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• Readership

  

The NYT is reporting that NBC is not renewing its iTunes contract for TV shows. It is probably just a negotiating ploy — although it seems designed to get Steve Jobs not to mention The Office when new iPods are launched next week which, for some reason, NBC sees in its interest as it sells that show! Anyhow the loss of NBC will take that show and also the two other most popular downloads, Battlestar Galactica and Heroes off for next year. Based on past posts here about download TV, I know that some Australians use iTunes to download these shows (to attempt to pay for them) rather than do so illegally but for free. Again this makes little sense as NBC cited piracy concerns as one of its reasons to stop its contract. Sigh.

A Question: who is the best person to listen to on the economics of broadband?

Answer: No, it’s not me, it’s Shane Greenstein (who I have mentioned before).

So I figured it was time to look in and see what he has been saying recently.

• Economic experiments: Greenstein looks at the spread of ISPs and how pioneers learned lessons in how to construct business models that were quickly copied by others. Chief take-away: there are probably too few experiments taking place with irrationality (thankfully) driving those that do.
• Wikipedia: while lots of people are concerned about accuracy in Wikipedia, the chances are that it is very accurate relative to anything else when it comes to entries that do not appear elsewhere; such as “The Borg.”
• Broadband price drop: In the US, broadband prices plummeted in 2006. Why? AOL’s announced a price drop to rely more on advertising for its revenue. So it wasn’t so much as a price drop as it was getting someone else to pay.

And apparently coming this month is the $15b bump to welfare in the US (I presume per annum) from broadband. That translates to a likely contribution in Australia of about $1b per annum — hey, that doesn’t sound that high.

Those of you who read Club Troppo might have noticed the announcement that from time to time I may guest blog over there. I hope to do so but mostly for posts that are a bit wider than my usual eccletic interests on this blog. I’ll let you know if something goes there that isn’t here. For instance, Nick Gruen reproduced a ‘dinged’ article I wrote when I had a tendering column at The Age.

The mobile phone handset subsidy that has been the rationale behind locked phones (thankfully, not in Australia) and long-term contracts looks to end soon with the iPhone deals in Europe involving carriers giving 10 percent of their revenues to Apple. Sure, there is an implicit subsidy here in that Apple can then set their handset prices lower but the need to tie the phone and a particular contract seems no longer important. Of course, there could be hidden details so time will tell.

I have been reading a couple of biographies recently. The Strategist: The Life and Times of Thomas Schelling by Robert Dodge is a short book that looks at the contributions of Thomas Schelling, the 2005 Nobel prize winner in economics. Schelling plays a major role in formulating policy in the Cold War and in the process invented much of the useful applications of game theory that we see today. It is an interesting read; probably more so in parts for students interesting in learning about game theory than others.

Bill Bryson, who is most famous for travel books, has written a biography of Shakespeare. Bryson seems most attracted to the subject by the countless number of words (including countless) seemingly invented by Shakespeare (2000 in all) hundreds of which continue on in everyday English today. Let’s face it, it is much easier to write in verse if you can make rhyming words up.

The entire theme of the book is how little we know about Shakespeare given the volume of his writing that we have inherited. This isn’t some conspiracy book; it is anti-conspiracy and seeks to document only what we actually know. And what we know given that this is the millionth such biography is very little indeed. It is a good read.

These Canadians decided to launch their own space program. No people, just pictures. What more do you need?

I have written about Paul Romer’s work before. Here is a podcast that interviews Romer that outlines nicely the economics of ideas and knowledge.

Just check it out here. [HT: Peter Klein] Of course, that won’t apply to economics.

Just remember:

In an impactful environment, team-building of full-time equivalents requires opportunity size.

Amen to that.

I recall reading, during the 1980s, some bizarre futurology book called something like 2020 by a former Economist editor whose name I forget. What I do remember was his prediction that teenagers would become the major economic force in the future because they would know how to use those computer thingys. I was a teenager at the time and decided this was ridiculous.

