The latest release of our principles of economics class covers Externalities, Costs and Profit Maximization, Competition and the Invisible Hand, and Monopoly.
I am especially fond of our video, Trading Pollution, which explains the economics of tradeable pollution permits. Tyler and I worked with the incredibly talented team at Tilapia Film for a long time on a montage involving jigsaw puzzle pieces that’s near the middle of the video. The montage is only a few seconds long but I think it’s a beautiful way of illustrating how the price system draws upon information that is dispersed across many minds. There is a lot of deep economics behind the visual metaphors.
Addendum: For those of you using our textbook, this video and others are available directly from the textbook (using QR codes) and also available with assessment in our course management system, Launchpad.
Why is the (global) state of subtitling and closed captioning so bad?
a/ Subtitling and closed captioning are extremely efficient ways of learning new languages, for example for immigrants wanting to learn the language of their new country.
b/ Furthermore video is now offered on phones, tablets, laptops, desktops, televisions… but very frequently these videos cannot be played with sound on (a phone on public transport, a laptop in public places, televisions in busy places like bars or shops,…).
c/ And most importantly of all, it is crucial for the deaf and hard of hearing.
So why is it so disappointingly bad? Is it just the price (lots of manual work still, despite assistive speech-to-text technologies)? Or don’t producers care?
It’s interesting to look at the fan-sub community, where they can be a labour of love. They are often considered far superior translations to the official ones. http://en.wikipedia.org/wiki/Fansub
You can sign up for rsvp or the live stream here, the chat with Peter Thiel is March 31, 2-3:30 p.m. EST, held at the Arlington campus of George Mason University. It is part of a new event series Conversations with Tyler.
The chat with Jeffrey Sachs is April 7, 3:30 to 5 p.m., again EST in Arlington. There will be more to come in the Fall.
I will host and talk with guests, but without formalities. I won’t ask “So tell us about your new book,” or any of the usual soporific chit-chatty questions. I will try to replicate the conversations I would have with these same individuals in a private setting, except that you all get to listen. That means launching into substance immediately and seeing how far the back and forth can be pushed. It also means asking questions that not everyone listening will understand and willing to let parts of the audience suffer in their confusion. I want these dialogues to be as smart as possible, based on the premise that each guest, no matter how renowned he or she may be, is nonetheless a radically underrated thinker.
The goal is to be never hostile or combative, but always probing. I’m aiming for the chat to be 1/3 me vs. 2/3 guest, more or less, but about the ideas and contributions of the guest most of all.
Mexican government officials were allowed to make casting decisions and changes to the script of the upcoming James Bond movie, after giving the film’s producers millions in financial incentives, according to a report based on emails leaked in the Sony hack.
The government reportedly offered the makers of the upcoming “Spectre,” directed by Sam Mendes, $14 million in exchange for four minutes of the film portraying the country in a positive light.
Emails released from the Sony hack, published by tax policy website Tax Analysis, show that the studio was concerned that the film’s costs had spiraled, to a gross budget of $300 million, making it one of the most expensive movies ever made. Executives pressured the filmmakers to make changes to the script that would keep the Mexican money coming in.
“You have done a great job in getting us the Mexican incentive,” wrote Jonathan Glickman, president of MGM’s motion picture group, in an email to the film’s producers. “Let’s continue to pursue whatever avenues we have available to maximize this incentive.”
…emails revealed that Mexico asked that the character of a Mexican governor, who was the target of an assassination, be replaced with an international leader, and that Mexican police be replaced with “some special police force” instead.
A further $6 million was said to have been achieved by means such as replacing a cage fighting scene with footage of Mexico’s popular Day of the Dead festivities, and highlighting Mexico City’s “modern” skyline, the Telegraph reported.
There is more here, via Fred Smalkin.
This Neill Blomkamp (“District 9”) movie has received only lukewarm reviews, but while highly imperfect it is more interesting than most critics seem to realize. The initial premise is that in a few years’ time South Africa resorts to AI-driven, robot policemen. I see the film as revolving around three key questions:
1. What will a robot be like, if he grows up under rather brutal conditions? This is first and foremost a movie about education, and it could have been written by John Gray. Don’t assume that people (robots) have an irrevocable tendency to support liberal values, at least not when the chips are down and they have been beaten up. The gang motive is both popular and enduring.
