Results for “my favorite things”
236 found

Is procrastination rational?

Isaac Sorkin and Henry Swift give us some good reasons to procrastinate:

Though work-smoothing may sound appealing, we all know that it never happens to the ideal degree.  Part of this is certainly due to decision-making myopia.  But is it possible that there is also a rational component to our procrastination habits?  There are at least three reasons why this might be the case.  The first is that there are fixed costs to doing homework.  Suppose that in order to do homework you have to run to Kohlberg for a mocha latté…and check your favorite five media outlets as a preemptive distraction.  In that case, it makes sense to have longer homework sessions in order to reduce the total number of sessions (and number of fixed costs to pay).  Thus, putting things off in order to concentrate the work for a paper in one epic block means that you don’t have to waste time setting up to write again and again.

The second reason is that there may be decreasing marginal costs to doing homework.  Suppose that the second hour of doing homework is much easier than the first, and the third easier yet and so on.  You get in the homework zone.  Then it makes sense to make your homework sessions as long as possible in order to take advantage of these returns to scale in doing homework…

The third reason is that there might be “thick-market externalities” in doing homework.  The idea is that if everyone else is doing the same thing that you are, it gets easier and more enjoyable.  If all of your friends are procrastinating at the same time, then the opportunity cost of doing work is that you miss an excruciatingly funny episode of “Curb Your Enthusiasm”…  Similarly, when everyone is doing work, the opportunity cost of work is very low.  After all, “Curb” is far less excruciatingly funny when watched alone.  So it makes sense to do work when your friends do work, and avoid work when your friends avoid work.

Perhaps they should have been taxed for having written this.  Fortunately I am a reverse procrastinator and I have no problems with these issues.  It is procrastination which I put off, not work.

Markets in everything: The ten weirdest items sold on ebay

Here is the list, but what about the atheist who asks to be paid to go to church?  My favorite:

8.  Item #248619068:  The Meaning of Life

Someone finally figured it out, and they put it up for sale on eBay.
Even with eight bids this incredible find didn’t fetch much, but it was
probably the best $3.26 the winning bidder ever spent.

Of course you can get it here for free…

Why economists should feel conflicted about the Grokster ruling

…it is difficult to judge how a given level of illegal downloads will affect economic efficiency. First, the quantity of music sold in a given year is not a very accurate indicator of how much value consumers receive from music. Fans commonly experiment by buying a number of CDs, only a few of which pay off and become favorites. Many or most of the products bought are quickly regarded as disappointments and discarded; in this regard the market for CDs differs from the market for refrigerators. Whether consumers like what they bought is at least as important as the absolute size of the industry.

The Internet already helps music companies track fan demands. When fans sample on-line music, usually they can figure out whether or not they would like the entire CD. Many of these fans still buy the CD, to get better sound, to have the music in more convenient form, to receive the packaging, and so on, as discussed above. These fans usually will be happy with their purchases. As a result, it will be harder for the music companies to issue low quality CDs. Of course this tighter monitoring of quality may cause the number of new issues to decline. In nominal terms the industry will shrink, but at the same time it may produce more real value for consumers. For this reason, a shrinking music industry, as measured in terms of either dollars or new releases, can be desirable from an economic point of view.

Evaluating the efficiency consequences of illegal downloads is difficult for a more fundamental reason. Most generally, we do not understand the demand for music very well. We do not understand what most fans want from their music. Just as book buyers are not always readers, the music market is not always about the tunes. Sometimes it is about symbolic values.

It is a mystery why fans spend almost all of their music money on product of very recent vintage. Until we untangle this puzzle, and we have not yet, we will not understand how Internet music is likely to affect consumer welfare.

Most consumers are not interested in buying much music from 1950, regardless of its objective quality in the eyes of the critic. Music from 1650 is even less popular. Few people search the history of music for “the best recordings” and focus their buying on those. Rather, in any given year the most recent recordings dominate the charts. At a typical moment, all of the Billboard Top 40 singles, or albums, come from the last two years of recorded output. Every now and then there is a Beatles revival, but such events are the exception rather than the rule. Consumers evince an overwhelming preference for music produced in the very recent past.

Most likely the music market is about more than simply buying “good music,” as a critic might understand that term. People buy music to signal their hipness, to participate in current trends, or to distinguish themselves from previous generations. Buyers use music to signal their social standing, whether this consists of going to the opera or listening to heavy metal. Others value partaking in novelty per se. They find newness exciting, a way of following the course of fashion, and the music market offers one handy arena for this pursuit. For some people music is an excuse to go out and mix with others, a coordination point for dancing, staying up late, drinking, or a singles scene. Along these lines, many fans seem to enjoy musical promotions, hype, and advertising as ends in themselves, and not merely as means to hearing music. They like being part of the “next big thing.” The accompanying music cannot be so bad to their ears as to offend them, but the deftness of the harmonic triads is not their primary concern.

