
Maybe they went into the profession because they saw how much money could be made by just holding conversations with people and calling it “medicine” that is covered by insurance. As patients, they discovered the business model.
I had a friend who was young, good looking, talented, in excellent health and inherited a LOT of wealth. Far from a trust fund baby, he successfully managed commercial real estate long after his parents died. He felt sorry for himself because he never got the approval of his overbearing mother. He paid $200 per session each week to two different psychiatrists for more than two years. I told him for $400 per week I’d smack him in the head and tell him his mother had the mental problem and that he’s got a life most people wish they had.
The only thing his psychiatrists did was convince him he needed to come back next week. Too bad no one certifies psychiatrists as “safe and effective.”
If I paid someone to give me a boost I’d have a hard time convincing myself anything he was saying was true
But you’re not paying for flattery; in most cases, you’re paying people to talk you into overcoming psychological barriers in order to do things that are in most cases obvious (and the “boost” comes from successfully doing so).
Payment is necessary because of human nature. If your friend nags you to quit smoking, you ignore his free advice. But if you just paid some guy $500 and he tells you to quit smoking, using suitably esoteric or unusual phrasing to disguise the obviousness, you are more likely to listen.
Plausible but fallacious. Show me proof of effectiveness.
I think most of the benefit for this is that you’re in some ways paying for the cost of failure to be greater. If you have a high enough desire for the approval of others, simply making your goals or areas of desired improvement public information shifts the balance of costs and benefits.
I can pledge to myself that I start running every day. If I make this pledge to my life coach and have to confront him/her every period of x days to explain why I haven’t run (or to be praised for my adherence to the plan), that’s going to make me more likely to succeed in my goal, all else equal.
It’s a similar mechanism behind finding a partner with whom to join a class, start a diet, quit smoking, whatever. You have accountability to someone other than yourself. And when you succeed, there is someone there to witness the effort, and praise and congratulate you for your dedication.
Whether it’s a good economic decision to get a life coach is an entirely different matter.
I think we digressed into a discussion of psychiatry, Mario.
Your explanation for life coaches is plausible. Same is true with personal trainers. Still, there needs to be a measure of success. Not all professions keep track of and present clients with success rates, but doctors, lawyers, financial advisors usually have some scorecard or at least references.
Life coach sounds so terribly vague. It’s like buying a friend. In some cases, that might be advantageous. It’s also sort of sad and sorry.
How would the before/after nukes graphs look if one were to select comparable non-nuke states for the same time period, for example Netherlands v UK? Is there an underlying base rate to take into account?
#5 strikes me as an example of really poor reasoning dressed up with fancy graphs. To my mind the whole exercise is rendered moot by the lack of a control group. I am willing to bet that the majority of nations (especially developed ones) saw more armed conflicts in the 100 years before 1945 as opposed to the 100 years after. So the “decline in conflicts” measured may just be a reflection of all conflicts dropping off over the last 100 years.
Also, the author seems ignorant of of other dynamics that might account for the change in conflict levels experienced by the Nuclear powers. As the author admits, the USSR shows no drop off in the level of conflict initiated pre/post nuclear conflict. Not only is this a pretty big exception, but it could also account for the drop off in conflicts in other countries that acquired their nuclear weapons as the USSR’s ability/desire to engage in proxy conflicts waned. One thinks particularly of Israel in this context.
Also the giving up of European empires and the end of colonial conflicts could account for much of the drop in France and UK without atomic weapons having any effect.
Most two-variable models are devoid of meaning, and two dimensional charts are oten two variable representations.
Such observations might lead to building a more rigourous multidimensional model. I don’t fault people for chartism as long as they don’t attempt to present the observations as more meaningful than they really are.
Even if you have a series of many charts, you violate ceteris paribus or commit omitted variable bias.
Yes, Ape Man. I *agree* with his conclusion, and still think the whole piece is nonsense.
I agree the study is silly and ill thought through. Any conclusions that could be derived from the study are undermined by the inclusion of South Africa, which is a harbinger of the effect of a nuclear weapon in the hands of a pariah state.
I suspect the reason Iranian sympathizers haven’t trotted out similar studies has to do with the moral “ick” factor of trying to justify the proliferation of nuclear weapons. It is likely impossible to claim the moral high ground and advocate for the spread of weapons that can only be used to commit a war crime and, possibly, destroy the world.
#2 — Good round-up of Irish viewpoints and economic policy prescriptions, which shows that there is no good solution for Ireland’s mess. I personally think there’s a 60% likelihood that Ireland will have to default, even though public opinion still supports austerity. The Irish people love the EU, and are willing to tolerate a remarkable amount of pain to sustain their good standing in Brussels. But eventually the impossibility of paying off their staggering debts, and the need to increase exports through devaluation, will force them into some kind of default. The simplest (but least palatable) course would be to leave the Eurozone.
Oops. Did not see Bill’s comment.
ApeMan has it right. The highest rate among professionals are psycharists. They are a waste of time/money. If they can solve their own mental issues then how can they help anyone else.
I strongly disagree, GreenLeaf. Psychiatrists (who are highly trained) help save the lives and improve the quality of life of their patients…not a waste of time or money.
Where is the measure of success?
I could argue that as many people have been “cured” of depression by reading the Bible, reading Dilbert, consulting psychics, smoking pot, getting massages, or finding a hobby. None of these alternatives charge $200 for fifty minutes of mental snake oil.
