That is the title of a 2001 AER piece by Tasneem Chipty, here is the abstract:
I examine the effects of vertical integration between programming and distribution in the cable television industry. I assess the effects of ownership structure on program offerings, prices, and subscriptions, and I compare consumer welfare across integrated and unintegrated markets. The results of this analysis suggest two general conclusions. First, integrated operators tend to exclude rival program services, suggesting that certain program services cannot gain access to the distribution networks of vertically integrated cable system operators. Second, vertical integration does not harm, and may actually benefit, consumers because of the associated efficiency gains.
Out of date, yes, but still evidence that the proposed AT&T and Time-Warner merger is unlikely to damage the interests of consumers. When there is some market power at each step along the supply chain, vertical integration typically lowers margins and prices, thereby increasing consumer surplus.
For the pointer I thank John Chilton, who also points us to this review chapter by Paul Joskow. Here is a good James B. Stewart (NYT) piece on how antitrust thinking is moving backward these days, away from science more toward mood affiliation.
The deal may “feel wrong” to a lot of people, but for the regulators it ought not to be a big deal:
AT&T’s proposed acquisition of Time Warner…is considered “vertical” because the two companies largely do not compete against each other but operate on the same supply chain.
This is the bottom line:
“By standard antitrust metrics, this deal should be O.K. in Washington,” said Paul Gallant, a technology, media and telecommunications policy analyst with Cowen & Company. “But the Democratic Party is moving left, and if Clinton wins, this could become an early test for her ‘tougher on business’ rhetoric.”
The negative arguments are speculative or quite a stretch:
AT&T could make it more expensive for its competitors to gain access to Time Warner’s content or give preferential treatment to its own programming, said John Bergmayer, senior counsel at Public Knowledge, a digital rights advocacy group.
That is all from Leslie Picker and Cecilia Kang at the NYT. I would stress that “entertainment” and “content” are sectors where choices have exploded more or less without precedent. If the goal is to stop Time-Warner content from spreading to multiple sectors of the consumer media universe, I don’t see this one as a winner.
More generally, it is hard to see where the efficiencies from the deal are supposed to come from. About the recent Bayer and Monsanto proposed merger I wrote:
There is a well-known academic literature, dating to the early 1990s, showing that acquiring firms usually decline in value after tender offers, especially after the biggest deals. Mergers do not seem to make companies more valuable or efficient.
Why then do so many mergers and acquisitions happen? Well, some of them do pay off (Google buying YouTube), but also many managers engage in empire-building by increasing the size of their companies, even at the expense of the shareholders. Another possibility is what economists call “winner’s curse,” namely that the winner of an auction or contest or bidding war tends to be the person or institution most optimistic, and in fact overly optimistic, about the value at stake.
So from a social point of view, I doubt if there is so much at stake here.
…the NFL is seeing its ratings tumble in the same way that the Olympics, awards shows and other live events have, falling more than 10 percent for the first five weeks of the season compared with the first five weeks of last season. A continued slide, executives say, could pose an even bigger danger: If football can’t survive the new age of TV, what can?
Football’s traditional TV audience “is never going to be what it was again,” said Brian Hughes, a senior vice president at Magna Global, which tracks audience and advertising trends.
The explosion of modern entertainment options, offered on more devices and at any time, has splintered American audiences and sped TV’s decline, Hughes said. “Sports seemed to be immune from it — it was live, the last bastion of broadcast television. But [the world] has caught up to it now.”
That is from Drew Harwell, and much of the decline seems to be coming from cord-cutting, audience fragmentation, and also the presence of a somewhat controversial election season, which has drawn some viewers (not me) to cable news.
Amanda Knox on Netflix is a shorter version of Making a Murderer. Shorter because there isn’t much evidence that Knox had anything to do with the murder of her housemate. The documentary has extensive interviews with the lead investigator, a blowhard who likens himself to Sherlock Holmes but whose idea of deduction is that the murderer must have been a woman because the body was covered up. Surprisingly, the one clear sociopath isn’t the actual killer but the journalist whose lurid dispatches turned a tragic but ordinary murder into a witch hunt–a real Nightcrawler. Throw in some nationalism on both the Italian and U.S. sides and it’s not surprising that justice went awry. Trump has a cameo.
