How does the fashion industry work without copyright?
Scott Cunningham directs our attention to "The Piracy Paradox," a new law and economics paper on the economics of fashion. The authors argue that the fashion sector has more innovation because of its near-absence of copyright protection. Here is some brief background on the issue.
Fashion is a status good. You wear a new design if some other people do (it must be focal as an object of status), but not if too many other people do. You want some degree of exclusivity to your wardrobe. So let’s say a new design comes out. There will be some early adopters, but then a rapid series of rip-offs from other companies. Once the rip-offs come, companies invest in making further designs. Fashion is ephemeral and the rip-offs spur the next round of innovation. (BTW, here is an economic model of innovation in the fashion sector, and here are some common-sense critiques. Here is a piece on the ethics of fashion copying.)
Ex ante, the companies invest in production capacity. They don’t know if they will be copied or copiers, but the costs and benefits wash to keep normal rates of return. There is more to the argument but read the paper if you are interested. By the way, the authors claim that European fashion industries receive much more copyright protection, but do not seem to be more efficient.
Micro question: For this model to work, what underlying assumptions are needed about the costs of design relative to the dollar flow of fashion demand? A low ratio of fixed to marginal costs? A lingering cache from having been the first with a new style? Here is one unconvincing attempt to answer the question; do tackle this in the comments if you have further ideas.
The authors list a few other areas where copyright protection is weak or non-existent: food recipes, furniture design, tattoos (until recently), trendy hairstyles, and perfume scents. I would add to the list calligraphy, topiaries (I love that word), and chess games. The point is not that these can serve as models for the music or movie industries but rather to figure out how they differ and why the absence of IP protection has led to (apparently) acceptable results.
Here is the legal reasoning why fashion is not well-protected.
Kathleen Fasanella, one of my favorite MR readers, directs our attention to this IP-related fashion blog.
Who will guard the guardians?
From Cory Doctorow at Boing Boing Blog:
A CBS undercover reporting team went into 38 police stations in Miami-Dade and
Broward Counties in Florida, asking for a set of forms they could use to
complain about inappropriate police behavior. In all but three of the stations,
the police refused to give them forms. Some of the cops threatened them (on
hidden camera, no less) — one of them even touched his gun.officer: Where do you live? Where do you live? You have to tell me
where you live, what your name is, or anything like that.tester: For a complaint? I mean, like, if I have —
officer: Are you on medications?
tester: Why would you ask me something like that?
officer: Because you’re not answering any of my questions.
tester: Am I on medications?
officer: I asked you. It’s a free country. I can ask you that.
tester: Okay, you’re right.
officer: So you’re not going to tell me who you are, you’re not going to tell
me what the problem is.You’re not going to identify yourself.tester: All I asked you was, like, how do I contact —
officer: You said you have a complaint. You say my officers are acting in an
inappropriate manner.officer: So leave now. Leave now. Leave now.
HD-DVD v. Blu-Ray
The NYTimes thinks that Sony’s Blu-Ray standard for Hi Def DVD is in trouble now that Microsoft has announced it will support Toshiba’s rival standard. But the Times missed this even more important endorsement of Blu-Ray.
Markets in everything, gastronomy edition
I can’t bring myself to excerpt any part of this article on the ever-tasteful MR. You might think there are no surprises left in this category but even I found more than I had been expecting. And at least five of the sentences in the article made me laugh. Thanks to www.2blowhards.com for the pointer.
Would W.H. Auden have enjoyed blogging?
Knowledge may have its purposes, but guessing is always more fun than knowing.
That Auden bit is cited in the new and fun The World in a Phrase: A Brief History of the Aphorism, by James Geary. While we are on the topic, here are Auden’s aphorisms on reading. Here are his aphorisms on writing. Here are the aphorisms Auden selected and edited into book form.
Geary also offers three aphorisms by Chateaubriand:
An original writer is not one who imitates nobody, but one whom nobody can imitate.
As long as the heart preserves desire, the mind preserves illusion.
Love decreases when it ceases to increase.
