Price controls in everything

by  Tyler Cowen in

Due to increasing demands for larger dowries, unemployment and housing
problems significant numbers of Yazidi youths are struggling to get
married in the Kurdistan Region today, raising fears of social unrest
among the small community.

It has been reported that some Yazidi families are now demanding a
dowry of between ten and thirty thousand US dollars to allow their
daughter to marry a fellow Yazidi.

But now, in an attempt to rectify the problem, the Spirit Council (the
Yazidi supreme religious council) has announced a new religious decree
stating that families cannot demand dowries higher than two thousand
dollars.

Here is the full story and I thank Lars Christian Hvidberg for the pointer.  The first-cut approach to incidence suggests that wealth will be redistributed away from attractive and otherwise marketable bride prospects.  In addition, good-looking men should now "marry better," relative to wealthy men, than in past times.

The price of anarchy in basketball

by  Tyler Cowen in

Brian Skinner writes:

Optimizing the performance of a basketball offense may be viewed as a network problem, wherein each play represents a "pathway" through which the ball and players may move from origin (the in-bounds pass) to goal (the basket). Effective field goal percentages from the resulting shot attempts can be used to characterize the efficiency of each pathway. Inspired by recent discussions of the "price of anarchy" in traffic networks, this paper makes a formal analogy between a basketball offense and a simplified traffic network. The analysis suggests that there may be a significant difference between taking the highest-percentage shot each time down the court and playing the most efficient possible game.

Here is some additional explanation.  I thank Michelle Dawson for the pointer.

A Swedish tragedy, in one short act

by  Tyler Cowen in

Wife: Let's send her the bag

Husband: That will take forever.

(Later)

Husband: Swedish postal delivery has been privatized.  [TC: More accurately, it is open to private competition.]

Wife: Where do we find a post office?

Aide: In the main train station

(Later)

Wife: Why isn't there a post office in the train station?

Different aide: It is gone.

Wife: Why are there no post offices around?

Wife (again): What do you do if you wish to mail something?

Yet another aide, in halting English, with a Middle Eastern accent: I do *not* wish…to do that.  I do not do it.

(Much later, in the basement of a department store, surround by lottery promotions and cigarette racks, husband and wife are mailing the aforementioned computer bag)

A fourth and different aide: This is the only post office in central Stockholm (TC: how can that be true?)

Husband: In the United States the postal service absorbs too many workers; Sweden represents efficiency.

Wife: If I cannot mail the bag, this is inefficiency.

Editor's note: The dialog with several other aides has been omitted due to publication constraints.

The addictions of fame and power

by  Tyler Cowen in

Matt Yglesias writes:

At the same time, I’ve come to be increasingly baffled by the high degree [of] cynicism and immorality
displayed in big-time politics. For example, Senators who genuinely do
believe that carbon dioxide emissions are contributing to a global
climate crisis seem to think nothing of nevertheless taking actions
that endanger the welfare of billions of people on the grounds that
acting otherwise would be politically problematic in their state. In
other words, they don’t want to do the right thing because their
self-interest points them toward doing something bad. But it’s
impossible to imagine these same Senators stabbing a homeless person in
a dark DC alley to steal his shoes. And what’s more, the entire
political class would be (rightly!) shocked and appalled by
the specter of a Senator murdering someone for personal gain. Yet it’s
actually taken for granted that “my selfish desires dictate that I do
x” constitutes a legitimate reason to do the wrong thing on important
legislation.

Making it all the odder, the level of self-interest at stake isn’t
all that high. Selling the public good down the river to bolster your
re-election chances isn’t like stealing a loaf of bread to feed your
starving children. The welfare rolls are hardly stocked with the names
of former members of congress. Indeed, it’s not even clear that voting
“the wrong way” poses particularly serious threats to one’s
re-election. But even if it did, one might assume that people who
bother to dedicating their lives to securing vast political power did
so because they actually wanted to accomplish something and get in the history books, perhaps, as one of the big heroes of their era.