Luke Cage, also on Netflix, is the latest Marvel superhero story set in the same New York universe as Daredevil and Jessica Jones. Harlem is lovingly portrayed and the barbershop name dropping–Walter Mosley, Zora Neal Hurston, Crispus Attucks–and various basketball, jazz, and rap references adds color. The central conflict, however, is flat. Super-strong, well-nigh invulnerable Cage is not evenly-matched by drug dealer-businessman Cottonmouth. Despite a watchable performance by Mahershala Ali, Cottonmouth is no Kingpin. Vincent D’Onofrio’s Kingpin had Shakespearean intensity, depth, and the physical power to battle a super-hero. Indeed, one of the things that made Daredevil special was that you could see his exhaustion and pain in every battle. Similarly, Jessica Jones’s nemesis, Kilgrave, was one of the most horrific characters ever seen on television (in a great understated performance by David Tennant) and Kilgrave had Jones under his thumb for much of the season. Super heroes need super villains. To be sure, there is pickup in the second half of Luke Cage, but it takes a long time to develop.
Westworld (HBO)–this is the one that you must watch. The first two episodes have been remarkable. Every scene has something to see or to think about. Audience expectations are continually subverted. The cinematography is stunning.
One characters says “That’s what I love about this place all the secrets, all the little things I never noticed even after all these years. You know why this place beats the real world…in here every detail adds up to something.” Very meta. The shots also speak to the structure of the plot. Look at this amazing shot of the control building–levels of meaning.
It does not pass notice that it’s bright and shiny on top but the lower levels–the subconscious–are dark, moist, subterranean. We are told that WestWorld is a maze, a maze literally and figuratively, in our heads.
Westworld also challenges us with questions. Who are we? If we visited Westworld would we be the good guys or the bad guys? How many of us secretly harbor the desire to do evil and are restrained only by fear of punishment? What kind of Zimbardo experiment is Westworld?
Or are we the operators of Westworld who treat other people (?) as mere means and not as ends in themselves? Parts of Westworld look like an abattoir and from one perspective there are mass rapes.
Or are we the robots, living in a simulation, a reality of someone else’s construction? And what is going on with the corporation? The ultimate god?
The executive producer of Westworld is Jonathan Nolan, brother of Christopher, and writer or co-writer of Memento, The Prestige, The Dark Night and Interstellar.
We are only two episodes in but so far this is thrilling art in action.
Hat tip: Nicholas Tabarrok
Haven’t you noticed this?
I have a simple hypothesis. No matter what the media tells you their job is, the feature of media that actually draws viewer interest is how media stories either raise or lower particular individuals in status. (It’s a bit like “politics isn’t about policy.”) That’s even true for this blog, though of course that is never my direct intention.
But now you can see why people get so teed off at the media. The status ranking of individuals implied by a particular media source is never the same as yours, and often not even close. You hold more of a grudge from the status slights than you get a positive and memorable charge from the status agreements.
In essence, (some) media is insulting your own personal status rankings all the time. You might even say the media is insulting you. Indeed that is why other people enjoy those media sources, because they take pleasure in your status, and the status of your allies, being lowered. It’s like they get to throw a media pie in your face.
In return you resent the media.
A good rule of thumb is that if you resent the media “lots,” you are probably making a number of other emotional mistakes in your political thought.
Here is more from Erik Hurst discussing his new research:
On average, lower-skilled men in their 20s increased “leisure time” by about four hours per week between the early 2000s and 2015. All of us face the same time endowment, so if leisure time is increasing, something else is decreasing. The decline in time spent working facilitated the increase in leisure time for lower-skilled men. The way I measure leisure time is pretty broad; it includes participating in hobbies and hanging out with friends, exercising and watching TV, sleeping, playing games, reading, and so on.
Of that four-hours-per-week increase in leisure, three of those hours were spent playing video games! The average young, lower-skilled, nonemployed man in 2014 spent about two hours per day on video games. That is the average. Twenty-five percent reported playing at least three hours per day. About 10 percent reported playing for six hours per day. The life of these nonworking, lower-skilled young men looks like what my son wishes his life was like now: not in school, not at work, and lots of video games.
How do we know technology is causing the decline in employment for these young men? As of now, I don’t know for sure. But there are suggestive signs in the data that these young, low-skilled men are making some choice to stay home. If we go to surveys that track subjective well-being—surveys that ask people to assess their overall level of happiness—lower-skilled young men in 2014 reported being much happier on average than did lower-skilled men in the early 2000s. This increase in happiness is despite their employment rate falling by 10 percentage points and the increased propensity to be living in their parents’ basement.
It’s hard to distinguish “push” unemployment that is made more pleasant by video games from “pull” unemployment created by video games. I’m not even sure that distinction matters very much, at least if we aren’t talking about banning video games to increase employment. If elderly people started playing a lot of video games (as soon they will) would we worry that this was making retirement too much fun?
I’d be interested in knowing how much video games have displaced television. I watch more television than my kids, who play more video games. It’s not obvious that this is to their detriment.
Perhaps the issue is that video games like slot machines are so enticing that young people discount the future too heavily or don’t recognize the future cost of not being in the workforce. Maybe. Perhaps what we really need is a 3D, virtual reality, total sensory simulation, awesome video game that is so expensive that it encourages people to work.