In defense of polygamy
I’m not convinced by Tyler’s arguments against polygamy. Let’s clear away some misconceptions.
First, it’s important to note that polygamy (specifically polygny) not monogamy is the norm in human society – some 75% of the known human societies have approved of polygny.
Second, we sometimes look around the world, note that polygny is approved of in societies such as Saudi Arabia that are not exactly women-friendly and conclude that polygny must be against the interests of women. The problem with this argument is that most societies with monogamous marriage have also not been women-friendly. Women can’t drive in polygnous Saudi Arabia but they couldn’t vote in monogamous United States until circa 1920, nor could they easily get a credit card in their own names or easily go to law school as late as the 1960s.
The basic economic argument that polygny increases the demand for women – under polygny Bill Gates can have two wives which by demonstrated preferences makes at least the second wife better off – suggests, but does not prove, that polygny can favor women. (Consider polyandry – would men complain if Angelina Jolie could have two husbands?)
Third, let’s consider Tyler’s argument that polgyny reduces investment in children. It is true that to the extent that polygny increases the number of any particular man’s children that his attention will be divided. But there are two counter effects. First, there is a selection effect. The men with more children will be the wealthier and healthier men – the better providers. If polygny increases the number of children that Bill Gates (oh what the hell my wife doesn’t always read the blog, or me!) has then average child quality over society as a whole will increase.
Moreover, if child quantity is the problem then that problem ought to be addressed directly. Does Tyler support a tax on children ala China?
Also, Tyler puts too much attention on the man. Polygny probably increases the fertility of the polygnous man but it also decreases the fertility of the polygnous woman (not by as much as it increases the fertility of the man because women are already much closer to the physical limit on children than are men but by an appreciable amount), thus the attention of mothers will increase.
Aside: Tertilt argues that polgyny decreases investment but on the basis of a model which combines polygny with many other factors such as brideprice being paid to the bride’s male relatives – this would not apply in the contemporary United States. (It also appears to me on a quick reading that the Tertilt argument may commit the Junker fallacy.)
Polygny could be very well suited to a modern society in which women work. Working women already contract out child care services – a second, stay at home wife, is not that different.
Polygny will be bad for poor men who lose out in the competition for
first wives to rich men who are on their second. This already happens,
by the way, because of serial polygamy – older men divorce their older
wives and marry younger ones leaving older women unmarried and some
younger men without young wives. Bad for the young men but not
necessarily bad for the young wives. For this reason it’s probably
true that polygny cannot be countenanced in a democracy. At least not
until the supply of young men is reduced enough so that every many can
have at least one wife even if some can have two.
On the whole, therefore, I see no strong arguments that banning polygamy (either polygny or polyandry) is socially optimal but due to the power of the patriarchy I don’t expect polygny to be approved of in the United States any time soon.
Comments are open.
Paris advice
1. A few of the best restaurants are Pierre Gagnaire, Taillevent, Le Cinq, and perhaps Guy Savoy. Most critics might put Gagnaire as number one.
2. Michelin "two-forkers" are quite good, but you must book to get in. In general you can’t get a seat in a decent Parisian restaurant unless you either book or show up at opening. If you are wandering around looking for good food at 8:30 p.m., or for that matter 1 p.m., you are unlikely to do well.
3. In The Louvre, spend an hour in the Poussin room and also obsess over Watteau’s Voyage to Cythera.
4. In Musee d’Orsay, gaze at Courbet’s Origin of the World (sorry, I can’t link to the image on a family blog but do Google it) and Puis de Chavannes, in addition to the usual delights.
5. Go see the medieval tapestries at Musee Cluny.
6. Spend a few hours walking the main roads of the Left Bank. Start at Invalides and take the major arteries through to the Islamic Center. Walk, walk, walk.
7. Watch The Triplets of Belleville and spend hours walking through the (rapidly gentrifying) working-class neighborhoods of the Right Bank. The Metro is splendid but it robs you from seeing the greatest walking city on earth (Buenos Aires is number two). Don’t take it. Walk, walk, walk.
