Wacky Patents
A satellite missed its orbit. The problem can be fixed but, believe it or not, Boeing has a patent on using the moon, i.e. gravity, to change a satellite’s orbit! The patent probably wouldn’t hold up in court but because of a different lawsuit Boeing is threatening to sue anyway if the firm uses the procedure. Since the costs of a lawsuit are high and the satellite is insured, down it may come.
More here including interesting material on space salvage. Hat tip to Boing Boing. Tabarrok on patent reform here.
Why are there so few eligible bachelors?
…game theory predicts, and empirical studies of auctions bear out, that auctions will often be won by "weak" bidders, who know that they can be outbid and so bid more aggressively, while the "strong" bidders will hold out for a really great deal. You can find a technical discussion of this here. (Be warned: "Bidding Behavior in Asymmetric Auctions" is not for everyone, and I certainly won’t claim to have a handle on all the math.) But you can also see how this works intuitively if you just consider that with a lot at stake in getting it right in one shot, it’s the women who are confident that they are holding a strong hand who are likely to hold out and wait for the perfect prospect.
This is how you come to the Eligible-Bachelor Paradox, which is no longer so paradoxical. The pool of appealing men shrinks as many are married off and taken out of the game, leaving a disproportionate number of men who are notably imperfect (perhaps they are short, socially awkward, underemployed). And at the same time, you get a pool of women weighted toward the attractive, desirable "strong bidders."
Where have all the most appealing men gone? Married young, most of them–and sometimes to women whose most salient characteristic was not their beauty, or passion, or intellect, but their decisiveness.
Here is the full argument. I don’t, however, quite buy this as the explanation of the phenomenon. I view the real world auction as being held — at least if you wish — continuously rather than at discrete times. So the "strong bidding women" can always cave and settle for a "lesser man" after an optimal amount of waiting, yet many don’t. The distinction between period-by-period happiness and overall lifetime happiness also shapes the market. As smart single women mature, their lives get better and better. "Settling" becomes psychologically harder, even if it would make some of the "settlers" happy in the longer run. So settling doesn’t happen; decisiveness become harder to conjure up at the same time that its long-run value is increasing, or in other words behavioral economics is very much at work here.
seriously
The New York Times reports:
In “The Visitor”, Richard Jenkins plays an economist whose flagging joie de vivre is restored when he takes up drumming.
It opens today in limited release.
It’s by the guy who made The Station Agent, a movie about a New Jersey resident with achondroplasia; here is more information.
Iraq update
A loyal MR reader sent me the following from Reuters:
Bombings and strife
apart, Iraq is proving an oasis for investors battered by global financial turmoil, Citi argued in a research note on Thursday.The cost of insuring country-region Iraq’s
bonds against default has fallen so sharply that they now costs less to insure
than Venezuelan debt, said Citi economist David Lubin. "Judging from
the performance of spreads in the market for sovereign credit risk, one could
argue that Iraq has become something of a safe haven in recent months," he said.Oil-exporter Iraq has
benefited from an improvement in its foreign-exchange reserves. Iraqi five-year
credit default swaps — instruments which protect against debt default —
tightened to 520 basis points from around 635 bps at the start of the year. Similar
instruments for Venezuela,
whose President Hugo Chavez is leading a wave of takeovers to wrest companies
from private and foreign ownership, are currently trading at 611 bps. Like
their developed counterparts, emerging markets have been hit by a deepening in
risk aversion in the wake of the credit crunch sparked by U.S. subprime
mortgage defaults.Lubin said chances of a further decline in Iraq risk premium were strong given
the country’s fiscal discipline but warned that the central government could
face challenges from the rising influence of provincial rulers.
As I interpret the email from my source, he is not personally so bullish on Iraqi reconstruction; rather some people are rushing out of other assets and preferring Iraq for its (relative) safety. So you needn’t read this in an optimistic light. Alternatively, you might view this as a bet on the U.S. Presidential race and the rising prospects of the Republicans.