The more some people go, the more other people want to go too. It is something to share and talk about. From the latest JPE, by
Duncan Sheppard Gilchrist (Wealthfront) and Emily Glassberg Sands (Coursera), here is the abstract:
We exploit the randomness of weather and the relationship between weather and moviegoing to quantify social spillovers in movie consumption. Instrumenting for early viewership with plausibly exogenous weather shocks captured in LASSO-chosen instruments, we find that shocks to opening weekend viewership are doubled over the following five weekends. Our estimated momentum arises almost exclusively at the local level, and we find no evidence that it varies with either ex post movie quality or the precision of ex ante information about movie quality, suggesting that the observed momentum is driven in part by a preference for shared experience, and not only by social learning.
Here are ungated copies, note it is fitting this research comes in part from Coursera. Also from the new JPE, if a Spanish region has a disproportionate share of lottery winners, it is more likely to opt for the incumbent.
This is from the Telegraph obit:
“However, not many, perhaps, were aware that the serial was commissioned with a serious political purpose: to popularise public choice theory. It is because it succeeded spectacularly that Jay received a knighthood in 1988.”
There are numerous interesting points in the obituary, for instance:
In Zimbabwe, Robert Mugabe was said to be a No 1 fan.
For the pointer I thank David Stein. And here is my earlier Conversation with Margalit Fox, senior obituary writer for The New York Times.
Man faces prison for scheme inspired by Seinfeld plot where he ‘brought 10,000 cans from out of state to take advantage of Michigan’s higher deposit rates’
That is the headline, here is the story via the excellent Mark Thorson. For the under-informed amongst us:
In Michigan you can get 10c for every bottle you give back – whereas places such as New York will only give you 5c.
But it is illegal for someone to knowingly bring them from somewhere else in order to get cash.
In early April, shortly after his team celebrated a postseason championship, a George Washington men’s basketball player visited a campus Title IX coordinator to log complaints about Coach Mike Lonergan. Lonergan, the player believed, had created an offensive, intolerable environment, evidenced in his mind — and in the minds of many of his teammates — by the spate of transfers during the coach’s five-year tenure.
There is much more to the story, here is just one bit, from a player:
“It was always weird. When he goes on those rants, it’s like, how do you react? How do you respond to something like that? Players kind of just stayed away from him. We knew every time it would be you and him, he would go on some kind of weird rant. We would just kind of stay away from him. He did a great job in terms of winning. Off the court, something weird is always going to come out.”
Can you imagine that response to either Bobby Knight or John Wooden? But at GW many players have left the school, refusing to play under the coach’s tutelage. He may yet be dismissed and possibly also sued for creating an abusive environment. In the old days, at the end the team wins, everyone bonds, and the coach is a hero. Or was it really ever like that? Maybe we have just stopped pretending.
That is via Peter Boettke. Via Mark Thorson, the Japanese just made their last VCR player.
This topic seems to have entered the news cycle. I am not sure how, so I thought I would add a few observations in the interests of clarity:
1. Under the most plausible “yes” scenario, Lucifer inhabits the corpus of us all, not just the Clinton family grandchildren included.
2. The correct answer is still “probably not.”
3. Is there a greater chance that Hillary Clinton is in fact Lucifer himself, rather than merely being possessed by him? (Would that not also be a new kind of transgender relation?) No, more likely she would have a Satanic familiar. In most equilibria, the number of familiars is greater than the number of Satans. Far greater.
4. Saul D. Alinsky once cited (Milton’s) Lucifer: “Lest we forget at least an over-the-shoulder acknowledgment to the very first radical: from all our legends, mythology, and history (and who is to know where mythology leaves off and history begins — or which is which), the first radical known to man who rebelled against the establishment and did it so effectively that he at least won his own kingdom — Lucifer.” Who does that sound like? Not Hillary.
5. I find it striking how many observers can so suddenly grow intolerant of religious sentiment, once such sentiment upsets the status relationships they are so intent in seeing through. It is considered politically incorrect and indeed downright unacceptable to mock those who believe the Deity is present in various religious ceremonies. Yet may not the Deity’s former premier angel also reside somewhere? Is it more plausible to believe the demoted angel haunts an obscure mold or grape than that he has carved out a small corner in the crook of the elbow of Hillary Clinton? What if someone held the latter to be true on grounds of religion and faith? Is the chance there simply too low compared to the chance of other specific religious beliefs being true? Where exactly is the probability threshold set for allowed mockery? How many other people would you need to have believing that with you before it would be “a religion” rather than…?
6. No sir, the separation of church and state will not save you here. If you indeed felt Lucifer inhabited the corpus of Hillary Clinton, it would be strange to stay silent about such ontology on the grounds of the First Amendment. So any potential ridiculousness of said belief must derive from epistemic grounds, and not its political implications or uses.
