Some of the earliest and most popular prediction markets (per se) have been linked to elections, but predicting tax rates is much more to-the-point in terms of financial risk-sharing.  The
existence of such markets would also frame the operation of the
government in a way that would encourage fiscal responsibility, and
give dispersed interests some recourse against inefficient spending.

Here is the full post.  It is suggested that everyone wants to hedge against higher marginal rates, thereby making the market one-sided.  But doesn’t somebody benefit from taxes going up?  Thanks to Chris F. Masse for the pointer.

Researchers at the University of Leuven in Belgium asked men to play an ultimatum game, in which they split a certain amount of money between them. High-testosterone men drove the hardest bargain – unless they had previously viewed pictures of bikini-clad models, in which case they were more likely to accept a poorer deal.

The sight of flesh had less effect on the bargaining tactics of low-testosterone men. Click here to read the story.

Here is the full post, from Mahalanobis.  The accompanying photo is just barely (no pun intended) safe for work.

Here is the no subscription required permalink.  Excerpt:

Not all of neuro-economics uses brain scans. Andrew W. Lo, a professor
at the Sloan School of Management at the Massachusetts Institute of
Technology, applied polygraph-like techniques to securities traders to
show that anxiety and fear affect market behavior. Measuring eye
movements, which is easy and cheap, helps the researcher ascertain what
is on a subject’s mind. Other researchers have opened up monkey skulls
to measure individual neurons; monkey neurons fire in proportion to the
amount and probability of rewards. But do most economists care? Are
phrases like "nucleus accumbens" – referring to a subcortical nucleus
of the brain associated with reward – welcome in a profession caught up
in interest rates and money supply? Skeptics question whether
neuro-economics explains real-world phenomena…

The next step? Perhaps neuro-economics should turn its attention to
political economy. Do people use the same part of their brains to vote
as to trade? Is voting governed by fear, disgust or perhaps the desire
to gain something new and exciting?

A lunch with Robin is better than an email from him, but at least I can offer you the latter:

Reasonable economic cases can be made for allowing people to sell their organs, and for allowing people to buy the ability to immigrate into our country.  Cautious people avoid such proposals, because they push too many emotional buttons.  Mischievous folks like myself, however, wonder what happens if we push all the buttons at once: what if people could enter the country if they give up a kidney, or similarly valuable organ?  Would those who worry about the loyalty of immigrants who just pay cash to come here be reassured by the symbolic loyalty of giving up an organ?  Would those who fear that organ sellers are exploited be reassured by the huge value immigrants gain from living here?  Impish minds want to know.

Here it is; excerpt:

But while I agree with much of Florida’s substantive claims about the real, I end up with doubts about his prescriptions for urban planning. Florida makes the reasonable argument that as cities hinge on creative people, they need to attract creative people. So far, so good. Then he argues that this means attracting bohemian types who like funky, socially free areas with cool downtowns and lots of density. Wait a minute. Where does that come from? I know a lot of creative people. I’ve studied a lot of creative people. Most of them like what most well-off people like–big suburban lots with easy commutes by automobile and safe streets and good schools and low taxes. After all, there is plenty of evidence linking low taxes, sprawl and safety with growth. Plano, Texas was the most successful skilled city in the country in the 1990s (measured by population growth)–it’s not exactly a Bohemian paradise.