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Not content with computer desktops, Microsoft today announced a product that would allow it to monopolise surfaces. Here is a news item and demonstration video. If you watch it, you will see that this threatens a few practices and staples of life. First, Crayola are stuffed. No longer will we need to give children or anyone else paints and writing equipment. Hooray. Second, restaurants will get a funky Sci-Fi feel. Finally, it will be the end of free riding on the bill.

The RBA’s new review of payment system reforms has been announced. The big question will be whether they will be considering eliminating interchange fees altogether. As I have written elsewhere, the evidence is that tinkering with or drastically moving interchange fees has little real effect which means that certainty should be the regulatory goal. I note, however, that this does not rule out a zero interchange fee from being a way to provide that certainty. I’ll be making another submission to that review containing the latest econometric evidence. Stay tuned.

This is an exciting day. Tivo is coming to Australia in 2008. There is even a local website. And who do we need to thank; none other than Channel 7. From the looks of it, it is a Series 3 which means that we will likely have HD recording. It also will network in the house, likely have a ‘to go’ option and will stream video from the Internet.

What does Tivo mean for consumers? I am in a rare household that has both a Tivo and a Foxtel IQ. The Tivo is an old one but allows you to record FTA and cable. It is far superior to IQ. Why? It is the little things that matter. Tivo is easier to program (you can even do it while watching TV), has a more intuitive and sensible way of fast forwarding and can even find programs based on your viewing tastes. IQ is positively clunky and only has the benefit of two tuners (something new Tivos sport). Both can be programmed remotely but for IQ not if you want to watch Seven or Ten. Indeed, for those IQ is useless. Tivo is the superior product by far. Read more

My Melbourne Review paper with Andrew Leigh has itself been reviewed in today’s Sydney Morning Herald and also in the Canberra Times and the Adelaide Advertiser (over the fold): Read more

In Slate, Harry McCracken describes GrandCentral an amazing service that basically acts as your call aggregator and screener. Basically, it provides a single number people can call which is then redirected to your other numbers. It has voice mail that you can skip iPhone style or screen. You can program it how to deal with certain numbers and much more. It is the ‘Why Not?’ “what would Croesus do?” answer and indeed was anticipated in part by Ayres and Nalebuff. It is the sort of thing Donald Trump hires someone to do but you can now automate. (No international forwarding or numbers yet but they are apparently coming soon).

GrandCentral raises the stakes in dealing with callers. But as McCracken found out, the callers can fight back.

Convincing my cohorts to use my new GrandCentral number also proved surprisingly tricky. One buddy developed an irritating habit of trying it first and then, if I didn’t pick up, proceeding to call each of my other numbers in succession until I did. It dawned on me that it’s tough to train people to use a new phone number when a) the old numbers still work, and b) the new one mostly benefits you, not them.

And there are other woes throughout the article. In each case, they are probably solvable. Holes in your ‘call wall’ can be plugged; for instance, your phone could block direct calls rather than forwarded calls. But it does illustrate how difficult it is to get a system that works the way people want it to work.

I really enjoy The Dilbert Blog. Scott Adams has a hard head about evidence and dealing with uncertainty. It is not surprising that his readers pushed him to consider the global warming debate. Adams started from the perspective that it takes some work to sift through this debate (something that I have commented on before). But he did it and his conclusion is here (reproduced over the fold). Put simply, it is broadly sensible and appropriate. Read more

The new issue of The Melbourne Review is out with an article by myself and Andrew Leigh on “Unusual Days in Births and Deaths.” It summarises that stream of research.

John Davidson in today’s Australian Financial Review writes: Read more

An inter-blog discussion group has been set-up of which I am thrilled to be a part of. The first question for the group comes from Tim Dunlop:

Q: Tim Dunlop – My first question is picking up on something said by both John Howard and Paul Keating, namely, that when the government changes, so does the country. Both made the comment at a time when it looked to them like they might be about to lose power and so there was, of course, a sense of warning in their observation. So that’s my question: Does the country really change when the government changes?

A: If “It’s Time,” does that mean there’s change?

The first thing that popped into my mind when thinking about this was Al Gore on Saturday Night Live last year where he made a speech as if he had been declared the winner in 2000 and was the current President. (Here is that sketch). Suffice it to say, that anticipated lots of change. This was in contrast to The Economist newspaper that editorialised that had Al Gore been elected nothing really would have been different. Read more

I saw the DVD of Children of Men the other week. It imagined a world where for some reason, no children could be born. Suffice it to say, it wasn’t pretty. Reading this news item on the weekend, reminded me of it. A strengthening of China’s one-child policy led to violence.

