Month: June 2006

Price Discrimination by Search Type

Many travel websites let you order your search results by price, by travel time, by quality and other variables.  Ross Parker has discovered that on at least one website prices differ depending on how you ask your search to be ordered.  In particular, if you ask for prices to be listed from lowest to highest you get lower prices, on exactly the same hotels, than when you ask for highest to lowest prices.  Of course, this is consistent with a very clever price discrimination scheme.

Comments are open.  I am interested to know whether anyone can verify the same phenomena on other websites.  Here is Ross’s data.

The site is Metro Getaways, a newspaper-linked travel site operated in the UK by Driveline. The prices are for a two-night break in Madrid on 4th August 2006, with flights from London.

Hotel Rating Price (Lowest First) Price (Highest First)
Francisco 1 Hotel 2* £146.80 £169.50
Asturias Hotel 2* £147.65 £170.35
Tryp Washington 3* £174.00 £196.70
Tryp Rex 3* £174.00 £196.70
Tryp Menfis 4* £184.20 £206.90
Tryp Ambassador 4* £189.30 £212.00
Vincci Soho 4* £192.70 £215.40
Gran Melia Fenix 5* £257.30 £280.00

Markets in everything: even teaching

For all those teachers who take work home at night, creating lessons they hope kids will like, the reward is a good day in class. Now there could be another payoff: cash. Teachers are selling their original lectures, course outlines and study guides to other teachers through a new Web site launched by New York entrepreneur Paul Edelman.

The site,, aims to be an eBay for educators. For a $29.95 yearly fee, sellers can post their work and set their prices. Buyers rate the products.

"It’s a way to pat teachers on the back, to value what they do," Edelman said. "They create the material night after night. The best way to value that is to put a price on it."

…Need a lesson about the history of China? How about a way to teach the Industrial Revolution through documentary photography? Or a manual for organizing a poetry slam?

They’re all for sale. Many of the items go for only a dollar or so.

Here is the link; they don’t yet seem to have economics.  For the pointer, thanks to BZ from Portugal.

China facts of the day

Suicide is now the biggest single killer among young Chinese people, the country’s first national suicide survey has shown.

Each year more than a quarter of a million people in China are taking their own lives, the study showed.

But the most significant finding was that, unlike almost everywhere else in the world, more women than men commit suicide.

Suicide now accounts for a third of all deaths among women in the countryside.

In the study, to be
published in British medical journal, The Lancet, US and Chinese
researchers discovered there was apparently a significantly lower rate
of mental illness among those committing suicide than would be the case
in the West.

Dr Michael Phillips, who
helped lead the study, told the BBC that while 90-95% of those taking
their own lives in the West suffered significant mental illness at the
time of attempting suicide, around a third of those in China did not.

…the biggest single reason why so many suicide attempts in China are successful is their method.

Nearly two-thirds of them are by consuming pesticides and powerful rat poisons which are extremely easy to buy in China.

Here is the story, courtesy of

The best two sentences I read today

Wage dispersion among narrowly defined groups of workers is substantially larger for older and more educated workers than for younger and less educated works.  As [a] result, I show that a large fraction of the increase in residual wage inequality is a spurious consequence of the fact that the work force has grown older and more educated since the early 1980s.

That is Thomas Lemieux, from ""Increasing Wage Inequality," the lead article in the June 2006 American Economic Review.  Lemieux also dismisses the common view that information technology is the major cause of growing wage dispersion.

Since I am having a 12-course Cantonese meal tonight at Hong Kong Palace [Falls Church], those two sentences are unlikely to be topped later today.  Here are related papers by the author.


1. Economic models of computer security.

2. Alain Badiou, France’s hottest thinker.  I read two of his books and was not thrilled.

3. The most rewatched movies, as selected by critics and moviemakers.  Mine would be Bergman’s Persona, which is entering its eighth viewing.  Next would be The Empire Strikes Back.

4. Teaching economics through song lyrics.

5. Dan Klein’s Mere Libertarianism: Blending Hayek and Rothbard.

Literature and movie maps

What else do fans of Amelie Nothomb read?  The closer the names are together, the more likely both a person likes both authors. 

Enter your favorite author here.  David Foster Wallace, whom I dislike, is closest to Don Delillo.   Virginia Postrel is paired next to Ayn Rand and Arthur Conan Doyle.  Here is Milton Friedman.  No, I don’t know the details of their data but it involves asking visitors.

The parent company offers similar services for music and movies.  Fans of Eyes Wide Shut like these moviesTotal Recall is linked, sadly, to Animal House.

Go ahead, waste your time with this, I said it was OK.

How to Get People to Save More

Hal Varian covers this topic in today’s New York Times:  Excerpt:

As the authors put it, "Taken together, our results suggest that the
combination of a clear and understandable match for saving, easily
accessible savings vehicles, the opportunity to use part of an income
tax refund to save, and professional assistance could generate a
significant increase in contributions to retirement accounts, including
among middle- and low-income households."

Ben Casnocha blogs my Zurich talk

Here is his very useful account, including a good photo.  Excerpt:

Cowen made an interesting point about young people. He said America
empowers youth as influencers — college students sit around and listen
to music, start fads, build web sites, etc. They may not be "working"
per se, but they are contributing enormously to American popular
culture. Indeed, most of our popular culture is created by young
people, and this is the culture that is exported abroad. If a country
cares about the influence of its culture abroad, they should ask how
much power is given to youth. He noted that Latin America and Asia have
huge youth populations, making it prime for a lot of cultural influence
in this next generation.