8. Go into a good cheese shop and spend $40. Focus on the weirder cheeses. Buy the non-pasteurized delights. Sit down with a baguette and some fruit as well, finishing the meal with small squares of outrageously priced dark chocolate. Throw in a sausage for good measure. Keep the cheese leftovers in your room at night and eat them for breakfast the next day. And the day after that. See how many days they will keep, you will be surprised.
9. Rue de Bussi and thereabouts has a convenient collection of cheese, fruit and bread shops, and it is in an excellent part of the Left Bank.
10. Internet Cafes are hard to come by. You must rely on the dumpy area near Centre de Pompidou. I find Paris to be the hardest city to blog from.
11. See a "world music" concert from Algeria, Madagascar, or the Congo. Or try contemporary music at IRCAM.
12. Here is my previous post My Favorite Things French. Douse yourself in Godard films before going. Start with Breathless, Band of Strangers, and My Life to Live.
13. If you want to read recent French social science (if you can call it that), try Bruno Latour’s We Have Never Been Modern, Jean Baudrillard, Alain Badiou’s Metapolitics, and Gilles Deleuze’s Anti-Oedipus. Don’t get too upset if these books only make intermittent sense. At least they are alive. For a recent hit novel, try Houllebecq’s The Elementary Particles.
Comments are open, and I encourage all of you but especially John Nye and Barkley Rosser — both Paris experts — to make a few suggestions for my friend.
Parking fact of the day
On average [in the U.S.] a new parking space has cost 17 percent more than a new car. Drivers may not realize it, but many parking spaces cost more than the cars parked in them, especially because cars depreciate in value much faster than parking spaces do…the parking supply is worth more than the vehicle stock.
That is from Donald Shoup’s The High Cost of Free Parking, a detailed, economically insightful, data-rich, and lengthy, impassioned plea for charging people for parking spaces. Here is Dan Klein’s excellent review of the book.
William Easterly
I had the pleasure of meeting and introducing Bill Easterly tonight. March 16 he has a new book coming out, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done so Much Ill and So Little Good, order it here.
Jonathan Amith
Word by word, Mr. Amith is creating an extensive archive of Nahuatl, the language spoken by the Aztecs at the time of the 16th century Spanish conquest and now the first language of 1.5 million Mexican Indians. He records fables and personal histories, collects plants and insects, and keeps up a nonstop patter with locals, searching for information to add to a Web site he is building that is part dictionary, part encyclopedia and part storybook.
His goal is both daring and quixotic: to preserve Nahuatl so that native speakers don’t discard their language as they turn to Spanish, which they need to compete in contemporary Mexico…"[Jonathan Amith] harkens back to the 19th century tradition of the
adventurer-scholar who says, "I’ll go out and do something and the
world be damned," says Tyler Cowen, a George Mason University economist
who studies Nahuatl-speakng villages.
For more, see the front page of today’s Wall Street Journal,
center column. By the way, tomato, coyote, avocado, and chocolate are all English words which came from Nahuatl. Nahuatl is the most beautiful language I have heard. Here is Jonathan’s web page. I think of Jonathan as an obsessive collector of words, in the best sense of that term. He is one of the most remarkable men I have met and his knowledge of the social sciences is phenomenal. Here are some MP3 files
of Jonathan’s linguistic work. Here is my book on the village, which also
profiles Jonathan. Comments are open, especially if you have a link to the article ("Scholar’s Dictionary of Aztec Language May Take a Lifetime," by Bob Davis); it should appear on-line at some point.
The economics of polygamy
The new HBO series Big Love presents a polygamous family, raising the obvious questions. Here is Ted Bergstrom on the economics of polygamy. Here is Tim Harford on polygamy. Excerpt:
It’s hardly surprising that in most polygynous societies, the bride’s
family gets large payments in exchange for her hand in marriage. If
polygyny combined with women’s rights, I bet we’d see more promises to
wash the dishes. Not everybody would have to share a husband, but I can
think of some who might prefer half of Orlando Bloom to all of Tim
Harford–including my wife.