I don't intend any particular point about cap and trade, but viewed more generally it's stunning how true this is.  (In fairness, note that the title of this post is my framing, not necessarily Matt's.)  Many people — especially those who become politicians — really do want fame and power and it is amazing what they will talk themselves into to get there and to stay there.  They don't even want fame in the sense of being recognized, in the longer run, for having done the right thing.  They want more personal influence and power now.

John Sutherland and 900 Victorian novelists

by  Tyler Cowen in

The appearance, after more than twenty years, of a second edition of John
Sutherland’s The Longman Companion to Victorian Fiction, is exciting news
for Victorian enthusiasts, whether students, academics or readers. For the
book represents a staggering achievement that is unlikely ever to be
equalled. That a single scholar, working un-assisted, should undertake to
synopsize 554 (now 560) novels and offer biographical accounts of 878 (now
900) novelists, as well as compiling entries on forty-seven magazines and
periodicals, twenty-six major illustrators and thirty-eight (now forty-one)
miscellaneous items (“Sandism”, “the Yellowback”, “The Nautical Novel”), is
a feat that beggars imagination, especially since much of the work was
completed before the availability of the internet and searchable digitized
texts. In his Preface to the first edition Sutherland stated that it took
him five years to prepare the Companion. In his Preface to the new edition
he confesses that it was “the work of a decade”.

Here is more and I thank The Browser for the pointer.

The culture that is French

by  Tyler Cowen in

Journalists accompanying Mr. Chatel and Hervé Novelli, the secretary of
state for commerce, on a trip to an Intermarché supermarket in
Villeneuve-le-Roi, southeast of Paris, became suspicious when the
aisles were suddenly filled with well-dressed, articulate women eager
to praise a government freeze on the price of some school supplies
before the new school year began.

Here is the article.  Here is information on French subsidies for school supplies.  The women, in fact, were paid to be there.

The evolution of sports rules

by  Tyler Cowen in

Gibbous, a loyal guy, asks:

The evolution of the rules of sports as a standards-setting process – – are the rules of basketball (or baseball, golf, football…) optimal in the same way that (arguably, at least) the QWERTY keyboard is?

I would put QWERTY aside, as that is a non-proprietary standard.  With a proprietary standard, I see a few reasons why the evolution of sports rules may be less than ideal. 

1. The rules may be geared toward the sale of merchandise, which implies an appeal to the young and to the least common denominator.  This is mostly an aesthetic objection, although you can tell a story about the purist being a neglected infra-marginal consumer.

2. The rules of the sport may be geared toward television advertising revenue, with the above argument repeated.

3. The league has market power and at some margin it will produce too few franchises; think of the league as selling franchise rights for money.  Some of this output restriction is quality control but some of it sheer monopolization.  (Allowing more franchises, at some margin, will loosen the meaning of the rules and conventions.  Imagine if way back when they had let NBA teams play the Harlem Globetrotters every now and then.  In what year would the fifth-best NBA team start beating them?)

4. If the league restricts the number of teams, other distortions will result, such as when the city of Memphis overbids for the right to have an NBA team.  Furthermore franchises will end up too far apart in geographic terms; bids are determined by producer surplus but societal welfare depends on consumer surplus too.

5. Sports leagues lead to less than optimal levels of player mobility; think monopsony power and the desire to redistribute rents to team owners.  Remember Curt Flood?

6. It is a good industrial organization question whether sports leagues will produce too many or too few games in a season, relative to a social optimum.  Figure it out!  I have an answer in mind but I'm not letting on about it.

China-Africa fact of the day

by  Tyler Cowen in

Based on official statistics, since 2003, the number of Africans in
Guangzhou has been growing at 30-40% annually. Based on a report in the
Guangzhou Daily, there might already be 100,000 in the community. They
come from Nigeria, Guinea, Cameroon, Liberia, and Mali. Amongst these,
Africa’s most populous country Nigeria claims first place.

They primarily live in village-districts in the city of Guangdong
(like Dongpu, Dengfeng Jie, Yongping Jie). They do their business in a
few large-scale China-Africa commerce malls.

Here is more information and I thank David Shor for the pointer.

