New Zealand is not for sale, despite somebody in neighboring
Australia trying to offload the nation of 4 million to the highest
online bidder.

With a starting offer of just one cent, brisk
bidding for the prime chunk of South Pacific real estate quickly
boosted the price to 3,000 Australian dollars (US$2,330) before eBay
pulled the plug on the auction this week.

"Clearly New Zealand is
not for sale," eBay Australia spokesman Daniel Feiler told the New
Zealand Press Association, adding that 22 bids had been made before the
company acted.

"It is mostly household items we have for sale,
but there are the occasional quirky items put up," he added. "We have a
look at them and if they are OK we leave them, but if it is something
that can’t be sold, we take them off."

Here is the full story.

Wal-Mart has an incentive to keep its stores close to each other so it
can economize on shipping. For example, to make this simple, just think
about a delivery truck: If Wal-Mart stores are relatively close
together, one truck can make numerous shipments; however, if the stores
are spread out, you wouldn’t have that benefit. So, I think that the
main thing Wal-Mart is getting by having a dense network of stores is
to facilitate the logistics of deliveries.

There are other benefits, too. Opening new stores near existing stores
makes it easier to transfer experienced managers and other personnel to
the new stores. The company routinely emphasizes the importance of
instilling in its workers the “Wal-Mart culture.” It would be hard to
do this from scratch, opening up a new store 500 miles from any
existing stores.

…Wal-Mart waited to get to the plum locations until it could build out
its store network to reach them. It never gave up on density.                   

The placement of Wal-Mart stores has followed a spatial diffusion model.  K-Mart, in contrast, scattered its stores across the country.  Here is more.  Here is a video showing the spread of Wal-Mart, well worth watching and short.  It is the best single lesson in economic geography you will receive.  Thanks to http://kottke.org for the pointer.

The Exchange has listed a 0-100 contract on the possibility of a former Taliban Ambassador [Sayed R. Hashemi] being admitted to Yale University on a degree-granting program…on/before 31Aug06…

Here is a link to the article.   Thanks to Bo Cowgill for the pointer.

Let’s start with five:

1. Believe in comparative statics, the income effects will wash out in the aggregate.  (Larry Summers once taught me: "Economics is a theory of substitution effects but we live in a world of income effects.")

2. The model predicts well, don’t worry about the assumptions.  (As Paul Samuelson pointed out, don’t false assumptions, by their nature, involve a very large number of (sometimes implicit) false predictions?)

3. People may make mistakes when the stakes are small, but as they become more decisive over larger prizes, the irrationality goes away.  (Name any major politician or how about Tom Cruise on Oprah?)

4. IS-LM models make sense.

5. There are many firms in the sector, they must be price-takers.  (Does demand go to zero when your local Chinese restaurant raises prices by a penny?  Or for that matter by a dollar?)

Do you wish to suggest other lies in the comments?

Here is Guy Kawasaki with The Top Ten Lies of Engineers.  The Top Ten Lies of Entrepreneurs.  The Top Ten Lies of Venture Capitalists.  Thanks to Chris F. Masse for the idea and the pointer to Kawasaki.

Behavioral economic research has tended
to ignore the role of cultural differences in economic decision-making.
The authors suggest that a systematic bias affects existing behavioral
economic theory – cognitive biases are often assumed to be universal.
To examine how cultural background informs economic decision-making,
and to test framing effects, morality effects, and out-group effects in
a cross-cultural study, the authors conducted an experiment in the
United States and China. The experiment was designed to test cultural
and cognitive effects on a fundamental economic phenomenon – how people
estimate the financial values of objects over time.
 
Results
of the experiment demonstrated dramatic cultural differences in
financial value estimations, as well as on the influence of variables
such as framing effects. Chinese participants made higher object value
estimates than Americans did, even when adjusting for differing
national inflation rates. In addition, the results showed that
contextual information, such as framing, morality information, and
group membership affected judgments of financial values in complex
ways, particularly for Chinese participants. The results underscore the
importance of understanding the influence of cultural background on
economic decision-making. The authors discuss the results in the
context of behavioral law and economics, and propose that importing
cultural competence into behavioral models can lead to cognitive
debiasing, both temporary and permanent.

Here is the link to the paper.  Bravo I say.  Have you heard of the phenomenon of "running amok"?  It is not rational in anything but the tautological Misesian sense.  And it happens at much higher rates in nations where it is culturally central, such as Malaysia.  Thanks to www.politicaltheory.info for the pointer.