Month: July 2005

Game theory questions about Japanese TV

Have you ever noticed that Japanese TV shows start at odd times?  One show starts at 6:58, another at 7:00, and another at 7:05.  Why is that?

A.  Until several years ago, most Japanese TV shows did start exactly on the hour, but because of the TV ratings war, some stations decided to get the jump on their competitors and start their programs a little earlier. The networks realised that because most programs ended a little before the hour, people would often start channel surfing, but they would be more likely to start watching a station that wasn’t airing commercials at that time. Similarly, if a program runs until a little past the hour, viewers are more likely to watch the next program because they have missed the beginning of programs that have already started on other stations. Now that every station (except NHK) does it, there is nothing to be gained from starting programs earlier or later, and the stations have become trapped in a vicious circle where starting times are getting earlier and earlier.  Thanks to all the people (too numerous to list here) who sent in answers to this question.

Here is the link, which contains a lengthy list of fascinating questions (and answers) about Japan. You could spend half an hour there.  Many Japanese think green is a shade of blue, and they often take off their shoes before committing suicide.

The economics of Las Vegas

Casino/hotels invest resources to keep you within their space, so you will gamble on behaviorally tempting negative-sum games. This means excellent food at bargain prices, and of course disorientating space designs as well.  No one can find their way through a big casino for the first time without getting confused.

These two features — food quality and imperfect mobility — are two sides of the same coin.  You are more likely to gamble where you eat, so they win back your culinary gains on the slot machines.  If gambler mobility increases enough (e.g., Las Vegas now has a monorail), the quality of casino food will decline.  There is no point in luring in those who will not stay.

For the pure non-gambler such as myself, it is the cross-subsidies which make the city attractive.  I get the lower prices and never cough the money back up at the slot machines. 

Would more mobility across casinos make me better off?  On one hand, more mobility would mean more freedom of choice.  I would no longer be stuck in the hotel restaurant, unwilling to navigate the casinos and the deliberately unsynchronized traffic lights along the main road.  Yet the macro-state of being stuck (ex post, but not ex ante, when choosing a hotel) also delivers, in competitive equilibrium, lower prices and higher quality for the meals I want.  Do I love or hate this unusual trade-off?  Is this how life in a gilded cage would feel?

How can non-casino restaurants survive here?  They must compete against highly subsidized competition.  Yet the range and quality of non-casino places is first-rate.  Does this mean that restaurants elsewhere could be better — essentially for gratis — if only they had to try harder?  Have we found "X-Inefficiency" within the restaurant industry?

I’ve opened up the comments section.

The Volunteer Army’s Most Important Benefit

Fred Kaplan at Slate.com has a nice article on the combat capacity of the US armed forces. The key point is that only 40% of military personnel are combat troops. Right now, there are about 390,000 troops who are prepared to fight in Iraq or elsewhere, although the Army has nearly a million soldiers. The rest are in support roles like medicine and administration. Kaplan says this is good. Volunteer soldiers are better motivated and better trained. The draft requires the armed services to accept people who don’t want to be soldiers, or who simply don’t have the right personality or skills.

Although it comes at the end of the essay, Kaplan makes a deep observation about the volunteer Army and democratic politics:

“Does America want to be–can it be–the world’s policeman, colossus, liberator, call it what you will? If so, with what resources? By itself or with allies? Through international law or by whim?

Whatever the answers, there is a potentially calamitous mismatch between the Bush administration’s avowed intentions and its tangible means. They can print or borrow money to float the national debt. They can’t clone or borrow soldiers to float an imperial army.”

So there you have it. The volunteer army is a natural check and balance on the executive branch. There is nothing about the democratic process that will stop a popular leader from waging wars. Voters, courts and legislatures are willing to cut the executive branch a lot of slack when it comes to war. However, a volunteer army imposes a strict limit on how many wars the President can fight. Ask yourself this: Would Lyndon Johnson have pursued his relentless escalation of the Vietnam war if he had only 400,000 American combat troops to cover the entire world?

Frying Eggers: Part Deux, or Teacher’s Pay Again

Last year, I ripped Dave Eggers when he complained about low teacher pay. But there he goes again – he was in last week’s New York Times lamenting the fact that teachers have to work in the summer! Dave might enjoy this debate between economists Michael Podgursky, from the University of Missouri-Columbia, and Lawrence Mishel, President of the Economic Policy Institute. They’ve spent the last couple of years figuring out how much teachers get paid when compared to other professionals. Click here to read a nice exchange between them. As you might imagine, it’s tricky. How should one account for summer vacation? Part time employment? Extra hours spent at home grading papers? How about fringe benefits and perks? It’s not a question for meek.

The key issue isn’t how much they get paid, or whether they get paid less than other people. It’s all about supply and demand. Just ask yourself: what’s the supply? What’s the demand? In a nutshell, teaching is a profession with modest to high demand but low barriers to entry. Eggers & co propose higher teacher pay. And, of course, higher pay will attract better applicants. But that’ll only go so far. Low barriers to entry will always produce downward pressure on wages.

