Should under-20s be allowed in the NBA?

by  Tyler Cowen in

It appears that Commissioner David Stern is pushing to ban under-20s from NBA play.  And surprise, the player’s union — whose median member is older than 20 — is not screaming about this proposal.  But what are the economics?  If a team drafts an under-20 player, are there negative external costs placed on the rest of the league?  I can see a few scenarios:

1. Drafting younger players makes it harder for bad teams to improve.  The lower-ranked teams pick first, but now they are no longer assured of getting real value.  The draft becomes more like a true lottery, which hurts the long-run competitive balance of the league.  And if teen players do pan out in a few years time, they can become free agents and move to winning teams.

2. Drafting younger players forces teams to spend more on scouting to predict player quality.  College ball in essence provides free training and free information.

3. Drafting younger players gives the league as a whole a bad reputation.  Furthermore the overall quality of play is lower.  Teams invest in future stars and future wins, not caring enough about the bricks they shoot up in the meantime.  But hey, other people are watching, or at least we hope so.

4. Forcing young athletes to play in college induces college ball fans (blecch, I hate college basketball) to take greater interest in the NBA.

5. Young phenoms, such as LeBron James, now have more years in the league since they are drafted earlier.  This boosts interest and attendance for everybody.  If you think that the NBA is superstar-driven, arguably teams do not draft young enough.

6. Perhaps later drafting would produce more stars.  Many players rush to the NBA and lose the chance to learn the game.  They are overconfident, while a commons problem plagues the drafting teams.  Waiting would make almost everyone better off, yet no single party can be induced to wait.

I’ll side with #5.  I suspect that Stern and the player’s union are either a) making a simple mistake in the name of misguided moralism, or b) crafting some broader Faustian and Coasian bargain where Stern offers this as one chip.

The commercialization of European art

by  Tyler Cowen in

Arts and business, once parallel worlds in Europe, are
merging as never before. More companies than ever back the visual
arts: Patronage has more than doubled in the past 15 years in the
U.K. and more than tripled in France.  The difference is that, where once companies funded the arts
selflessly and on a whim — the chairman’s, or his wife’s — they
now seek bang for their buck: their name in the show’s title, free
museum access for staff and client parties, the right to advertise
their sponsorship, and the right to run spinoff educational and
social programs. And when all is said and done, they conduct
studies to make sure it was worth it.      

European nations find themselves so upset by U.S. influence, in part, because they are being drawn inexorably toward our economic model; read more here.  And by the way:

Surveys show that only 4 to 7 percent
of consumers see sponsorship as a betrayal of the art, according
to Angela Diakopoulou, managing director of Marketlink Research,
which conducts sponsorship evaluation studies on behalf of
customers such as UBS, Unilever and the National Gallery.

Who stays up the latest?

by  Tyler Cowen in

The Portuguese, it turns out.  3/4 of them stay up past midnight.  Next in the night owl rankings come Taiwan, Korea, Hong Kong, Spain, Japan, Singapore, and Malaysia, in that order.

And how about the earliest risers?  91 percent of Indonesia is up before 7 a.m..  Then come Vietnam, Philippines, Denmark, Germany, Austria, Japan (hey, they stay up late too; 41 percent catch less than six hours), India, Finland, and Norway.

The biggest snoozers?  The Australians — 31 percent of them sleep more than nine hours a day, or lie very badly.  As always, we are sampling only those who can and do respond to the survey.  The study was by Nielsen, here is one summary.

Four things you (I hope) already know

by  Tyler Cowen in

The purpose of our blogging is to circulate ideas that are new, or at least new to us and perhaps to you.  But every now and then there is something to be said for sheer repetition of the important.  If nothing else, this incursion into the known might make those points more memorable, more salient, or more likely to influence your behavior.  So here goes:

1. Torture is morally wrong, and the U.S. government should not be torturing people or easing the use of torture.  And yes I will make an exception for the ticking nuclear time bomb.

2. We have dropped the ball on securing Russian nuclear weapons.  There was simply no good reason for this mistake.

3. Avian flu could be a very very serious pandemic; here is the latest.  We are not prepared.  How about more investment in faster vaccine production technologies, not to mention an improved legal and regulatory climate?

4. Choose the better, not the worse.  Have you failed to apply for your 401K employer-matched savings contribution?  Do you simply refuse to see the doctor for a needed check-up?  Do you fail to perform small considerate but ultimately costless household chores for the benefit of others around you?  Do you fail to realize that all food tastes better when cooked with sea salt?  Repent and reform.

