Kiss me, I’m vaccinated
I just had my flu shot. Please send your checks to my George Mason address.
People who have the flu spread the virus so getting a flu shot not only reduces the probability that I will get the flu it reduces the probability that you will get the flu. In the language of economics the flu shot creates an external benefit, a benefit to other people not captured by the person who paid the costs of getting the shot. The external benefits of a flu shot can be quite large. Under some conditions each person who is vaccinated reduces the expected number of other people who get the flu by 1.5.
Since a large fraction of the benefits of the flu shot, perhaps even a majority of the benefits, go to other people and not to the person paying the costs, the number of people who get a flu shot in the United States is well below the efficient level. I only got the shot because, as you well know, I’m altruistic. I care about you. But do send your checks, that will help.
In lieu of a check I’m thinking of having some buttons made up to encourage people to get their shot. Here are some possible slogans:
- Kiss me, I’m vaccinated.
- Take one for the herd!
- Get a flu shot. The life you save may not be your own.
Madison Avenue here I come!
Of course, we know from the Coase Theorem that there is an alternative approach. We could charge people who do not get their flu shots. (Thus, if you haven’t had a shot you must still must send me a check.) Or to reduce transaction costs we could fine people who get the flu. I kind of like that last one. (But what to do about the 36,000 a year who die from the flu – charge their estates?)
What do you think? Leave your suggestions/slogans for how to encourage getting a flu shot in the comments.
Why are Hollywood Unions Powerful?
Glen Whitman asks a good question, Why are unions so powerful in the entertainment industry when unions
are generally weak and in decline in most other sectors of the economy? (Tyler asked the same question several years ago.)
I went to the family expert, my brother the movie producer and he had this to say:
…unlike in most other unionized industries, it’s the INDIVIDUAL members of the unions in the entertainment industry that the management / owners want to work with. For example, Tom Cruise is a member of SAG, (I use him as an obvious example, but every other known actor is as well) and if the studios and producers want to make a film with Mr Cruise, and we all do, we have to come to terms with SAG. Similarly, Steven Spielberg is a member of the DGA, same issue. Though writers are not household names, it’s the same issue, there are specific individuals who the studios want to be writing their TV shows and screenplays. It doesn’t matter if Joe or John or Mary is stacking the boxes, flipping the burgers or ringing the cash registers so management can easily hire a non-union member to do the same job, in the film business we need to work with specific individuals who happen to be union members. Thus the power of those (comparatively) few empowers them all.
Combine with a bit of Hollywood leftism and the fact that the big names don’t lose much from unions and you have a very powerful cartel. About the only way to break the cartel would be to turn the big names into owners – this has been done a few times but the stars earn so much anyway that even then the incentives to deviate are small. You Tube can give is a
parade of amateurs but as soon as the amateurs become stars this
model suggests that they will be co-opted into the union framework. Like my brother, I don’t see the power of Hollywood unions ending anytime soon.
Markets in Everything: Cheat Offsetting
Building on the thriving carbon offset industry, an innovative British firm, Cheat Neutral, now offers cheat offsetting:
At Cheatneutral, we believe that we should all try to reduce the
amount we cheat on our partners, but we also realise that
fidelity isn’t always possible.That’s why we help you neutralise your cheating. Your actions
are offset by a global network of fidelity, developed by us.
By paying Cheatneutral, you’re funding monogamy-boosting offset
projects – we simply invest the money you give us in monogamous,
faithful or just plain single people, to encourage them to stay that way.
Many people have already successfully used Cheat Neutral:
David cheated on his partner of ten years, Sebastian, with a
younger man. He described for us what happened:"Seb was so angry with me, I felt really bad about what I’d done.
I came to Cheatneutral to offset the side effects of my cheating,
and later on, Seb said the only reason he could forgive me was
because I’d offset my cheating with Cheatneutral. Thanks to Cheatneutral,
we’re still together, I can feel good about my cheating, and
I’ve helped to reduce global cheating as well! If I do cheat on
Seb again, I’ll definitely be calling Cheatneutral."
Hat tip to David Zetland’s new blog Sex, Drugs & Water Utilities.
Remember, remember the 5th of November
Ron Paul has now passed Fred Thompson in the probability of winning the Republican nomination. According to Intrade, Paul has a probability of winning the nomination of 8.8%. (Guiliani (42.0%) and Romney (27.6%) are first and second.)
In closely related news, Paul raised $4.2 million yesterday. V.
Thanks to Barry Klein and Tim Groseclose for the tips.