In other words, the features of the market that matter to the critic may not be very special to consumers at all. Most of all, consumers seem to care about some feature of newness and trendiness, more than they care about music per se. So how much does it matter, from a consumer’s point of view, if weaker copyright protection reshapes the world of music?

Under one hypothesis, the specific musics of our day are easily replaced, or in economic terminology, highly substitutable. All other things equal, people will buy the new, but they could get along with alternatives almost as well. For instance perhaps “ravers” could use Gregorian chants to define their cultural status. Indeed one chant CD (“Chant”) had a very long and successful chart run. Young rave and techno fans were among the largest buyers of this recording.

Or perhaps half the supply of music could do almost as good a job of supplying symbolic goods, especially if music companies can track fan demand with greater facility. Alternatively, individuals could rely more heavily on alternative means, such as fashion, to signal their social standing and participate in trends. These points are all speculations, but they show the difficult of pinning down what music fans really care about.

Consider two further examples. First, in the former Soviet Union, dissident rock and roll bands performed many popular culture functions and commanded a fervent following. These bands fell short of the objective critical quality of their Western counterparts. Still they provided consumers with many useful services, including a means to signal rebellion against the Soviet state. Second, in 1941, the major radio stations refused to carry the catalog of the music publisher ASCAP, in a dispute over fees. At that time ASCAP, the leading music publisher and clearinghouse in the United States, dominated the music market. The stations instead played BMI music, which was more oriented towards rhythm and blues and offered less Tin Pan Alley, crooning, and big band. Radio listeners seemed to take the sudden change in stride; there is little evidence of a serious problem. Music fans continued pretty much as before, except for the change in styles and associated music publishers.

For whatever reason, most consumers find it harder to reorient their attention towards older musics. Perhaps only new music allows for effective signaling and sorting. When music is new, individuals can show that they are connected to current modes of thinking and feeling. Not everyone can know “what is in,” because “what is in” is changing so frequently. That very fact makes it worthwhile for consumers to put effort into following the new. The music market might therefore churn product to help people communicate their identities to others, and to help people play an ongoing dynamic game of clues and cues. Furthermore previous generations already have claimed older musics, making them less well suited for social differentiation. Perhaps musical taste is a game of secession and repudiation more than anything else.

So the music of Chuck Berry “no longer fits” the world of 2005, and cannot be made to fit it. Critics still love the music, and some niche consumers will be drawn to its merits, but it can never hold the current place of Britney Spears. That is why hit reissues are rare. It is not because consumers still remember the older musics. Rather most consumers do not care about them very much. It thus appears that the value of popular music, to most consumers, consists of some temporally specific tracking quality. This may involve an ability to follow, correspond to, or perhaps even shape the spirit of the times. Rejection of the previous Zeitgeist may be part of this same process. For consumers, this tracking quality is a significant part of the value of music. The music industry is delivering the goods when its product performs this tracking function, and otherwise not. The Internet helps music perform tracking functions of this kind.

The bottom line: The welfare economics of music do not resemble those of bread or buttons.  Right now we do not even know whether music is being oversupplied or undersupplied, relative to an optimum.  Beware of any analysis of this case which does not consider these deeper underlying issues.

Who will win the next Nobel Prize in economics?

Let us look at the betting market, as noted by guest-blogger Michael Stastny on his home blog Mahalanobis. The leaders are:

1) Ed Prescott – A powerhouse economic theorist. He has seminal insights into the role of “real” (i.e., non-monetary) forces in business cycles and whether returns on stocks (7% average) and bonds (a little over 1% on average) reflect the relative risk of these instruments. I am also a fan of his work on monopolies –often government monopolies — as barriers to innovation. His latest work suggests that Americans work more than Europeans because our marginal tax rates are lower.

2) Eugene Fama – His work on empirical finance tested whether the market rewards risk-taking and which variables might predict “excess returns.”

3) Gordon Tullock – My colleague, read my previous remarks.

4) Oliver Williamson – Asset specificity is his key idea. You invest in relationships with business partners and much of the value is specific to that relationship. Then things start going wrong…

5) Paul Krugman – Krugman winning the prize today would mean something very different than Krugman winning the prize five years ago. The chance of this happening is either much greater or much less than I think, I am simply not sure which.