Whatever happened to markets in everything?
I posted this on northern Virginia Craigslist and haven’t heard a peep:
I am looking to learn how to use Second Life. I would like a series of lessons from a tutor with extensive experience in Second Life. I don’t need anything very complicated, just an introduction to the basics. Please email me your rates.
Why is this market failing me? And what should I do next?
The infinitely bad sneeze
Zack writes to me:
You’re in an airport, about to go through the security line. You sneeze, which delays you by two seconds. It doesn’t just delay you by two seconds, though; it also delays everyone waiting in line behind you. And everyone who will show up while the people currently in line haven’t gone through yet. In fact, if you assume that the queue is never empty, which even at 3 in the morning is true for the major airlines, we’re talking about arbitrarily large quantities of wasted time.
I believe that airport queues do eventually empty out, if only at 4 a.m., so is there any setting where this result might hold? And if so, what is your obligation to produce infinitely good outcomes, say by cutting off your nose? On the philosophical side, you might find this debate relevant. By the way, here is Zack on ranking the babies.
Incentives are everywhere
The introduction of automated cameras that ticket people who run a red light has given some cities a "clever" idea – let’s reduce the yellow-light period and increase ticket revenue. Here’s one example from Dallas.
An investigation by KDFW-TV, a local TV station, found that of the ten
cameras that issued the greatest number of tickets in the city, seven
were located at intersections where the yellow duration is shorter than
the bare minimum recommended by the Texas Department of Transportation
(TxDOT).The city’s second highest revenue producing camera, for example, was
located at the intersection of Greenville Avenue and Mockingbird Lane.
It issued 9407 tickets worth $705,525 between January 1 and August 31,
2007. At the intersections on Greenville Avenue leading up to the
camera intersection, however, yellows are at least 3.5 or 4.0 seconds
in duration, but the ticket-producing intersection’s yellow stands at
just 3.15 seconds. That is 0.35 seconds shorter than TxDOT’s
recommended bare minimum.
More examples here and a hat tip to J-Walk Blog.
What I’ve Been Reading
1. Steven Teles, The Rise of the Conservative Legal Movement. It covers the Federalist Society, GMU School of Law, Institute for Justice, among other institutions. The material rang true to what I know; Orin Kerr comments.
2. Ted Hughes, Birthday Letters. This one blew me away; you don’t even have to like poetry, it is more like reading letters. You do need to know a little about his life with Sylvia Plath to appreciate it. A modern masterpiece, highly recommended.
3. 2666: A Novel, by Roberto Bolaño, you can pre-order it here. So far I’m only reading the Amazon site every few days or so, thinking about when the book will come.
4. Francisco Goldman, The Art of Political Murder: Who Killed the Bishop?. Maybe the best book on why Guatemala is such a mess but also on why there is hope. Make sure you read the dissenting reviews on Amazon.
5. Hubble: The Mirror on the Universe, revised and updated, by Robin Kerrod and Carole Stott. Stunning. Most smart people make the mistake of not reading enough picture books. It’s not just that the pictures are good; the text must concentrate on what is truly essential.
Jacqueline Passey resumes blogging
Here. And here’s a new blog on the liquidity freeze in auction-rate securities. And here is Matt Yglesias on the free trade agreement with Colombia.
Average starting salaries by major
Economics comes in 4th, with an average of $43,419.
Sebastian Mallaby on hedge funds
The most striking fact about the ongoing financial mayhem is that it is concentrated not in lightly regulated hedge funds but in more heavily regulated commercial and investment banks. It is banks that created subprime mortgage securities. It is banks that mispriced them. And it is banks that filled their own coffers with this toxic paper, losing hundreds of billions of dollars. A somewhat breathless March 31 Financial Times article proclaimed the closing of the worst month for hedge funds since the collapse of the infamous Long Term Capital Management in 1998. But the average fund tracked by the Chicago-based firm Hedge Fund Research declined by a mere 2.4 percent in March, bringing the cumulative fall for the first quarter of 2008 to 2.7 percent. By contrast, the bank-heavy financial services component of the S&P 500 fell 12.3 percent in the first quarter.