We now return you to the regularly scheduled blogging…

Identity and Transhumanism

by  Alex Tabarrok in

(The debate so far Tyler 1, Alex 1, Tyler 2).  Transhumanism raises two issues of identity, personal identity and species identity.

We change our personal identities all the time not only in obvious ways such as cosmetic surgery, psychoactive drugs, and emigration but even more through personal growth.  A university is at it most glorious and exciting when students are confronted with new ideas and visions that forever change who they are.

Contra Tyler, what Kass, Fukuyama and others worry about is not that the demand for identity is too strong but that it is too weak.  In their equation, Personal growth + Biotechnology = Velociraptors.

When the demand for a change in personal identity is strong it can have important external effects.  You may not want to be a velociraptor but if I change what choice do you have?  Or you may simply have a preference (atavistic and irrational perhaps but still a preference) for human beings as they are now.

Tyler makes the mistake, however, of jumping from such and such preferences are important and real to such and such preferences justify regulation/taxation/subsidization etc.

But I have many real identity preferences that do not justify coercing others.  I think of myself as a professor of economics at GMU but I do not have an absolute right to my job.  I am a friend of Tyler but Tyler gets a say in this too.  I understand why the Quebecois want to prevent the use of English in Quebec but I don’t agree that they have the right to do so.

In the same way, I understand that some people don’t want to expand the human lifespan beyond its "natural" limits but I object to their preventing others from doing so just because they don’t like the sight of sprightly senior citizens.

Women, IQ and Marriage

by  Alex Tabarrok in

In one study, four British universities measured the IQ of 900 11-year-olds
and revisited them 40 years later to see how their lives had moved on.

They found that the brighter girls were less likely to find a man who
wants to marry them, with their chances diminishing dramatically in
direct proportion to their level of intelligence.

For each 16-point rise in their IQ, their marriage prospects fell by 40 per cent.

In contrast, boys’ chances increased by 35 per cent with each 16-point rise.  (Qtd. here).

One theory is that men want to marry women who are not as smart as they are.  I thus explained to my wife (who has a PhD in microbiology) how lucky she was to find a really smart man.  Her response was unprintable in a family blog.  Let’s just say that she had an alternative theory of why smart women don’t get married, something about a fish and a bicycle.

Why are there so many overweight NBA players?

by  Tyler Cowen in

A new study by The Associated Press reveals that nearly half of NBA players qualify as overweight using the body-mass index (BMI). According to the BMI, the only NBA player at a healthy weight is Mavericks center Shawn Bradley.

Here is the link.  Here is a photo of 7’6" Shawn Bradley, occasionally known as "The Stormin’ Mormon" and "The Human Stick."  Here is more information.

Addendum: The Bradley line is a joke…(:

The economics of bankruptcy

by  Tyler Cowen in

I’m against the bankruptcy reform not because I think that one side or
the other is getting shafted, but because I think that easy bankruptcy
is one of the great unrecognized strengths of the American economic
system. Easy bankruptcy is what frees people to be entrepreneurs, to
take risks without fearing that one wrong move will destroy them
forever.

Jane Galt has much more, read it.

More Transhumanism

by  Alex Tabarrok in

In his excellent post yesterday on identity and transhumanism Tyler asked:

Now let’s say
your children could be one percent happier throughout their lives, but
this would mean they were totally unlike you, the parent… How many of us would choose this option?

I think the answer is more than Tyler imagines.  Many poor immigrants have made exactly this choice.  They come from the old country for a better life for their children and in the process their children become something strange and different from themselves, namely American.  The tension between the immigrant parents, never quite learning to speak English properly or to adopt the new ways and mores, and their American children can be hearbreaking.

Transhumanism will never make as large a difference between a single generation as does immigration.

Tyler also writes "Isn’t there a collective action problem here?  Everyone wants a more competitive kid but at the end humanity is very different."

True, but I think the collective action problem is actually a solution to the externality problem.  Consider a slight modification of Tyler’s example.

Suppose that your children could be much happier throughout
their lives, but this would mean they were totally unlike you, the
parent.

Why would parents say no to this offer?  Only because they discount the happiness of their children relative to their own – even if the children gain much more than the parents, the parents lose and they say no.  And yet isn’t this monstrous?

