Buying Collaboration II

On Monday, I described a controversial auction by William Tozier of Ann Arbor, Michigan. The highest bidder would win the chance to collaborate and write an academic article with him.

A number of readers sent interesting comments. Some, like Davis King, pointed out that collaboration for pay already exists and is quite common in some fields like computer science. He also pointed out a lot of de facto collaboration for pay, such as when undergraduates pay tuition and get the opportunity to co-author papers with professors.

Two readers noted that at least one scientist, Miriam Rothschild – a noted bug scientist, was independently wealthy and funded a long string of collaborations in fields that weren’t receiving much attention. The resulting work is well accepted in biology and her self-funding didn’t seem to raise suspicions about her work.

One reader noted that pay for collaboration might be hard to distinguish from research assistance. This is a good point, but I think there is a simple response – research assistants merely carry out the instructions of the researchers while paid collaborators are compensated for original, creative work.

Mr. Tozier himself wrote to me and told me about his current project, an online forum that would facilitate collaboration among non-academic researchers. I think the future probably holds a continuum of possibilities – universities will probably sponsor only “altruistic” research while scientists outside the academy will probably work together in more varied contexts.

(More) ideas that won’t work

Take 250 reasonably well-known artists and put their work together in a trust. Later the works will be sold. The payoff to each artist comes half from his paintings, half from the other paintings in the lot. The intermediary takes a mere twenty percent, plus it charges the artists half the costs of storage.

It is a retirement program for artists; supposedly it will minimize their risk and encourage creativity.

I can think of at least five reasons why it won’t work. To see just one, decompose the transaction. Half of your income stream remains tied up in your own art and thus risky, minus the twenty percent of course. With the other half of your pension you decide to invest in not-yet-totally-famous artists. Would anyone recommend such purchases on their own merits? Is that your idea of insurance?

Here is their web site. Here is the home page of the founder, Dan Galai; he has a prolific publication record in economics journals. For more information, see the May 29 issue of The Economist, p.75.

Paying for Open Access

Ideas are public goods so open access publishing is theoretically ideal but how to pay for it? The Proceedings of the National Academy of Sciences (PNAS), the flagship journal of the National Academy of Sciences is trying an experiment. If you can’t charge the readers how about charging the authors? PNAS authors may now opt to pay $1000 to make their articles available for free immediately upon publication.

It’s an interesting idea – authors do receive benefits from publishing papers but in truth it’s more important that the paper be published than read. At $1000, I think the benefits are overpriced especially since some readers do pay for the journal and can read the articles from day one. Also PNAS opens access after 6 months in anycase.

Authors might pay $1000 if a combination of charity, peer-pressure and noblesse-oblige establishes a norm of payment. But therein lies a dilemma. The more authors that are willing to pay for open-access the less readers will be willing to pay for selective access. If every author pays who will buy the journal?

Can $1000 per author support a publication with no paying readers? The American Economic Review publishes about 100 articles a year and has costs in excess of one million dollars – so the economics don’t look good. True, those costs support a print journal and open-access would be electronic online so that makes the equation somewhat easier to balance but it’s still touch and go at best.

Even though I am somewhat skeptical I applaud the Academy for this experiment and I hope that other journals will be equally creative.

Thanks to Monique van Hoek for the pointer.

Haitian fact of the day

In Haiti’s slums, round swirls of dough can be found baking in the sun. They look almost appetizing until you learn the ingredients: butter, salt, water and dirt…

And the dirt biscuits of Haiti – called “argile,” meaning clay, or “terre,” meaning earth – are not exactly a final cri de coeur against starvation.

Like the mice in Malawi, they are a staple of the very poor, somewhere between a snack and a desperation measure. Making them has been a regular business for years. The clay is trucked in plastic sacks from Hinche, on the central plateau. Blended with margarine or butter, they are flavored with salt, pepper and bouillon cubes and spooned out by the thousands on cotton sheets in sunny courtyards that are kept swept as “bakeries.” They cost about a penny apiece.

“They’re not food, really,” said David Gonzalez, a reporter at The Times who has visited Haiti many times. “People with hunger pangs eat them just to fill up their stomachs.”

Here is the full story (NYT); it is sad to even use the “food and drink” category for this entry. Here is a previous installment of “Haitian Fact of the Day.”

Update: I wrote this post a few days ago, before the horrific flood. Flooding is such a severe problem in Haiti because of deforestation, brought on by poorly defined property rights to trees and forest.

Death to the Hackers!

Steven Landsburg has a clever column (click here) pointing out that the economic damage prevented by executing a murderer is less than damage caused by the author of a wildly successful computer virus. If we’re willing to fry Jack the Ripper, why not send Urkel to the chair?

Landsburg notes that governments provide goods markets won’t, such as crime prevention. The implication is that cost-benefit analysis would dictate that people would be more willing to pay for prevention of property crime rather than personal safety.

For me, Landsburg misses a simple point: human beings are probably hard wired to care about concentrated damages (like murder of a person) rather than diffuse damages (like screwing up everybody’s email for an hour). No cost-benefit analysis will likely persuade people to go against this intuition.