6) Robert Barro – He has shown longer “legs” than his critics seemed to think he would. A powerhouse of macroeconomics and growth. It is less well known that he also did early versions of political business cycle theory and sticky price macroeconomics. I do not believe, however, that the Swedes will choose this year to reward someone who has to some (relative) extent defended Bush economic policies. (If you are wondering, Hans Blix is a heavy favorite to win the Peace Prize.) Barro is a very effective economic popularizer, in addition to his scholarly work.

7) Edmund Phelps – His work on labor markets laid the basis for the next thirty years of macroeconomics. He is not leading the betting market, but many observers consider him to be “due.”

Who is missing? Thomas Schelling is the most notable living theorist of spontaneous order and a key father of applied game theory. Like Phelps, he is “due.” Most of the people on the “New Candidates” list don’t have much of a chance, and here is a list of expired candidates.

Gratitude Journals and Loewenstein’s Challenge

Background: George Loewenstein is one of the leading figures in Economics and Psychology.

While walking in Pittsburgh one afternoon, Loewenstein tells me that he doesn’t see how anybody could study happiness and not find himself leaning left politically; the data make it all too clear that boosting the living standards of those already comfortable, such as through lower taxes, does little to improve their levels of well-being, whereas raising the living standards of the impoverished makes an enormous difference. (full story)

Of course, you don’t need Loewenstein to make this point. You could just listen to my favorite song by Johnny Cash, featured in the so-good-it-hurts soundtrack for Kill Bill, Volume 2:

How many times have
You heard someone say
If I had his money
I could do things my way

But little they know
That it’s so hard to find
One rich man in ten
With a satisfied mind

Money can’t buy back
Your youth when you’re old
Or a friend when you’re lonely
Or a love that’s grown cold

The wealthiest person
Is a pauper at times
Compared to the man
With a satisfied mind

The answer to Loewenstein’s challenge can be found in the growing psychological literature on gratitude. Several interesting experiments (like this one) ask subjects to keep a “gratitude journal.” Main idea: Every day, write down things you are grateful for. Depending on the experiment, control groups either do nothing, or keep an “ingratitude” diary, or write down a random childhood memory. The main finding is that keeping a gratitude journal makes people happier than the other treatments.

So what? Almost all redistributive rhetoric urges people to dwell on the negative – you or other people aren’t getting what is due. This in turn makes people want to “do something” about the problem. And you can rest assured that no matter how much redistribution there is, egalitarians will never say “OK, life’s fair now. We’re done complaining.” No, what they foster is literally a lifestyle of ingratitude – a recipe for unhappiness.

If we really want to make people happier, we would do almost the opposite. Tell people to be grateful for what the market gives them, and try to emulate more successful people instead of envying them. Children hear this all the time, and it is damn good advice. Adults should practice what they preach.

The Freedom of a Confucian

The great free-market economists and libertarian philosophers of China were not Taoists, but Confucians, according to Auburn University philosopher Roderick Long. I often say that I never doubted the value of history of thought until someone tried to convince me of it, but Long’s “Rituals of Freedom: Austro-Libertarian Themes in Early Confucianism” Journal of Libertarian Studies 17(3) is an amazingly interesting and learned paper. It is true, Long admits, that the Taoists have a few grand libertarian passages. The favorite from Lao-tzu has to be:

The greater the number of laws and restrictions,
the poorer the people who inhabit the land.
The sharper the weapons of battle and war,
the greater the troubles besetting the land.
The greater the cunning with which people are ruled,
the stranger the things which occur in the land.
The harder the rules and regulations,
the greater the number of those who will steal.
The sage therefore does not contrive,
in order to bring about reform,
but teaches the people peace of mind,
in order that they might enjoy their lives.

Tao Te Ching Section 57

Unfortunately, Long points out, a much stronger theme in Taoist is primitivist hostility to modern civilization. Listen to Lao-tzu describe the Taoist utopia:

Lessen the population. Make sure that even though there are labor saving
tools, they are never used. Make sure that the people look upon death as a
weighty matter and never move to distant places. Even though they have
ships and carts, they will have no use for them. … Make sure that the
people return to the use of the knotted cord [in lieu of writing]. … Then
even though neighboring states are within sight of each other, [and] can
hear the sounds of each other’s dogs and chickens … people will grow old
and die without ever having visited one another.

In contrast, Long finds much of value in the Confucians:

The early Confucians, by contrast, may not be as radical in
their anti-statism as the Taoists, but in my estimation they make up for this flaw by firmly
yoking their anti-statism to the cause of civilization, commerce, and the Great Society;
their overall program thus looks a lot more like contemporary libertarianism than the
Taoist program does. One Confucian text, while noting approvingly Laozi’s hostility to
despotism, sharply criticizes Laozi for wanting to “drag the present age back to the
conditions of primitive times and to stop up the eyes and ears of the people”; the best
ruler instead “accepts the nature of the people,” which is to long for “beautiful sounds
and forms,” “ease and comfort.”