Fortunately, change across a single generation is likely to be small so parents will say yes even though 5 or 6 or 10 generations down the line the changes will be dramatic.  It’s because of this wedge effect that Fukuyama is so worried about relatively small changes today and it’s precisely for this reason that his opposition has no hope of success in a free society.

Bring on the velociraptors.

Why don’t all chains spread nationally?

by  Tyler Cowen in

Matt Yglesias asks:

What prevents the supermarket (or drug store) market from being
consolidated into three or four (or five, or whatever) big truly
national chains? Basically, these places are all the same anyway.
There’s no local character embedded in the Giant brand. Why not reap
further economcies of scale by merging?

He notes that many chains operate only in parts of the country:

We’ve got Duane Reade in New York, along with CVS and Rite-Aid. Here in
DC there’s CVS and a little Rite-Aid, but no Duane Reade and no
Walgreens. I’ve seen Walgreens in Long Island, but not in NYC, DC, or
Boston. I infer from Phoebe’s post that they exist in Chicago. In
Florida there’s a chain drug store called Eckerd, which I noticed they
also have in the Norfolk area. In New York, supermarkets are
D’Agostino, Gristedes, or Food Emporium. Here in DC, they’re Safeway or
Giant. In Norfolk, I saw Food Lion, which I’d heard of because of the
famous lawsuit, and which I also saw when I went to the Outer Banks.
But none of the supermarkets I know from the NYC or DC markets. In the
Boston area, the only supermarkets I saw were Star Market…[TC: what about Wegmans?  Get a car!]

I can think of a few reasons for "incomplete" chains:

1. There is an optimal chain of control and monitoring is costly.  Think of successful companies as based on some fixed factors, such as an excellent CEO.  The value of that factor can only be spread so thinly, which limits the size of the chain.

2. Privately-owned companies offer significant advantages, both on the regulatory front and in terms of coherent control.  You don’t have to please the shareholders with a good quarterly earnings report each period.  Yet privately-owned firms will have a harder time finding the capital to expand.

3. Competing often depends on region-specific skills.  Even if the interior of a Giant is  homogenized, success will depend upon contacts with local distributors, a good pool of local workers, good working relationships with local governments and zoning boards, and so on.

4. Path-dependence matters.  Most suburban areas have room for only so many supermarket brands.  The ones that started first — for purely historical reasons — have a continuing competitive advantage.

5. Many local chains are simply local brand names belonging to a larger national chain with different names across different regions of the country.

6. What are the big advantages of consolidation anyway?  Most of the advertising is local not national.  And to the extent the underlying wholesale markets are competitive, large purchases won’t get you much of a bulk discount.  This, by the way, is one reason why Wal-Mart will decline as trade with the Chinese becomes increasingly common.

My Unconscious is Clear

by  Alex Tabarrok in

The Implicit Association Test is revolutionizing the study of prejudice and bias.  The basic idea is simple, the test taker is asked to categorize a series of faces, hitting a right hand key for a white face and a left hand key for a black face.  Then the taker must similarly categorize a series of words as good or bad, words like wonderful, nasty, peace, hate etc.

Now here is where it gets interesting.  The next list contains both faces and words and the test taker is asked to hit a right hand key if the word is either good or the face is white or to hit a left hand key if the word is either bad or the face black.  Finally, the same task is performed but now the test taker must categorize together good words and black faces and bad words and white faces. The test taker is asked to do the test as fast as possible. 

Bias is revealed, so the argument goes, if response time is faster when good words must be paired with white faces and bad words paired with black faces than the reverse.  Call it the Blink, Blink, Bias test.

Now before you object, it has been shown that the biases revealed by the test do correlate
well with policy preferences and a wide variety of conscious and
unconscious actions.  Also the order of the two important tests, whether you hit the right or left hand keys etc. can all be varied with no change in results.

But what I find most interesting about these tests is that they do not always correlate the way one might expect.  This article from the Washington Post, for example, discusses a number of liberals who took the test and were shocked and appalled to find that they were unconsciously biased.

And now for my confession.  I am well aware of the differences in crime rates, IQ scores, welfare dependency and other factors across races.  I have sometimes been called a racist for mentioning these things.  I would be lying if I said I had a lot of black friends.  Thus, I was prepared to be told the worst about myself and adjust my conscious beliefs accordingly.

But according to the IAT, I showed no signs of bias!  Frankly, I am surprised but my unconscious is clear.

You can take the test here.  Hat tip to Mahalanobis.