Well, today, the teenagers appear to be back. In this case, undermining millions of dollars in investment to stop people using information technology in ways they might want to. First, a report that a teenager had broken AT&T’s hold on the iPhone allowing it to be used on other networks. Bad news for AT&T but likely good news for iPhone sales. Even better Apple wont have to worry about warranty repairs. Second, a report that an Australian teenager had cracked the government’s new web filters for adult content in minutes making that $84m of investment worthless. This is bad news apparently for the government (as the beneficiaries don’t vote) but good news for Telstra as it will fuel internet use.

I have made a submission to the Broadband Expert Taskforce on its draft guidelines for the selection of providers of high speed broadband infrastructure in Australia. My main point was that there need not be a single provider and that the taskforce should consider a process that allows local provision and bidding to occur.

Not sure what Microsoft are up to in search with Tafiti but the output sure is pretty looking.

My co-author Dennis Carlton is moving on from the USDOJ to the White House Council of Economic Advisors. A note from Global Competition Review:

Read more

Apparently, the AC/DC paper was a joke. Steve Levitt writes:

I am delighted to report that the economics paper on AC/DC I blogged about yesterday was meant as a joke. It takes a lot of work to run an experiment on real people, just for a gag paper. It turns out they meant to play the same AC/DC song in both treatments, but made a mistake and accidentally played two different songs. Thus the genesis of the joke paper.

I still think this leaves Professor Oxoby with a bit of explaining to do as to why they were playing AC/DC as part of an experiment in the first place, however.

 

It got some serious press too. I had my suspicions but the paper didn’t have the feel of one (maybe that was the point). Anyhow, Robert Oxoby got himself two New York Times blog mentions and a top 10 recent paper download on SSRN for economics; actually, that paper was downloaded twice as many times as all of his other papers together; which I guess will help his career. And, for me, I got lots more visitors to this blog and got to (unwittingly) fuel a joke around the net.

A paper by Jed Kolko looks at what happens when governments support basic broadband adoption (as opposed to the high-speed broadband that is the focus of recent debates). It turns out that this mainly assists in households conquering the ‘digital divide’ (accessing health information the like) rather than accessing socially desirable online activities (such as government services and job search services). Click here. Now if only there was somewhere in the world we could study to work out what the social benefits of high-speed broadband are.

The Stanford Business magazine asked me to write a piece on Susan Athey, winner of the John Bates Clark medal and my classmate at Stanford. It is in their August 2007 issue and is available here. (I previously wrote about her here).

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Today’s Australian Financial Review has another profile of the ACCC’s petrol inquiry (which begins today) and, once again, it focuses on the issue of shopper dockets. One of my submissions to the inquiry was on this issue. The AFR refers to my earlier work with Stephen King, now an ACCC Commissioner on the inquiry. The AFR quotes me as saying:

“What we were worried about is would it lead to higher petrol prices at the petrol pump,” Gans says now. He says they wondered of Shell and Caltex would be able to push up the headline price higher. Prospective customers could see price at 98c at Mobil but $1 at Shell and go to the Shell outlets. “Basically we thought that what would happen was not a real discount,” he says.

“They can try to tease out what the effect of the shopper dockets has been. It may well be that [they] were like a marketing gimmick and Coles paid for market share to come to them. But the economic logic tells us that probably wasn’t the case. Australia is the land of oligopolies. I don’t think anybody has been meeting in smoke-filled rooms. But there are other ways that prices can be co-ordinated.”

The Inquiry represents a huge opportunity for the ACCC to put the shopper docket issue under appropriate analysis and resolve the issue once and for all. Let’s hope they do it.

See also this piece in The Epoch Times.