An unwelcome thought

by  Tyler Cowen in

Are blogger attacks on the Republicans counterproductive at this point, at least from a "left" point of view?  Is not the relevant signal telling Obama he can safely move to the center without losing much support?  The blogger voices are in essence signaling that a broader public must stand behind these attacks, or that a broader public is being convinced by these attacks, and therefore that Obama need not fear defections and he can continue to ignore campaign promises.

An alternative scenario is that the attacks turn some of the still-undecideds against the Republicans and bring them into the Democratic camp.  Is that a relevant margin?

At this point, how many people say the following: "You know what honey, I was just reading those blogs this morning.  I used to like Sarah Palin but this time she has really gone over the edge.  I don't know about her any more.  Maybe we should think about voting Democratic."

How about: "Honey, they've called off the death panels.  We can support the mandates now."?

The funny thing is, a lot of people do think like that, I'm just not sure they are the ones reading blogs.

The general point is that if you are not a pivotal voter, announcing your true preferences and views does not necessarily help you get what you want.

Those who blog about primary challenges to Democrats from the left, or the need to deliver concrete results before the next election, may be serving up better rhetorical strategies.  But of course that is also less fun.

*Reflections on the Revolution in Europe*

by  Tyler Cowen in

I am surprised that Christopher Caldwell's Reflections on the Revolution in Europe: Immigration, Islam and the West has not sparked more blogospheric debate (with a few exceptions).  This is an intelligent, well-reasoned argument against allowing so many Muslims into Europe.  That said, while the author does ask how many traditional Italian restaurants would have to close without immigrant labor, he doesn't pursue this chain of reasoning very far.  What would happen to the Swiss tourist sector?  Nor will he admit that, financial crisis aside, Europe has never been richer, freer, and stronger.  Interestingly, he thinks that Latino immigration to the U.S. will go just fine, in part because Latinos are Christians.  I should add that Stockholm has many more immigrants than does Sicily and which is the place in greater future trouble?  It is interesting to see how many Somali (and other) immigrant women have adopted the gait and dress and demeanor of Swedish women. 

I did, however, in Palermo have an excellent Sri Lankan-Sicilian fusion meal, namely sardines in a spicy dosa.

The bottom line: I'd like to see a list of his short positions in asset markets.

What are health care co-ops?

by  Tyler Cowen in

Here is one quasi-answer:

But so far, cooperatives have been defined in the health-care debate
primarily in terms of what they are not: They would not be run by the
government.

That may make the cooperatives more politically palatable to
conservatives, as well as to some Democrats such as Conrad, who fear
that the public option may be a bridge too far. But it also presents
new challenges: Cooperatives would face potentially greater difficulty
getting off the ground and obtaining discounted rates from doctors and
hospitals, observers say.

Whether this would end up as a public plan under a different name, I cannot say and indeed it seems that maybe no one knows.  Ezra Klein tries to clear up some issues. 

I am in any case puzzled by the topic.  If, say, rescission is a major problem, why do not health insurance customers seek out health insurance mutuals or co-ops, both of which offer the possibility of greater consumer control and thus less opportunism from the supplier. 

Note that mutual banks were quite common before the rise of deposit insurance and mutual life insurance companies played major roles in the history of the industry.  So mutual and co-op forms can arise when the market agency problem is severe.  Why don't health insurance mutuals or co-ops take over the sector today for that matter?  But hey, wait, Blue Cross and Blue Shield do in fact have long histories as co-ops.

So what went wrong?  If you read the Mark Pauly quotation on p.2 of the first link, it seemed that health care customers did not in fact end up controlling the co-op (or mutual).  The managers ran the show in their own interest.  Maybe so, but then will health insurance customers do so much better controlling or influencing a government-run plan?

There is thus an unusual implicit claim on the table.  It runs something like this: decisive customers, with exit rights, cannot control a health insurance co-op.  Those same individuals, in their roles as voters, being non-decisive, and with fewer exit rights, can control a government-run health insurance system, co-op or not.

I can think of some models in which that claim is true, but I would not want to go to the mat for them. 

Here is someone else asking why we don't buy health insurance from mutuals.  It's an underexplored question.

Addendum: Mark Thoma makes some excellent related points.