Most people I know who have been through psychiatric treatment or counselling were no different at the back end.
Oh, I’d like to see more of this “Placebo markets in everything” series … Maybe with some economists giving advice? Sure there are some life coaches, therapists, and psychiatrists who don’t do much good for their paying patients … true of primary care physicians, financial advisers, engineers, economists, etc. There is a range of quality in all markets…buyer beware. But sometimes the lack of a positive effect may be as much the advisee’s “fault” as the adviser’s. It’s not easy for high functioning people to accept that their mind may be friend AND foe or that some of their life strategies are less than perfect. The idea that we can solve all our problems on our own is as much a non starter as the idea that other people can solve all our problems. What’s so wrong with a little help?
You make a valid point. Garbage in, garbage out. A mechanic can’t fix all cars and a good psychiatrist with effective methods can’t help everyone.
Still, the burden is on the pyschiatric profession to prove it is safe and effective. Caveat emptor doesn’t apply to fraud.
What’s wrong with “a little help” is that it is paid for by insurance for which the rest of us must pay premiums. If I proved to you that psychiatry had a poor success rate but going to church had a much better success rate, would you approve of insurance putting money in the collection plate?
I think insurance companies have been goaded into paying for psychiatry the same way they were goaded into paying for chiropractic. As long as they could charge enough in premiums to everyone to compensate for noneffective treatments, they didn’t mind. But the rest of us do mind. To the extent we have a choice of coverage, we can pick a plan that excludes things we don’t wish to pay for.
What if the most effective treatment for mental illness was torture? That’s not as far-fetched as you might initially think. Fear and pain activate a self-preservation response. I present that to be provocative, not for discussion of its merits. I’m merely suggesting that something destructive at worst and ineffective at best might have become too firmly established to be rooted out.
Willitts, sounds like you should buy a major medical plan or a basic HMO … not a lot of bells and whistles. Oh, but you’ll still pay for the health care of people who don’t manage their weight well and smoke, which I would guess add more than mental health costs.
I am entirely unconvinced that psychiatrists are a bunch of frauds, your anecdote and enthusiasm not withstanding.
Moreover, untreated psychiatric conditions often are torture for those individuals and their families. There are many chronic physical ailments, like diabetes, which used to be a death sentence (before insulin) and are now manageable. One of the primary jobs of psychiatrists is prescribing and managing medication.
Further research on the effectiveness of medical treatments is not just important for indirect payers like you, but also for the patients. As an economist, I agree that the health care system would benefit from stronger price signals, but I disagree that we should attack whole medical specialities.
I don’t doubt Claudia that poor lifestyle choice pump up my insurance premiums more than the mentally ill. That’s beside the point.
If someone has clogged arteries, I know that the treatments work. I KNOW this; I’m not guessing this. I don’t get to choose my insurance pool, but I do know that the illnesses are real and their treatments are effective.
I have no such confidence in diagnoses and treatments for mental illness. I will accept schizophrenia as a bona fide mental illness. I do not accept Chronic Fatigue Syndrome as bona fide. I don’t consider comfort animals a bona fide treatment if CFS. It is a waste of money.
Sorry, but i don’t have the burden to prove psychiatry is bunk. Psychiatrists have a burden to prove they are effective. I’m not “attacking” psychiatry because I demand to know that they are more than just paid conversationalists. I could read a few books, grow a beard, and pretend to be a psychiatrist. I think I could be pretty good at it. I could look up medication and drug interactions on Wikipedia. The fact they have MD degrees is not persuasive.
Generally, if I can do something I’m not trained in, I’m not impressed by people who do it for a living.
I had a coach for a while back in the late 90s and she was very helpful. I was a young CEO and did not have a lot of people I could be vulnerable with (at least, so I thought). It’s not just about dumping your problems on someone, it’s about coming up with a concrete plan to fix them.
4. Even if we assume a correlation between age and wisdom, the primary commodity that life coaches are selling is not wisdom, but attention. In many cases, you just need to get the person to follow through on obvious advice.
Young people are physically attractive and full of potential, like the old used to be before doors started closing behind them and options began narrowing. To have a young person pay attention to you as a peer is to feel that you’re still alive and kicking, it’s not too late, you’re not over the hill.
Young people often benefit from older life coaches…more commonly known as mentors. (Probably best when the mentors are just wise and not physically attractive.) The most important life lessons are learned by experience, but a mentor can help point out some common mistakes / successful strategies.
3. Why have journals? Why even have peer review prior to publication?
Publish EVERYTHING online. That’s exactly what legal decisions are. Not all of them are correct. Many are overturned. Yet we have a system of citations whereby we see what cases have been cited, and which have been overturned. In a sense there is a form of peer review through appeals, but only when a decison is appealed and granted cert or writ.
Publish every economic paper. Allow professional peers to make comments on them. Let peers vote on comments to make them rise to the top or fall to the bottom; make voting transparent. Have links to follow-on papers that relax assumptions, extend the paper, or address the same subject matter in a different way. Manage the system so it is not an echo chamber. Permit comments by people who are not members of the profession through proxy so that smart people outside the profession can have a voice.
Papers can be revised based on comments with the original versions remaining archived.
I’m envisioning something more formal than a blog but less formal than the rigid system we have now.
Isaac Newton and Galileo had no peer reviewers prior to publication although the latter had some powerful critics.
What is the #1? When I click it I don’t see any tweets about animal nationalism.
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