2. Can a society dependent on robots for law enforcement become/remain a liberal society? Or will the “arms race” between the law and the criminals result in brutality and a loss of liberty?
3. How robust is a robot society to the eventual possibility of human error and depravity?
Along the way there are references to Asimov, “Silent Running,” Blade Runner, Verhoeven of course, and other android sources. I can’t endorse every angle of the ending, or every character decision, but still I didn’t consider leaving this one.
Those questions are considered by Jeffrey Ely, Alexander Frankel, and Emir Kamenica in their new JPE paper “Suspense and Surprise.” Here is one to the point excerpt:
In the context of a mystery novel, these dynamics imply the following familiar plot structure. At each point in the book, the readers thinks that the weight of evidence suggests that the protagonist accused of murder is either guilty or innocent. But in any given chapter, there is a chance of a plot twist that reverses the reader’s beliefs. As the book continues along, plot twists become less likely but more dramatic.
In the context of sports, our results imply that most existing rules cannot be suspense-optimal. In soccer, for example, the probability that the leading team will win depends not only on the period of the game but also on whether it is a tight game or a blowout…
Optimal dynamics could be induced by the following set of rules. We declare the winner to be the last team to score. Moreover, scoring becomes more difficult as the game progresses (e.g., the goal shrinks over time). The former ensures that uncertainty declines over time while the latter generates a decreasing arrival rate of plot twists. (In this context, plot twists are lead changes.)
The largest conglomerates are still in the lead:
When we sum up the many networks owned by each media conglomerate, we can see how mighty these giants truly are. Netflix may be the largest “cable channel” by more than 100%, but it ranks 7th among cable television groups. Add in broadcast, and the delta is even greater. Not only is Disney more than three times as large as Netflix, but the OTT service makes up only 5% of total US video consumption per month. It may be that no single channel has the breadth of content and scale to be a serious Netflix competitor, but their parents certainly do.
Valentine’s Day is this week and what better way to celebrate than to appreciate the economics of roses!
A rose isn’t just a symbol of love it’s a symbol of global cooperation coordinated by the invisible hand. In The Price System, the just released section of our principles of microeconomics course, we feature two rose videos (along with videos on the great economic problem, speculation, prediction markets and more). Here’s the first; I, Rose. Tomorrow, A Price is a Signal Wrapped up in an Incentive. Enjoy.
When their new $70,000 princess-themed playroom is finished in March, Stella, 4 years old, and Presley, 2½, will have a faux gem-encrusted performance stage, a treehouse loft, and a mini-French cafe. A $20,000 custom carpet with colorful pathways will lead the girls to the various play areas.
“It’s going to be a pink explosion, with hearts and bows and crowns and tassels,” says their mother, Lindsay Dickhout, chief executive of a company that makes tanning products. The playroom will occupy about 1,500 square feet on the ground floor of the family’s 7,000-square foot home in Newport Beach, Calif.
Upstairs are the girls’ royal bedrooms, in which Stella sleeps in a $6,000 custom-made castle bed, and Presley’s pink-and-white striped wallpaper is illuminated by a crown-shaped chandelier.
Princesses have long enchanted little girls. But cultural flash points in recent years, such as Disney ’s blockbuster “Frozen” and Prince William’s royal wedding, have fueled demand for increasingly elaborate—and expensive—fantasy rooms.
Enjoying the spoils are interior designers who specialize in decorating kids’ ultimate bedrooms. Specialty furniture companies deal in lavish royal-boudoir accouterments, from $3,000 Cinderella lamps to $35,000 carriage-shaped beds. As the style becomes more popular, more mass-market companies have rolled out crown-shaped cornices, tulle canopies, and Rococo children’s furniture.
The full Katy McLaughlin WSJ article is here, the photos are superb. For the pointer I thank Samir Varma.
1. An impressive display of, um…Big Data (pdf), addressing how suppliers discriminate against customers in Singapore. There is also an NBER version, but I don’t see it on their site at this moment.