Kottke interview of Cory Doctorow
Joel Turnipseed blogging at Kottke asks, why give away books for free? Cory responds:
…we live in a century in which copying is only going to get easier. It’s the 21st
century, there’s not going to be a year in which it’s harder to copy than this
year; there’s not going to be a day in which it’s harder to copy than this day….And so, if
your business model and your aesthetic effect in your literature and your work
is intended not to be copied, you’re fundamentally not making art for the 21st
century. It might be quaint, it might be interesting, but it’s not particularly
contemporary to produce art that demands these constraints from a bygone era….So that’s the artistic reason. Finally, there’s the ethical reason. And the
ethical reason is that the alternative is that we chide, criminalize, sue, damn
our readers for doing what readers have always done, which is sharing books they
love–only now they’re doing it electronically. You know, there’s no solution
that arises from telling people to stop using computers in the way that
computers were intended to be used. They’re copying machines. So telling the
audience for art, telling 70 million American file-sharers that they’re all
crooks, and none of them have the right to due process, none of them have the
right to privacy, we need to wire-tap all of them, we need to shut down their
network connections without notice in order to preserve the anti-copying
business model: that’s a deeply unethical position. It puts us in a world in
which we are criminalizing average people for participating in their
culture.
The economics have yet to be worked out but I think Cory has got the aesthetics and the ethics right. Lots more of interest.
George Bush knows how to keep a meeting short
I used to think that short meetings were best. Clearly, I confused the private with the social optimum.
For bonus points compare the picture with Tyler’s discussion of meetings. How many items can you spot?
Meetings are not always about the efficient exchange of information, or
discovering a new idea. Meetings can be about displays of power,
signaling that a coalition is in place, wearing down an opponent,
staging "theater" to make someone feel better, giving key players the
feeling of being insiders, transmitting information about status, or
simply marking time until something better happens. It’s one thing to
hate meetings. But before you can improve them, make sure you know what
meetings are all about.
Hat tip to J-Walk Blog for the picture.
Cheap Talk Incentive
Mayor Michael R. Bloomberg
said yesterday that he was considering a proposal to give some city
students free cellphones and to reward high performance with free
airtime, but emphasized that he had no intention of lifting the ban on
cellphones in the schools.“It’s something we’ll take a look at,” the mayor said of the proposal
being pushed by Roland G. Fryer, a Harvard economist who joined the
Education Department this year as chief equality officer.
Rorschach Economics
Gregor Smith of Queen’s University has discovered an amazing new relationship, Japan’s Phillips Curve Looks Like Japan. John Palmer of EclectEcon believes that the result may be systematic as he has discovered that Canada’s Phillip’s Curve looks like Canada.
Obviously these people are crazy. Smith and Palmer clearly do not understand Marshallian
macroeconomics – everyone knows that the Phillip’s Curve looks like this country.
Rational Expectations
I can report that the sugar high in children begins long before the sugar hits the bloodstream.
Borjas on Indoctrination
According to FIRE, The Foundation for Individual Rights in Education:
The University of Delaware subjects students in its residence halls to
a shocking program of ideological reeducation that is referred to in
the university’s own materials as a “treatment” for students’ incorrect
attitudes and beliefs….The university’s views are forced on students through a
comprehensive manipulation of the residence hall environment, from
mandatory training sessions to “sustainability” door decorations.
Students living in the university’s eight housing complexes are
required to attend training sessions, floor meetings, and one-on-one
meetings with their Resident Assistants (RAs). The RAs who facilitate
these meetings have received their own intensive training from the university, including a “diversity facilitation training” session at which RAs were taught, among other things,
that “[a] racist is one who is both privileged and socialized on the
basis of race by a white supremacist (racist) system. The term applies
to all white people (i.e., people of European descent) living in the
United States, regardless of class, gender, religion, culture or
sexuality.”
George Borjas writes:
Why am I super-sensitive to this? Because as a young boy I myself went through a one-year course in ideological reorientation. I attended an elite elementary Catholic school in Havana. Castro took over, the Catholic school was shut down, and I got transferred to a revolutionary school where the entire day was spent teaching Marxist-Leninist ideology. Luckily, this lasted only a year and I continued my education in Miami (where the entire school day was instead spent talking about the upcoming football game). I am certain that the blind zealotry that I saw in the young teacher’s eyes that year turned me off from that particular way of viewing the world for the rest of my life. One can only hope that many of the students forced to attend the re-education programs at Delaware and other universities react in the same way.
I’d be interested to hear from anyone with first hand experience of the University of Delaware program.
Assorted Links
- The
Impact of Milton Friedman on Modern Monetary Economics. A nice review by Edward Nelson and Anna Schwartz of Friedman’s thought and influence over monetary policy that also, in the author’s words, sets the record straight on Paul Krugman’s ‘Who was Milton Friedman.’
- The world may be getting smaller but big Americans are sinking the boats at Disney’s It’s a Small World.
- The Ayn Rand Lexicon is now online.