As far as I can tell, completely absent in the environmental debate these days is population and birth rates. It was the staple of this in the past (remember The Population Bomb). But today the focus is on emissions.

Therefore, it is high time we recognised China’s sacrifice in curbing population growth, indeed, cutting it back, and the benefits that is bestowing on the rest of us. What is more, it highlights a fact that in any responsible environmental policy, population control will play a role and what is more, at present, it is unequally distributed in the world.

There is something clearly unsustainable in this. On the one hand, we have an increasingly prosperous China, restricting births precisely at a time when many there may be wanting a larger family. On the other, we have the Australian government, promoting fertility and, in the case of the Treasurer, Peter Costello, a minimum three child policy: “one for mum, one for dad and one for the nation.” That last one may be for the nation but it is not for the world. It represents a child that can’t be born elsewhere.

My guess is that sometime in the near future, this inequality of values and of action is going to come to a head. We put up with lots of inequality in wealth. I do not believe that we will seriously be able to put up with similar inequality in birth control or a lack thereof.

Just released today is a petition from 271 academic economics (including 75 professors) calling on the Australian government to ratify the Kyoto protocols (click here). Just as I did many years ago for the last one of these, I was very happy to lend my name to this one.

Although there are some solid objections to some of the details of Kyoto, in actuality, Australia’s stance on this has been counter-productive and unnecessary. There is a strong economic consensus that something appropriate and cooperative needs to be done about climate change and today’s petition should counter any doubt about that.

I should also note that all three of the full time economists at Melbourne Business School — myself, Mark Crosby and Catherine de Fontenay — are signatories.

A few new posts at Game Theorist recently including some leading questions, more controversy on sleep and Marge’s bowling ball.

Sony have charged someone 61.31 euro for a replacement screw. Presumably, they didn’t ask the price before they ordered and so Sony got away from it. It is also likely that the screw can be returned and a suitable replacement procured for somewhat less.

I guess from Sony’s perspective the issue is this: they could just send out a screw for the cost of postage or they could charge outrageous prices and make a killing on the occasional sap who bought but didn’t return the screw. The latter plan is a good idea if there are no repercussions as the former plan makes no direct profit. I guess the wave of internet posts today tell us otherwise. Oops.

There is lots of talk about the usefulness of polls versus prediction markets in working out who might win the next election. Well, the news today is that Therese Rein (Kevin Rudd’s wife) is placing a big bet on Labor’s victory in the upcoming election. She will sell her self-built multi-million dollar business that entrepreneurially developed alongside changes in government policy. The reason is obvious: should her husband become Prime Minister it would represent a major conflict of interest to be managing a company that relies on government contracts. Indeed, it is the definition of a conflict of interest.

Rein could have waited to see if Labor won or not but has chosen to sell out now. The pressures of the micro-scrutiny of the last week brought it to a head. But she may sacrifice millions in making this decision that is clearly a different one from one based on pure commercial considerations. So it is a bet of confidence in the likelihood of a Labor victory and these days it is probably a safe bet. It will be interesting to see how the betting markets react to this news.

In Slate today, various writers discuss their favourite fonts. This was partly a response to a new documentary on the font, Helvetica. Yes, a documentary about a font. You might find that hard to believe but I didn’t.

Fonts are a staple of my innovation class. There we study Mergenthaler Linotype, a company that survived four successive waves of radical innovation in typesetting as the market leader for a century. The reason for this persistence was that Mergenthaler made early investments in font development. By the turn of the Twentieth Century they had 100 fonts, by 1913, 1000 and double again by 1923. It would take 20 years for entrant to duplicate this investment.

One of Mergenthaler’s fonts was, of course, Helvetica. According to myfonts, it is still one of the Top 10 best selling fonts. Linotype still holds 5 of the Top 10.

Now it would be remiss of me not to point out my font preferences. The Slate writers appeared to favour Courier but that isn’t trying. For academic papers I use Times New Roman. For talky papers I use Book Antiqua. Finally, for consulting reports, I go with Garmond. And of course you can see my blog font here.

There have been lots of new readers of this blog in the past couple of months. I just thought I would draw your attention to a few features that you may not have been aware of. The first is the interesting posts list (on the sidebar to this blog). These are posts that I have read elsewhere and have tagged as interesting in Google Reader. They generally relate to the themes dicussed on this blog but with considerable economy. For example, Google tells me that over the last month I have read 9.175 (!) posts. In doing so, I have tagged 20 as interesting. So if you don’t regularly read lots of stuff, you might find my paired down but biased list useful. Click here for the posts directly or, if you want, the feed is available here.