American Sniper is one of the best anti-war movies I have seen, ever. But it shows the sniper-assassin, and his killing, to be sexy, and to be regarded as sexy by women, while the rest of war is dull and stupid. (Even the two enemy snipers are quite attractive and fantastic figures, and there is a deliberate parallel between the family life of the Syrian sniper and the American protagonist. The klutziness of the non-assassin soldiers limited how many African-Americans and Hispanics they were willing to cast in those roles, as it is easiest to make white guys look crass in this way without causing offense.) By making the attractions of war palpable, this film disturbs and confuses people and also occasions some of the worst critical reviews I have read. It also, by understanding and then dissecting the attractions of blood lust, becomes a quite convincing anti-war movie, if you doubt this spend a few months studying The Iliad. (By the way, Clint Eastwood, the director and producer, describes the movie as anti-war.) The murder scenes create an almost unbearable tension, the sandstorm is a metaphor for our collective fog, and they had the stones to opt for the emotional overkill of four rather than just three tours of duty. Iraq is presented as a hopeless wasteland with nothing of value or relevance to the United States, and at the end of the story America proves its own worst enemy. It is not clear who ever gets over having killed and fought in a war (can anything else be so gripping?…neither family life nor sex…), even when appearances suggest a kind of normality has returned. The generational cycle is in any case replenished. I say A or A+, both as a movie and as a Rorschach test.
Two Days, One Night has some of the worst economics I have seen in a movie, ever. It would be brilliant as a kind of Randian (or for that matter Keynesian) meta-critique of the screwed up nature of Belgian labor markets and social norms, and most of all a critique of the inability of the Belgian intelligentsia to understand this, except it is not. It is meant as a straight-up plea for sympathy for the victim and as such it fails miserably, even though as a movie it embodies reasonably good production values. Everything in the workplace of this solar power company is zero-sum across the workers and we never see why. The protagonist campaigns to get her job back, but never asks or even considers how she might improve her productivity or attitude, asking only on the basis of need. (And she is turned down only on the basis of need.) At one point her employer states the zero marginal product hypothesis quite precisely, something like “when you took time off, we saw that sixteen people could do the work of seventeen.” She never asks if there might be some other way she could contribute — but she does need the money — nor does the notion of a better job match somewhere else rear its head. The depictions of financial hardship confuse wealth and income, basic survival and discretionary spending. The rave reviews this movie has received represent yet another Rorschach test and one which virtually every commentator seems to have failed.
Very sadly Ernie Banks — the baseball player for you foreigners out there — has passed away.
Oddly, I have taken to quoting him lately. If you are going out to eat with a small group, I recommend two stops. No, don’t eat any more food than usual, but distribute your meal across two restaurants. Have a few appetizers in one, and then leave and move on to another. (This is easiest to do in Eden Center, with its wide selection of small-dish Vietnamese eateries, but other methods will work.) Of course you must sequence your meals properly, the Greek eggplant must become before the Sichuan noodles, not vice versa.
This approach will improve the conversation at your table, if only by breaking up the original seating plan. It also makes you more aware and more appreciative of what you are eating.
If you are going out to a movie, see two. There is a fixed cost of attending, whether in terms of the traffic, the babysitter, or simply the will to spend time away from Facebook. “Let’s Play Two.”
I have the impression that consumers “do fewer doubleheaders” than when I was growing up, I am not sure why. Perhaps we have grown too impatient.
Banks’s obituary described him as “an unconquerable optimist whose sunny disposition never dimmed in 19 seasons with the perennially stumbling Chicago Cubs…”
Here are other quotations from Ernie Banks. He said “The only way to prove you are a good sport is to lose.”
The Daily Beast, Business Insider and The Washington Post all argue that leaked information about Jennifer Lawrence’s pay on American Hustle indicates gender discrimination. Here’s the Washington Post:
If Jennifer Lawrence doesn’t get paid as much as her male colleagues for the same work, ordinary women don’t stand a chance.
Sony’s hacked e-mails have revealed a troubling truth — that even the wealthiest and most powerful women among us are burdened by the ever-present gender pay gap.
The picture these articles present is one of poor, little Jenny Lawrence being taken advantage of by powerful, male studio heads who are laughing all the way to the bank. Time for a reality check.