The highlight of Long’s article is his discussion of the Sima Qian (c. 145-85 B.C.). Almost two thousand years before Adam Smith, Qian opined that “Wealth and currency should be allowed to flow as freely as water!” and had arguments to defend his position. And who said that Chinese intellectuals had no appreciation for the merchant class? Few Western thinkers match Sima’s appreciation of entrepreneurship:

These, then, are examples of outstanding and unusually wealthy men.
None of them enjoyed any titles or fiefs, gifts, or salaries from the
government, nor did they play tricks with the law or commit any crimes to
acquire their fortunes. They simply guessed what course conditions were
going to take and acted accordingly, kept a sharp eye out for the
opportunities of the times, and so were able to capture a fat profit. …
There was a special aptness in the way they adapted to the times …. All of
these men got where they did because of their devotion and singleness of
purpose. … [T]here is no fixed road to wealth, and money has no
permanent master. It finds its way to the man of ability like the spokes of
a wheel converging upon the hub, and from the hands of the worthless it
falls like shattered tiles. … Rich men such as these deserve to be called the
“untitled nobility” …

Murray Rothbard praised Sima in his history of economic thought, but Long notes that he neglected to mention that he was a Confucian!

It is hard to read this piece and not stand in awe of Long’s command of the Chinese literature. This is a body of thought comparable to Western philosophy in its intricacy and depth. Even if you couldn’t care less about Chinese proto-libertarians, this article exemplifies the true meaning of scholarship. And so the Sage says: check it out!

How to read difficult books

Yes, today is the hundredth anniversary of “Bloomsday,” June 16, 1904, the day on which the adventures of Leopold Bloom (Ulysses) start. The book, long a favorite of mine, is not nearly as difficult as it is sometimes thought to be.

Here are a few tips for reading otherwise difficult works of fiction:

1. Try reading the last chapter first. Don’t obsess over the sequential.

2. Read through the first time, following each voice or character, skipping passages as you need to. Then reread the book as a whole in order. This works especially well for Faulkner.

3. Try reading the first fifty pages three times in a row before proceeding.

4. Don’t be afraid to skip over material and return to it later. This is necessary for the first fifty pages of Nostromo.

5. Read through without stopping, and then try the book again, but with some idea of where things are headed.

6. Read some of the secondary literature first. I don’t like CliffNotes, but in general don’t be afraid to go low when looking for help.

7. Read the book out loud to yourself or to others.

8. Simply give up.

I’ve found that some combination of these tricks almost always works.

By the way, here are some recent writings on Ulysses and the centenary.

What does the American public believe?

Many things that ain’t so, according to our colleague Bryan Caplan. They believe that protectionism creates jobs, and they think that big corporations, rather than supply and demand, set the price of gasoline. See the link for a longer discussion and some citations of specific questionnaire evidence.

Here is my favorite bit:

The only category of spending that the public invariably wants to cut is foreign aid–which amounts to about 1% of the federal budget!

Believe it or not, it is not unusual for a member of the general public to think that foreign aid consists of forty percent of the United States government budget. Of all the biases we observe in voters, “suspicion of foreigners” appears to be the most pronounced. Bryan, who has done the relevant work here, is writing a book on how and why democracy can go astray through irrational voters, I await its release eagerly.

Here are some broader polls on NAFTA and free trade, compiled by AEI. Even the people who favor free trade, presumably for its benefits to consumers, think it costs us jobs. Given how the public feels, I am always surprised that we have as much free trade as we do.

Ways in which movies assume away, or do not assume away, scarcity

Here is a list of twenty ways in which movies alter our usual presumptions about scarcity.

Here is one of my favorites:

6. The ventilation system of any building is the perfect hiding place. Nobody will ever think of looking for you in there and you can travel to any other part of the building undetected.

The entire list is amusing, courtesy of the ever-inventive

Or how about this one:

8. Should you wish to pass yourself off as a German officer, it will not be necessary to learn to speak German. Simply speaking English with a German accent will do.


Thank you all for reading

Alex told me that today we broke 10,000 readers for the first time! Many thanks to you all for reading, and for your feedback and ideas. I’ve found blogging to be an enormously rewarding experience.

My favorite article on blogs, by the way, is this piece by Clay Shirky. It tells me, among other things, that I shouldn’t expect to make any money blogging. No problem, and I look forward to writing tomorrow’s posts.