Jean-Jacques Rousseau’s public opinion theory

It’s pretty well known that Rousseau thought that the public was always right. But while reading On the Social Contract translated by Donald A. Cress, I came upon this less frequently discussed quote:

“The former [‘will of all’] considers private interest and is merely the sum of private wills. But remove from these [private] wills the pluses and minuses that cancel each other out, and what remains as the sum of differences is the general will,” which Rousseau claims in the previous paragraph is “always right” and tends towards the “public utility.”

This is an interesting public opinion theory. It assumes that aggregate public opinion has two components – a selfish and biased component and a component that produces the “right” public policy. The difference between the optimal policy and the median voter’s policy is due not to ignorance or systemic error, but to selfish desires that undermine the provision of public goods. If readers know of a published formal model of this theory, or applications of this theory, feel free to email me.

The best anti-poverty program ever?

I’ll nominate the Earned Income Tax Credit as one of our government’s best policies:

…the EITC is an honest and legal federal anti-poverty program that paid out nearly $28 billion to more than 16 million claimants in 2002.

The EITC is not a safety net program. Its benefits are only available to persons who have worked and received earnings during a given tax year…Over the last 28 years, the EITC has grown to become the largest federal cash or near-cash assistance program directed at low-income families–with outlays far exceeding Temporary Assistance for Needy Families (TANF) and the food stamps program.

Here are some key advantages:

First, the EITC significantly increases the fiscal resources available to working poor families. The program rewards labor earnings with a 40 percent match up to the first $10,000 in earnings (see figure 2). In many cases, EITC benefits are enough to raise a family above the poverty level. Second, the EITC encourages people to choose work over welfare. The program has built-in work incentives, especially at the lowest income levels, which encourage families to attain self-sufficiency. Some studies have shown that the increased availability of the EITC and more generous benefits helped contribute to the decline in welfare recipients after passage of the 1996 welfare reform act (accounting for as much as 20–30 percent of the decline in caseloads).

Note also that EITC offsets the impact of Social Security taxes on low-income individuals; otherwise those individuals would face very high marginal tax rates. Furthermore I’m strongly of the mind that people are happier when they are working, even if their jobs aren’t always fun.

The program is not without its blemishes. These involve a thirty percent error rate (relatively high, compared to other welfare programs), and overpayments of at least $9 billion a year. That is why the IRS invests so much energy auditing people with low incomes.

Still, it is rare when our government gets something so right. So let’s offer our plaudits for the day, before returning to the more frequent instances of government failure. Here is a good article on EITC, which explains its numerous virtues.

Peanut butter

I am finicky about peanut butter. I dislike all the national brands which I think are too overprocessed, sweet and buttery. The local organic isn’t nutty enough. I do like Arrowhead Mills Crunchy which works especially well in peanut butter cookies. I tell you this not to recommend Arrowhead Mills, your tastes may well be different from mine, but to illustrate what’s wrong with the idea that there are too many choices in the market.

We are all finicky in some dimensions but not in others. I don’t give a wit about what toothpaste I use but my wife swears by Burt’s Bees. I know the difference between Mozart and Bach but couldn’t tell von Karajan from Solti although I have no doubt that my co-blogger will have no-doubt which is the superior.

If there was “one toothpaste for all” the price would be lower and I would be better off. But one peanut butter for all would stick in my craw. I am willing to pay more for products I don’t care about to have options among products that I do care about. After all, in some sense it’s the products that I care most about that most define who I am.

Addendum: This note was sparked by Don Boudreaux’s observation over at Café Hayek that the average supermarket has 30,000 items. That’s right – which is why I shop at Wegman’s which must have at least 60,000 items!

Mall Science

Paco Underhill has made a career of studying shopping malls. In two well known books (click here) , he lays out a wealth of findings on the world of the mall, and describes how retailers lose sales by ignoring how people actually use malls and shops. For example:

– people tend to buy stuff that’s placed away from the door, stuff near the door sells poorly
– people tend to walk through the mall with the shops on their right hand side, so place your products facing in that direction; displays facing the wrong direction rarely get people to buy stuff
– chairs in stores are great, because impatient family members who are seated will wait longer while you shop

Who would’ve thought that malls provide such nice examples of systematic biases in consumer behavior and the market inefficiencies they create?

Oh Oprah!

Cover headline from “O, The Oprah Magazine” (June, 04):

The Wrinkle Report: Treatments that actually work (science finally does something good for women!)

What, anti-biotics weren’t enough? And what is Oprah saying about what women value? Reminds me of the Barbie that whined “Math is hard,” when you pulled the string out of her back.

I know, I know, Oprah is a saint but even saints ought to be questioned.

Markets in everything – Korean women edition

This time courtesy of the ever-insightful Randall Parker. Here is one juicy bit:

Chinese men may buy so many North Korean wives that North Korea will either become militarily aggressive or collapse from within. This is not implausible. Those 30 to 40 million single men in China in the year 2020 mean there wil be 3 to 4 times more single men in China than there are women in North Korea. The Chinese will be more affluent than the North Koreans unless radical changes happen to North Korea’s economy. North Korea is the place where Chinese men will have the best competitive advantage in angling for wives. The other East Asian countries are not nearly as poor as North Korea and North Korea shares a long 1,416 km land border with China.

China’s economy is growing rapidly. The buying power of Chinese men is rising. Even poor Chinese farmers can afford to buy North Korean women.

And what is Randall’s prediction?

Expect the hostility of North Korean men toward China to increase.

Good call, Randall!