This one is for the clearly I have now seen it all category. From Robert Oxoby at the University of Calgary, a paper entitled “On the Efficiency of AC/DC: Bon Scott versus Brian Johnson.” From the introduction:

… with respect to the rock band AC/DC, who is the better vocalist: Bon Scott or Brian Johnson? …

In this paper, we explore this issue. Since it is difficult to ascertain which vocalist was better given the heterogeneity of musical tastes, our analysis does not focus on the aural or sonic quality of the vocalists’ performances. Rather, using tools from the field of experimental economics, and we consider which vocalist results in individuals arriving at more efficient outcomes in a simple bargaining game. Our results suggest that having participants listen to songs by AC/DC in which Brian Johnson served as vocalist results in participants realizing more efficient outcomes. Thus, in terms of a singer’s ability to implement efficient behavioral outcomes among listeners, our results suggest that Brian Johnson was a better vocalist than Bon Scott.

Take that, supposed soothing effects of Mozart. I wonder what would have happened if they had also used The Wiggles’ version of “It’s a long way to the top”? As I re-read the paper, I have no idea what Oxoby was thinking when we decided to spend money on this experiment (low sample, who knows if it is the singer or the song, and, of course, is efficiency the criterion for vocalists).

On the other hand, this study puts Levitt and Dubner to shame in the ‘Super-Freakonomics’ department (which by the way will be an excellent title for their sequel).

[Update: Tyler Cowen is amused but Steve Levitt doesn't care much for the paper. I think it is probably more that he doesn't like the economic method rather than appreciate the debate. Maybe he is also concerned that it will lead to money spent on similar experiments in relation to INXS, Split Enz, Little River Band, Crowded House, The Wiggles and other bands from this part of the world that have had changes in line-up.]

Coming right after my own foray into YouTube for presentations, comes SciVee, an NSF sponsored initiative to make this the norm for scientific dissemination. The presentations thusfar were interesting but highlight one clear thing; those scientists ain’t no movie stars, what they are is what they are.

Just one post this weekend on Game Theorist where I look at the critical need for Google Calendar.

Recently, I have got myself a Facebook account and a little group of friends. It is an interesting phenomenon. Basically, whenever I meet someone these days I wonder if they are on Facebook. When they are I find out lots more about them.

But it occurred to me that for all our talk of privacy, the Internet and, in particular, Web 2.0, are creating massive incentives for identity building. You might want to be private but in order to deal with people and for them to know something about you, a ‘searchable’ identity really helps. This suggests a social cost somewhere in that there are people who might want to be more private but are forced to ‘play the game’ with a public profile. And, of course, when ever there is a value to a profile, there is also a value to a ‘distorted’ profile; another imperfect.

I am not sure how all this will play out but thought I’d share the thought. Just contributing to the identity over-supply!

Perhaps the thing that most interested the folks down at Parliament House yesterday was the prediction by my 8 year old daughter that the election would be held on November 17th. I think they must believe that she has inside information based on the primary school polling station network. We will just have to wait and see on that one.

I gave a talk today at Parliament House in the library seminar series. Using Apple’s new technology I was able to record my presentation and post it to YouTube. It isn’t the most engaging thing on YouTube but gets the point across. In case, you can see it at the link here to Part I and Part II. You will notice that I couldn’t get it in 4:3 for some reason so it isn’t perfect.

A nice little article in Slate about getting your means and medians right. It recounted this nice joke:

An old joke is illustrative here: 10 statisticians in a bar. Ted Turner walks in. The statisticians start to whoop and holler. “What’s going on?” asks Turner. One statistician explains, “On average, we just got a whole lot richer!”

Would it be that sporting records fell so quickly, but today we have a new world’s oldest person, Edna Parker. Yone Minagawa lasted six months at the head of the list, much better than her predecessor (only a few days in that position). I have blogged on this intense contest previously, here.

[Thanks to Bob Marks] The New York Times has a long article about a revolution in the font choice for US highway signs. The new ‘Clearview’ font is set to wipe out the traditional ‘Highway gothic’ font. I have written before about the font dilemma in writing but for signs it can potentially save lives or, at least, provide directions. 

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