Using Incentives to Solve the Israeli-Palestinian Conflict
The very interesting Bruce Bueno de Mesquita has a good analysis of the Israeli-Palestinian conflict and a clever suggestion for moving forward:
“In my view, it is a mistake to look for strategies that build
mutual trust because it ain’t going to happen. Neither side has any
reason to trust the other, for good reason,” he says. “Land for peace
is an inherently flawed concept because it has a fundamental commitment
problem. If I give you land on your promise of peace in the future,
after you have the land, as the Israelis well know, it is very costly
to take it back if you renege. You have an incentive to say, ‘You made
a good step, it’s a gesture in the right direction, but I thought you
were giving me more than this. I can’t give you peace just for this,
it’s not enough.’ Conversely, if we have peace for land–you disarm, put
down your weapons, and get rid of the threats to me and I will then
give you the land–the reverse is true: I have no commitment to follow
through. Once you’ve laid down your weapons, you have no threat.”Bueno de Mesquita’s answer to this dilemma, which he discussed with
the former Israeli prime minister and recently elected Labor leader
Ehud Barak, is a formula that guarantees mutual incentives to
cooperate. “In a peaceful world, what do the Palestinians anticipate
will be their main source of economic viability? Tourism. This is what
their own documents say. And, of course, the Israelis make a lot of
money from tourism, and that revenue is very easy to track. As a
starting point requiring no trust, no mutual cooperation, I would
suggest that all tourist revenue be [divided by] a fixed formula based
on the current population of the region, which is roughly 40 percent
Palestinian, 60 percent Israeli. The money would go automatically to
each side. Now, when there is violence, tourists don’t come. So the
tourist revenue is automatically responsive to the level of violence on
either side for both sides. You have an accounting firm that both sides
agree to, you let the U.N. do it, whatever. It’s completely
self-enforcing, it requires no cooperation except the initial agreement
by the Israelis that they are going to turn this part of the revenue
over, on a fixed formula based on population, to some international
agency, and that’s that.”
The article cited has a lot more on Bueno de Mesquita and the remarkable series of accurate predictions that he has made using rational choice modeling. See also this piece from Science News, The Mathematical Fortune Teller.
Big news on pharmaceutical prizes
Senator Bernie Sanders, the first self-described socialist ever to be elected to the Senate, has introduced a bill that I might actually sign on to, The Medical Innovation Prize Fund Act of 2007. In essence, the prize fund would pay pharmaceutical companies to release their patent rights to the public domain.
The level of funding for medical innovation prizes would start at
$80 billion per year, and increase with the growth in GDP….Under the Sanders
proposal, the patent system would still be used, but the patent owners
would no longer be given monopoly rights to control the manufacturing
and sale of products. Instead, patents would be used to establish who
"owns" the right to the cash rewards given for new inventions. Drugs
developed without patents would also be eligible for the prizes.
I like that the funding amounts are serious and would be available to non-patented products (innovations without property rights are underfunded). I worry about corruption and funding directed according to political pressure. I would be reassured if the system were clearly voluntary – that is, pharmaceutical manufacturers should have the option of the patent or the prize. Clearly an option will increase profits for the pharmaceutical firms but medical innovation has many beneficial returns not captured by the pharmaceutical companies so I am not worried about bigger transfers.
Most importantly, a prize fund would make clear the tradeoff between pharmaceutical revenues and R&D and it would reduce the pressure for price controls which I think are a serious threat to future medical innovation.
Thanks to Ben Krohmal for the pointer.
Satanists Unite!
Here’s a mini-review of my brother’s movie Weirdsville.
Weirdsville – a
dark and devilishly funny comedy about a pair of junkie crooks who
can’t seem to catch a break to save their lives. Throw in a couple
Satan worshipers, a band of vigilante little people and a pair of
curling stone wielding drug dealers and things get, well – considerably
weirder. The film is littered with fantastic offbeat and unexpected
moments that keep the laughs rolling. Moyle meanwhile, adds his
signature rock n’ roll flare and gives the film a cold, gritty feel
that keeps you on just enough of an edge. Definitely a trip worth
taking.
So who is complaining? The Satanists! Here is one email:
I would just like to voice my opinion and state that I do NOT appreciate the way you portray Satanism in the least. Using the same-old watered down mass-media version or not, it still tends to give us a bad name. I am not asking you to remove this movie or change anything on it, just think about it.
By the way, long-time readers of Marginal Revolution may be wondering whether the Satan worshipers in Weirdsville are a commentary on my brother’s previous blockbuster.
RAND Hits Back
Joseph Newhouse and the other RAND researchers have responded to Nyman’s paper arguing that attrition bias biased their results. The RAND researchers were aware of these issues and in fact designed the experiment to avoid incentives for non-random attrition. Most importantly, the basic RAND findings have now been replicated in many other studies (smaller and not always experiments but the results are solid). I call it a knockout for RAND.
It’s a credit to the many insightful commentators on Marginal Revolution that many of these points were made already in the comments on my original post.
Thanks to Jason Furman for the pointer.