As one skeptic pointed out, the real problem isn’t low pay. You don’t want to pay people just for being teachers. You want to pay good teachers. Even if you get good applicants, they could still flake once they get the job. So here’s my suggestion for the state governments and teacher’s associations:

  • Create a system of voluntary standardized tests in different subjects. Make ’em tough so you can really figure out who knows their subject.

Here’s my suggestion for teachers:

  • Create a teaching portfolio that shows what you’ve done. It could have syllabi, student projects, testimonials, standardized test scores, analyses of student performance, etc.

School districts should then demand portfolios and test scores from teachers and then pay them according to how well they do in these two tasks. Even if a math teacher isn’t a master of calculus, they could still show that they are really good at teaching basic math, or working with underprivileged children. A school district that publicizes teacher knowledge and abilities can then make informed judgments and come up with a decent strategy for hiring, given their budget. Maybe I’m misguided, but it’s probably a better approach than just raising everybody’s paycheck.

Lunch Matters

At lunch with Bryan and Tyler last week the question arose as to what we would do differently if we were immortal.  After a nerdy discussion to clarify what sort of immorality we were talking about; the kind where you can’t be killed but can be imprisoned or the kind where you are forever young but may be hit by a truck?  (it was the former) –  I answered that I would travel more.

Later the question was asked, what would you do differently if you found out you had only a short time to live.  I answered again that I would travel more.  Click, buzz, whirr…does not compute, does not compute.  Even before Bryan or Tyler could point out the inconsistency I realized there was a problem.  Given that I would travel more if I was to live either less or more the probability that I was at just that level of mortality that I should not be traveling now must be vanishingly small.

I leave for a solo trek to Machu Picchu July 25.  Lunch matters.

Peru_Machu_Picchu_Sunrise_2

Favorite movies of great directors

Tarantino, Lumet, Jarmusch, Bertolucci, and others were asked to name their ten favorites, here is the link

Here is Paul Verhoeven’s list:

1. La Dolce Vita (Fellini, 1960)
2. Ivan the Terrible, Part II (Eisenstein, 1958)
3. Lawrence of Arabia (Lean, 1962)
4. Rashomon (Kurosawa, 1951)
5. Vertigo (Hitchcock, 1958)
6. The Seventh Seal (Bergman, 1956)
7. La Règle du Jeu (Renoir, 1939)
8. Metropolis (Lang, 1927)
9. Los Olvidados (Buñuel, 1950)
10. Some Like It Hot (Wilder, 1959)

Thanks to the ever-excellent www.2blowhards.com for the pointer.

Thoughts on a Berkeley Education

Steve Jobs, founder of Apple, NeXT and Pixar, recently gave
a most excellent speech at Stanford University (click here – it’s really good). Among other things, Jobs talks about what he learned
from his time at Reed College before dropping out to be an entrepreneur. Jobs’
speech made me think about my own undergraduate years at UC Berkeley, where I
made many lasting friendships and met my future spouse.

Berkeley is like a lot of state schools: massive classes
with atrocious instruction, poor facilities and the students are a little too
concerned about sports. However, Berkeley, at least during my time, had two
features that made it really stand out, even from other big public schools and
elite private schools.

First, Berkeley was a remarkably open institution in the
sense that most classes were open to most students. The advisors might try to
steer you one way or another. In practice they didn’t try very hard, so most
any student could take most any class. This meant that a student with a clear
sense of what they wanted could craft any sort of education they wanted. If
they so desired, they could skip to the most challenging classes and not waste
time. This also meant that you could avoid the classes taught by graduate
students and learn from the most talented scholars out there. I’ve discovered
that you can’t do this in many colleges because there aren’t enough students to
support lots of advanced courses, or the students aren’t talented enough to
support advanced classes in fields like foreign languages and the physical
sciences. For a determined student, Berkeley was an intellectual buffet.

Second, the student population was really unique because
anyone who worked hard enough could get in. This is not true for elite private
schools because they demand that students show “well roundedness,” often shown
through travel, violin playing and other expensive activities. And even if you play your cards right, tuition was really prohibitive. If you could score
high enough on the SAT and GPA, you would automatically get into Berkeley. The
fees were substantial but not prohibitive. As a result, you had a really
fascinating combination of students.

Of course, there were lots of folks who
spent four years wondering why they weren’t in Palo Alto or Cambridge. But you also had a lot of amazing students who were at
Berkeley because they were really smart and it was cheap, or they didn’t quite
fit the profile of a typical private school admit. There was a just a great
energy to be had from throwing these folks together. For these reasons, I tell
people that “Berkeley is the great walk-on team of American higher education.”
You don’t need $36,000/year to audition or a specific last name. Just get good
grades and SAT scores, and they’ll give you a shot to play with the pros. No
guarantees, but work hard, show up and you’ll get your chance.

The rise of Korean popular culture

South Korea, historically more worried about fending off cultural domination by China and Japan than spreading its own culture abroad, is emerging as the pop culture leader of Asia. From well-packaged television dramas to slick movies, from pop music to online games, South Korean companies and stars are increasingly defining what the disparate people in East Asia watch, listen to and play.