Another question I discussed was why Switzerland has such an excellent culture of museums, opera, theatre, and architecture, but has done so poorly in exporting popular music and cinema.  The use of cities and cantons to fund the arts may be a central factor.  Intense Tiebout competition leads to quality local services but fewer national public goods (to the extent such cultural exports are public goods).

Ben is an MR reader who emailed me and tracked me down, here is his blog.

Nicolai Foss has kind words for me

Here is his post on economics and postmodernism.  Given the topic, how can I do better than to quote him quoting me?

Some performers manipulate the style of their product to shift the
incentives of critics to pay attention … Unclear authors, at least if
they have substance and depth, receive more attention from critics and
require more textual exegesis. Individual critics can establish their
own reputations by studying such a writer and by promoting one
interpretation of that writer’s work over another. These same critics
will support the inclusion of the writer in the canon to promote the
importance of their own criticism … In the economics literature,
enormous attention is devoted to the vagaries of John Maynard Keynes’
General Theory. The monetary writings of Milton Friedman or Irving
Fisher, far clearer and not inferior as practical guides to monetary
policy, do not receive equal attention from historians of thought.

That is from my 2000 What Price Fame?

Markets in everything: The ten weirdest items sold on ebay

Here is the list, but what about the atheist who asks to be paid to go to church?  My favorite:

8.  Item #248619068:  The Meaning of Life

Someone finally figured it out, and they put it up for sale on eBay.
Even with eight bids this incredible find didn’t fetch much, but it was
probably the best $3.26 the winning bidder ever spent.

Of course you can get it here for free…

The unit bias

Nominal variables matter, even when we are deciding how much to eat on our plates:

To test [the unit bias], the researchers left a bowl of M&M sweets in the
hallway of an apartment building with a sign that read “Eat Your Fill:
please use the spoon to serve yourself”. Some days they left a
tablespoon-sized scoop, other days they left a quartercup scoop that
was four times as big. Passers-by could obviously help themselves to as
little or as much as they wanted regardless of which spoon was
provided, but on average, 1.67 times more M&M’s were taken on the
days the big scoop was left compared with the tablespoon-sized scoop.

another experiment, the researchers found that, measured by weight,
significantly more pretzels were taken by passers-by when a
complimentary bowl of 60 whole pretzels was left in an apartment
building, compared with when a bowl of 120 half-pretzels was left. And
it was a similar story when either a bowl of 80 small Tootsie rolls (an
American snack bar) or a bowl of 20 large Tootsie rolls was left in an
office building.

In other words, throughout the study, people
took more food when the unit on offer was larger. “Consumption norms
promote both the tendency to complete eating a unit and the idea that a
single unit is the proper portion”, the researchers said.

Here is further information.  There is a lesson for macroeconomics in here, somewhere.

Trip thoughts

That was at the Hotel Real, the dish is called "Wiener Backhahn."  When we asked how to get to the restaurant, one Lichtensteiner (what do you call them in the English language?) said  "It is close.  Lichtenstein is very small.  (Pause)  But it is very beautiful."  Zurich has a high percentage of foreigners; it feels like 20 percent or more.  The Western side of the city is now "cool," and almost bohemian; eat at LaSalle.  The Swiss seem to have legalized prostitution.  The French-speaking Swiss generally favor joining the EU; the German speakers — 63% of the country — do not.  The German speakers also are more likely to speak good English than good French.  Crossing the border, German bookstores do not feature Freakonomics prominently; their economics sections are full of doom and gloom about Germany; are Levitt and Dubner too entertaining for them?  Some guy named Frank Schatzing has an 800-page German science fiction bestseller called Der Schwarm, just translated into English, is it any good?  Swiss food prices have gone through the roof.  I’ve experienced the $30 pizza, the $40 schnitzel, and the $42 breakfast, all good but none extraordinary.  Rural Switzerland now has plenty of Thai restaurants.  Switzerland was the first country where I first saw first-rate scenery, mountains, or for that matter cows.  Does this mean I still overrate the value of the Swiss landscape?  Paris was the first city where Natasha was able to go shopping and see the West; does she overrate it?  Do I overrate German bread and orange juice?  What was the first good blog you read?

The Nutty Professor

Here’s an amazing piece of the life of Timothy Leary from the NYTimes book review of Timothy Leary: A Biography.

…he finally went to jail, and was likely to be kept there for years
before he would be considered for parole. Characteristically, he
compared himself to "Christ . . . harassed by Pilate and Herod." In a
twist that could have occurred only in 1970, a consortium of drug
dealers paid the Weather Underground to spring Leary from the
California Men’s Colony at San Luis Obispo – he pulled himself along a
telephone cable over the fence, then was picked up by a car – and
transport him to Algeria. He duly issued a press statement written in
the voice of the Weathermen, the money line of which was: "To shoot a
genocidal robot policeman in the defense of life is a sacred act."

when he and his wife, Rosemary, arrived in Algiers, they found
themselves wards of the exiled Black Panther leader Eldridge Cleaver,
who was probably smarter than Leary, possibly crazier, and had little
use for him. As Leary acknowledged, rather shrewdly: "It was a new
experience for me to be dependent on a strong, variable, sexually
restless, charismatic leader who was insanely erratic. I usually played
that role myself."