Hedge funds, for the most part, have weathered the storm remarkably well.
Here is more, interesting throughout and in my view largely correct. See also related remarks by Megan McArdle.
It Wasn’t Me
As finance minister, Mr Cowen was responsible for a startling 13 per cent rise in government spending last year, which turned a budget surplus of 2.9 per cent of gross domestic product in 2006 into a forecast deficit of 1.2 per cent this year.
“It was an election year, but if you increase spending that much, you will make some mistakes,” says Alan Barrett, senior economist at Ireland’s Economic and Social Research Institute.
“I do not think anyone would say from the state of public services that it was worth it.”
Cowen is now confirmed as Irish prime minister, here is one story.
Black Los Angeles in Jim Crow America
That’s the subtitle, the title is Bound for Freedom and it is by Douglas Flamming. This book is a good antidote to libertarians who assign too much blame to state governments, and not enough blame to voluntary norms, when it comes to Southern segregation and Jim Crow. Early in the twentieth century, Los Angeles was devoid of the oppressive Jim Crow laws that were so common in the South. In fact California had some (unenforced) laws prohibiting discrimination according to race. Yet according to one survey only three of two hundred saloons would serve blacks. Most hotels did not accept blacks either and that was in direct contradiction to state law. Both Hollywood and the petroleum industry for the most part refused to hire blacks, even for jobs of unskilled labor. On the positive side, many of the businesses along Central Avenue were fully integrated, serving Latino and Japanese customers as well. Blacks did have, overall, a much better existence in LA than in the South but this volume shows that Jim Crow cannot simply be blamed on oppressive government regulations.
Here is my earlier post on Jim Crow in sports.
Antiquity was richer than we think
George Grantham writes:
In recent decades the conventional dating of the origins of Western Europe’s economic ascendancy to the tenth and eleventh centuries AD has been called in question by archaeological findings and reinterpretations of the early medieval texts indicating significantly higher levels of material prosperity in Antiquity than conventional accounts consider plausible. On the basis of that evidence it appears likely that at its peak the classical economy was almost as large as that of Western Europe on the eve of the Industrial Revolution.
Here is sixty pages more, noting that every single page of this paper has interesting material, a remarkable achievement. Here is one bit:
Between 1300 and 900 BC three innovations turned out to be crucial for the eventual integration of Europe’s economic space. The earliest was the improvement in ship construction and sailing technique. As will be discussed in more detail below, the decisive changes in rigging and hull construction that permitted larger and more robust ships were achieved before the Aegean collapse in response to the growing bulk trade in timber and agricultural produce. The perfection of ferrous metallurgy by Cypriot and Aegean smiths was the second decisive innovation. Unlike the changes in naval architecture, the metallurgical innovations of the Aegean Dark Age were an unexpected by-product of economic collapse. The third major development affecting the later expansion of trading networks was the transformation of Proto-Canaanite syllabaries into a true alphabet consisting of approximately two dozen phonetic signs. The triumph of the alphabet was also a consequence of the Aegean collapse, which destroyed the earlier and slightly more cumbersome cuneiform script employed to document administrative and commercial transactions outside Egypt.
The pointer is from Razib. Here is Grantham on the agricultural revolution.
The burdens of fame
Germany’s celebrity polar bear Knut has triggered a new controversy
by fishing out 10 live carp from his moat and killing them in front of
visitors. Critics say Berlin Zoo should not have put live fish inside Knut’s enclosure…The Frankfurter Allgemeine news website reports that Knut "senselessly
murdered the carp", fishing them out, playing with them and then
leaving the remains.
And it seems that the Green Party has complained. Um….HE’S A POLAR BEAR!
Addendum: The story is here. You can survey the German-language press here. The FAZ article is here. While I can imagine valid criticisms of zoos, this is not one of them. It also should be noted that Knut’s normal diet does not consist of tofu.