When it comes to business, Jennifer Lawrence isn’t a woman she is a multi-million dollar enterprise. Lawrence Enterprises is run not by Jennifer alone but also by a bevy of managers, agents, publicists and lawyers. If Lawrence is underpaid each of these people (quite a few of them men, by the way) are also underpaid. In particular, Lawrence is repped by CAA of which the WSJ recently wrote:
Within the entertainment industry, the glass-and-steel headquarters of Creative Artists Agency LLC is called the “Death Star,” a reference to its occupants’ reputation as cold-hearted Hollywood power brokers.
Do you think the cold-hearted Hollywood power brokers of CAA are leaving money on the table? No effing way. Which is one reason why Jennifer Lawrence is number 12 on Forbes Celebrity 100 list, coming in just below Steven Spielberg. By the way, 5 of the top 10 on the Celebrity 100 are women and number 1 on that list? Beyonce.
Scott Sumner asks a version of that question:
But here’s what I don’t get. If America really is this weak and cowardly, then why can’t ISIS easily defeat us? They could phone in threats against movie theaters just as easily as the North Koreans can. And there must be 100 times as many Hollywood films that offend ISIS sensibilities as there are that offend Kim. Recall that women get stoned to death in ISIS-controlled areas for things like wearing a miniskirt. Then consider Hollywood films, which often show Arab terrorists as villains. So why doesn’t ISIS copy North Korea? Why does ISIS let us insult them? I don’t get it.
There is more from the Scott on the question here. This is hardly my area, but here are a few observations:
1. The United States will permit all kinds of mini-outrages against us, provided they are not seen as precedents. If we were viewed as exploitable at this margin, our reaction, from both the government and private citizens, would be quite different. In the meantime, pretending that North Korea is a fly to the American elephant may be an optimal response/non-response. When Obama told Sony it made a mistake by pulling the film, that is exactly what he was doing, namely minimizing the significance of the event on purpose. He wasn’t trying to scold Sony or even to defend free speech.
2. Often groups such as ISIS are much more offended by what “their own” women do than by what “outsiders” do. They may even welcome the existence of a certain amount of Western and also Hollywood depravity, to aid product differentiation. Additionally, don’t forget that some of the 9-11 terrorists seemed to enjoy strip clubs and the like. Their motivations are not always strictly pious.
3. We don’t have a good understanding of why terrorists don’t attack more than they do. Perhaps terror attacks can be viewed as belonging to two groups: a) the more or less replicable (Sri Lankan and Palestinian suicide bombings), which are allocated by some set of calculating authorities, and b) the “one-off,” which are governed by a kind of multiplicative formula, under which many things have to go the right way for an attack to happen at all. 9-11 is probably an example here, but without a fixed infrastructure for providing training and motivation and coordination, most terrorists aren’t actually that well organized and they can’t pull much off. Read Diego Gambetta on 9-11. Now that U.S. troops are (mostly) out of Iraq, the replicable attacks aren’t there any more either.
4. It remains possible that the U.S. still will retaliate against North Korea, or perhaps already has retaliated in a non-public manner. It is also possible we have let news of such retaliation or pending retaliation leak to ISIS and other groups in some fashion.
And a final point: in the MR comments section Boonton wrote:
I think this illustrates a difference in perception between North Korea and, say, Al Qaeda. If Al Qaeda was offended by some movie (say the last Batman movie which featured some type of Middle Eastern prison that was nonetheless within walking distance of Gotham city), people would be up in arms about all theaters pulling the movie. Yet not so much North Korea, why?
Al Qaeda is recognized as having an actual agenda is is assumed to be a somewhat rational agent. Hence most of us will give credit to the anti-appeasement argument with them. If we pull one movie they will keep making demands.
North Korea, in contrast, is perceived as an irrational state lead by a child-man dictator. In other words, most in the west see it as essentially an entire nation that is literally mentally ill. We are willing to indulge them a bit because we are not quite sure how ill they really are and just like a deranged person may try to stab you over a napkin on the ground, this is the type of state that may start a nuclear war over a Seth Rogan movie.
Is this perception correct? Is North Korea not just mentally ill ‘on the ground’ but also at the top? Is the inner circle populated by cold rationalists cynically exploiting propaganda to control the masses or have they actually drunk the most Kool-Aid of the entire bunch?!
“Both” is a possible answer of course.
We have learned in testing that moviegoers respond favorably to Kim Jong-Un when he is seen as more of a recluse who can be charming at times as opposed to a person who is simply a dangerous dictator.