7. The Straussian interpretation of the Republican Convention is the correct one, which is perhaps one reason why Peter Thiel will be speaking there. They are not saying what they are saying, in fact they are saying “the world is going to hell, and many of those amongst us have been traitorously disloyal. That is why we scream out stupidities, debase ourselves, and court attention by waving our arms in ridiculous ways. We are a small church seeking to become larger.” Is that not how many smaller churches behave? Is that not how some of the early branches of the Christian church behaved? Did they have any influence? See also the remarks of Cass Sunstein.
8. You may or may not agree with the true message of the Convention, but if you think it is merely stupid you are, sooner or later, in for a big surprise.
That question came up briefly in my chat with Cass Sunstein, though we didn’t get much of a chance to address it. In the Star Trek world there is virtual reality, personal replicators, powerful weapons, and, it seems, a very high standard of living for most of humanity. The early portrayals of the planet Vulcan seem rather Spartan, but at least they might pass a basic needs test of sorts, plus there is always catch-up growth to hope for. The bad conditions seem largely reserved for those enslaved by the bad guys, originally the Klingons and Romulans, with those stories growing more complicated as the series proceeds.
In Star Wars, the early episodes show some very prosperous societies. Still, droids are abused, there is widespread slavery, lots of people seem to live at subsistence, and eventually much of the galaxy falls under the Jedi Reign of Terror.
Why the difference? Should we consult Acemoglu and Robinson? Or is it about economic geography? I can find think of a few factors differentiating the world of Star Wars from that of Star Trek:
1. The armed forces in Star Trek seem broadly representative of society. Compare Uhura, Chekhov, and Sulu to the Imperial Storm troopers.
2. Captains Kirk and Picard may be overly narcissistic, but they do not descend into true power madness, unlike various Sith leaders and corrupted Jedi Knights.
3. In Star Trek, any starship can lay waste to a planet, whereas in Star Wars there is a single, centralized Death Star and no way to oppose it, short of having the rebels try to blow it up. That seems to imply stronger checks and balances in the world of Star Trek. No single corrupt captain can easily take over the Federation, and so there are always opposing forces.
4. Star Trek embraces analytical egalitarianism, namely that all humans consider themselves part of the same broader species. There is no special group comparable to the Jedi or the Sith, with special powers or with special whatevers in their blood. There are various species of aliens, but they are identified as such, they are not in general going to win human elections, and furthermore humans are portrayed as a kind of galactic hegemon, a’ la the United States circa the postwar era.
5. The single individual is much more powerful in the world of Star Wars, due to Jedi and Sith powers, which seems to lower stability. In the Star Trek world, some of the biggest trouble comes from super-human Khan and his clan, but fortunately they are put down.
6. Star Trek replicators are sufficiently powerful it seems slavery is highly inefficient in that world. In Star Wars the underlying depreciation rate, as you would find it measured in a Solow model, seems to be higher. More forced labor is drafted into use to repair all of that wasting capital.
Addendum: Here is Cass on Star Wars vs. Star Trek.
Poking big holes in long-held assertions, Goldberg and his colleagues at Stanford and Yale universities analyzed millions of Yelp and Netflix reviews to reveal that people considered the most culturally adventurous are actually the most resistant to experiences perceived as “crossing the line.”
That is, those dubbed “cultural omnivores” — because they eat Thai for lunch, play bocce ball after work, and stream a French film that night — are the very ones opposed to mixing it up. No hummus on their hot dogs, forget about spaghetti Westerns, and do not mention Switched-On Bach. Those offerings are not considered culturally authentic. They are a hodgepodge to which these folks would likely wrinkle their collective noses — as they did in 1968 when Wendy (nee’ Walter) Carlos electrified J.S. Bach. Today’s cultural elites approve only if the experience is authentic, which means eating pigs’ feet at a Texas barbecue passes the test and slathering a taco with tahini does not.
“We find these people hate the most atypical offerings,” says Goldberg, an assistant professor of organizational behavior at Stanford Graduate School of Business. “They can pretend to be the most open, but it turns out they are not. By being multicultural, they are the most conservative and the most resistant to changes to the status quo.”
Or should we just call it good taste?
Looking for something to do this weekend in New York? Story, a concept shop that completely changes theme every few months, has relaunched this week as a Mr. Robot-themed space. In addition to being a retail shop selling an assortment of gadgets, accessories, and Mr. Robot-themed wares, there’s an “Evil Corp” ATM at the front of the store that will dispense real money (up to $50) if you figure out the four-digit code. The clues are hidden around the store, and we’re told they’ll probably change often.
Here is the full story, with many photos and an address. To think that they closed Tower Records and Borders for this…sigh.