The size of South Korea’s entertainment industry, which began attracting heavy government investment only in the late 1990’s, jumped from $8.5 billion in 1999 to $43.5 billion in 2003. In 2003, South Korea exported $650 million in cultural products; the amount was so insignificant before 1998 that the government could not provide figures.

But the figures tell only part of the story. The booming South Korean presence on television and in the movies has spurred Asians to buy up South Korean goods and to travel to South Korea, traditionally not a popular tourist destination. The images that Asians traditionally have associated with the country – violent student marches, the demilitarized zone, division – have given way to trendy entertainers and cutting-edge technology.

Here is the full story, and yes some of the material is getting to North Korea as well.

Acting White Puzzle

Tyler recently mentioned a paper by Ronald Fryer and Paul Torelli that looked at the correlation between academic achievement and popularity among ethnic groups. Click here to read the original paper. Motivated by research claiming that academically successful black high school students are less popular with their peers, Fryer and Torelli crunch some numbers to figure out if it’s really true.

Here’s the main finding. For White students, the higher the grade the more popular the student. For Black students, the same holds true except for kids with GPA’s > 3.5, who experience decreases in popularity. For Hispanic kids, popularity starts to go down when they hit a GPA of 2.0 to 2.5. (This is from Figures 1A-4A listed after page 43).

Here’s the puzzle for Marginal Revolution readers: Why is the peak popularity so different for Black and Hispanic students? In other words, why is the "Acting white" penalty only relevant for high achieving black students while it kicks in at a meager 2.0 GPA for Hispanics?

Readers are invited to email me their thoughts on the topic (frojas at indiana dot edu). Fryer and Torelli allude to this Black/Hispanic difference, but they don’t really get into an explanation of it. Don’t quibble with the data – it’s from a high quality survey and popularity is objectively measured, rather than self-reported. I’ll post reader responses and my own thoughts in a few days.

Class Struggle – Fun for the Whole Family

The goal of Class Struggle is to teach people about how capitalism really works, at least according to Marxist theory. Each player plays a class (Workers, Capitalists, Farmers, etc.) because individuals aren’t the real players in capitalist societies. Each class moves towards the center of the board collecting assets and suffering penalties. The strategy is to accumulate as many assets as you can until the Revolution arrives. If you have the most assets when the Revolution comes, you win the game.

The game isn’t terribly fun to play, as one would expect from a game emphasizing oppression, unfairness and struggle. But much fun can be had reading the rules and the “chance” cards that give you assets. For example, the expanded “Full Rules” for deciding who gets to play the Capitalist class are designed to show players unfairness towards women and ethnic minorities: “Full Rules calls for the following: beginning with the lightest White male and ending with the darkest Black female, everyone takes turns with the Genetic die to see who throws capitalist class first.” I’m proud to say that I’ve won a few games, despite my modest disadvantage as a Latino male.

The chance cards are great fun. These two examples are for the Capitalist class:

  • “You are caught feeling sorry for the Workers. Victory in class struggle comes to people who think about their own class. Miss two turns at the dice.”
  • “Paperback edition of Marx/Engels Collected Writings (100 volumes) sweeps the country. Your days are numbered. 2 debits.”

These are for the Workers:

  • “Workers finally understand that with America’s wealth and democratic traditions, socialism here will be different than what exists in Russia and China. A biggie – worth 5 assets.”
  • “Together with your fellow workers, you have occupied your factory and locked your boss in the toilet. Capitalists miss 2 turns at the dice.”

These two chance cards are counter-Marginal Revolutionary:

  • “All your propaganda says a person is free when the Government lets him alone. But almost everything one wants to do or have costs money, so only Capitalists are really free.”
  • “You publish an ‘educational’ booklet to explain that in capitalism people – as consumers – vote for what they want with their dollars. You neglect to mention that in most industries, a few firms without any effective competition decide what to produce and what to charge, or that Capitalists who have the most dollars have the most votes. Give each class in the game 1 asset so they have money to buy your booklet.”

The game has other fun rules like the nuclear showdown option: if capitalists push the button, no one wins! Bertell Ollman might be interested in knowing copies are selling for about $15 on Ebay.

Is gambling good for you?

Las Vegas is a running advertisement for behavioral economics.  I am pondering whether I still believe what I once wrote about gambling:

Gambling, buying lottery tickets, and other forms of impulsive risk-taking…may contribute to inter-self cooperation.  Risk-taking increases the uncertainty of future payoffs; persons who periodically take risks may thus avoid the feeling that their situation is a dead end.  The belief that the future is hopeless might disrupt patterns of self-cooperation and break down discipline, as persons who see no hope for the future might have problems constraining themselves from drinking, taking drugs, or engaging in other destructive practices.  An impulsive self strong enough to induce a person to take chances may thus indirectly contribute to control other, more dangerous impulses.

Here is the full essay, noting that I have never intuitively understood the attraction of gambling.