In my bones I am a square who believes this arrangement cannot be best. Economists might question how polygamy makes women worse off, since they can always decline the arrangement. You might try a story about how the family, not the woman, captures the dowry payment and uses it to help their sons buy more wives (see Bergstrom, noting also that the very presence of polygamy shifts the outcome of the bargaining game with the family). Or you might try a story about sexually frustrated males who are led to revolt, thus destroying social order.
How about the trade-off between quality and quantity of children? A genetically talented father with many wives will likely maximize the quantity of children rather than their quality. This has a long-run negative externality, especially if you believe in the Lucas-Uzawa models of economic growth, or some approximation thereof. You would rather be in a society with fewer but more talented people. Switzerland rather than India. The loser is not the wives but rather the next generation of children. A piece in the February JPE also notes that the children may substitute for savings and thus polygamy can stunt capital formation; I take this as another version of the same argument.
The bottom line? We should encourage family structures that spur human capital formation. Polygamy does not do the trick. Comments are open…
A Whitman Sampler
Glen Whitman has got Coase in the brain. In Against the New
Paternalism: Internalities and the Economics of Self-Control he puts Coasian insights to good use arguing against the new paternalism of internalities.
Writing the paper must have been hard, hard work because Glen has now got the Coasian Blues. (More at the link!).
You can hire an agent to work in your basement
But you know there’s a
possible cost:
That dude could be shirkin’ yet oughta be workin’
If you
don’t hire monitors, boss!You can bring on a man to run your food
stand,
But your firm could be courtin’ a loss.
‘Cause that helpful young
man might come up with a plan
To abscond with your so-special sauce!Yeah you pick and you choose… the markets you use;
And if you
pick wrong… you’ll be singing the blues.I know that one day if my
tears go away
Then my cheeks’ll be rosy in hue
But until that day comes to
pass I must say,
I’ll be singin’ the Coasean Blues.
Make Money on eBay
Would you rather pay $10 and have free shipping or pay $5 and pay $6 for shipping? Answer: you prefer the latter. Well, at least if you are like most bidders on eBay.
Morgan and co-author Tanjim Hossain, an assistant professor at Hong
Kong University of Science and Technology, held 80 auctions of new
music CDs and Xbox video games to test how consumers respond to
different price schemes. In the eBay study, they varied the opening bid
price and shipping charges on identical CDs, ranging from Britney
Spears to Nirvana, and video games, including Halo and NBA 2K2.…A
perfectly informed and fully rational consumer will merely add together
the two parts of a price to obtain the total out-of-pocket price for an
item and then decide whether to buy and how much to bid based on this
total price.But that’s not what happened
in their eBay auctions. Instead, they found that lowering the opening
bid price while raising shipping charges attracts earlier and more
bidders and ultimately leads to higher revenues compared with doing the
reverse. Those findings suggest consumers pay less attention or even
completely overlook shipping costs when making bids…
The quote is from a writeup, the full paper is
…Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay (subs required).
Also check out the interesting data on online pricing at Nash-equilibrium.com.
Thanks to Carl Close for the pointer.
Yet more economics of curling
Curling is the funniest sport I have seen. Best is how the duo scrubs the ice with brushes in front of the moving stone, while Anette Norberg barks out pagan Swedish curses, in an attempt to steer the thing after it has left her hand. The economics of curling? I needed only to watch it. If the sport falls on hard times, it could sell itself as a Monty Python skit, albeit in an obscure Swiss German dialect. Is it the only Olympic sport where you can wear earrings while playing? Here is a curling video — be baffled, be very baffled. The division of labor is limited by the extent of the market, as they say.
Will our universe be mangled?
"It could be there’s a moment of pain before the end," [Robin] Hanson says. "But you could be comforted by the fact that versions of you will go on, even if you don’t."
Yes that is our Robin Hanson, on quantum mechanics and multiple universes, picked up by New Scientist. Here is Robin guest-blogging quantum mechanics for us; see also here. The bottom line? Finish that novel you are working on.