Second, there is the Core Economics Bookstore. This where I put links to where you can purchase books, DVDs and other things mentioned on this site from amazon. Amazon give me vouchers for this that goes into buying more books.

So I upgraded my laptop this week and the new one has Vista. Nothing wrong with that except that it turns out that Optus doesn’t support it and so my 3G Mobile Wireless Card and subscription became useless. I should have checked. Anyhow, so I have dumped it and went for the Telstra NextG option that does support Vista. I bought that less than 15 minutes ago and am now on-line in a cafe cruising the net at speeds of 2.1Mpbs (not quite 14.4 but darn fast) and even 333Mpbs uploads which is more than I get on Big Pond Cable Extreme at home. Not bad at all. See, Telstra does very well when it faces competition.

Today, over at Club Troppo, Nick Gruen and I engage in a shootout over Office 2007. I am for and he is against. I get the last Word!

25th May, 2007, marks the official 30th birthday of Star Wars. (It opened on that day in the US but I am sure many months later in Australia). I remember going to see it with my father and my younger brother and, suffice it to say, like so many others, it had a major impact. In those days, you would only get to see these things at the movies and it was rare to see something more than once. But I remember over the course of the next year seeing it another three times (alot for us), reading all the books and getting the toys. (Indeed, I still have the die cast metal Millennium Falcon and Star Destroyer). Each time I spent considerable effort trying to remember every scene. We saw it again some 5 or so years later when it was re-released, another time at Uni, and then back in 1996 when a new version was brought out. During that time there were some video showings but it wasn’t until the DVD came out that the power of replication was felt. My eldest daughter became obsessed — who says it isn’t genetic — and all of the movies went on high rotation for a year. Given all that I wouldn’t be surprised if I have seen the first movie over 30 times; an average of more than one per year.

With all of this, one might think that this might have impacted upon my economics life but I can’t really think of how it has. I do recall having tickets for the opening screening of The Empire Strikes Back in Brisbane but couldn’t see it because the projector operators went on strike. It was many years before I fully reversed my view that unions were part of the dark side. And I did have this piece in the Journal of Political Economy last year. But let’s face it, there isn’t much in those movies that is economically relevant even if there is some trade dispute motivating Episode I but we try not to talk about that.

The Australia Institute has a new study (I haven’t read it because it is not freely available; what do you know, demand curves slope downward). It wants an immediate $30 greenhouse gas charge on airline tickets to reduce demand for airline travel and promote innovation in aviation. But the odd thing is the reason for all this: apparently if Australia reduces its greenhouse emissions by 60 percent, airline emissions will comprise the bulk (maybe 51%) of what’s left. My reaction to this was: so what? Read more

Suppose we have a public service that can also be provided privately. Suppose that we partly subsidise the private option. Then every person who chooses the private option over the public one will be, in effect, be saving the public money. Some of that they get back in reduced taxes but the tax reduction (or expenditure elsewhere) benefits others. What this means is that if you were to stop the subsidy, people would go back to the public option and so that tax benefit would be lost. And if the people who would otherwise choose the private option are richer than those who do not, it is the poorer who are suffering disproportionately from the removal of the ‘subsidy.’ Read more

For reasons best explained by my last post on this topic, I remain overly interested in the prices of DVD players. The price back in December was $38.00 (at JB Hi Fi). Today’s K-Mart catalogue came in the mailbox with a price of $29.99 for an Audiosonic 2.1 channel DVD player. It looks pretty small too. 

This is so true. In the New Yorker, James Surowiecki writes about ‘feature creep.’ This is the tendency for products to have ‘too many’ features. More than anyone really needs. The prime example is Microsoft Office 2003 that had so many features that when Microsoft wanted to upgrade it, it asked existing users what they wanted and in many cases, they wanted stuff they didn’t know that they already had. The next version of Office was a great improvement in my mind but Nick Gruen disagrees. But the tendency to bundle more features is very strong. Read more

The ACCC has today sent out responses to those who wrote to it about broadband. Nothing surprising in it given what the ACCC has said elsewhere. The only amusing bit was the title of the Word file containing the letter: “ProACCC.doc”.

Peter Martin attempts to answer some of my questions on the Future Fund. His investigations confirm what economics strongly suggests. It is a name not a commitment.

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