• Recent Comments

  • Dudley Leggett on Dick Smith’s idea prize
  • dk.au on Ping’s big flaw
  • Joshua Gans on Ping’s big flaw
  • davidp on Ping’s big flaw
  • Ping’s big flaw : Core Economics on Romanticising books
  • Dylan on Newspapers, aggregators and the ABC
  • c-sez on Newspapers, aggregators and the ABC
  • Professor Robert Pope on Dick Smith’s idea prize
  • Dudley Leggett on Dick Smith’s idea prize
  • Dudley Leggett on Dick Smith’s idea prize

• Recent Posts

  • Apple misses the TV game again
  • What does HDR mean for photos?
  • Ping’s big flaw
  • China’s central bank governor and the USD
  • Newspapers, aggregators and the ABC
  • Toilet explorations
  • Signalling academic immobility
  • Gillard’s future if the coalition forms government
  • The right political career investment
  • A rant about ABC’s copyright policies
  • Tasmania’s 2 extra seats in the Constitutional gerrymander
  • Time to think about voting power
  • Well may we say …
  • The political landscape
  • Media and economics

• Popular Posts

  • Mathtype in Word 2007
  • China’s 2009 GDP growth
  • House price predictions
  • Exchange Rate forecasts
  • Free Insulation
  • Tax multipliers
  • Free insulation, yes pay nothing!
  • What’s “normal” anyway?
  • Bolt on electricity
  • Health insurance changes

• Twitter: Joshua Gans

  • @jodiecongirl Actually, it says more about you that you've heard of them! about 3 hours ago from TweetDeckin reply to jodiecongirl
  • @jodiecongirl I think it says that economists don't just assume rational agents but are attracted by them too. Talk about a value conflict. about 3 hours ago from TweetDeckin reply to jodiecongirl
  • @jodiecongirl Why uninteresting? Think of Alex P. Keaton, Quark , Sheldon and Dogbert. about 5 hours ago from TweetDeckin reply to jodiecongirl
  • RT @freakonomics: Freakonomics Movie is released via iTunes tomorrow: http://bit.ly/9YveA3 [I'm gathering the kids for a Friday night movie] about 6 hours ago from TweetDeck
  • Am I to understand that we are now in the path of a Hurricane? http://bit.ly/daitO9 This aint the tropics. about 6 hours ago from TweetDeck

• Readership

  

Following on from the theme of airline reviews, here are some things about JAL.

Things to like about JAL … a little camera that lets you see outside of the plane including on take-off and landing and toiletries bags for the kids.

Things not to like about JAL … only 14 video channels including just one for kids. That gives you 2.5 hours of a 10 hour flight!

Stephen Fry has a blog; I don’t need to say any more than that.

Some interesting news coming my way this week.

I was part of a team winning an ARC Linkage grant to study real estate markets (description over the fold).

This blog made a 100 academic blogs every investor should read list.

And, finally, the Economic Society of Australia at their conference dinner the other night officially certified me as “young.”

Read more

So I am here writing this post in a cafe in Mountain View. Thanks to Google it can be posted through the free Google WiFi that peppers this city. I am getting 654kbps downloads. What a wonderous thing. It is such a shame that WiFi is so scarce — paid or not — in Australia.

I was in Cafe Coupa in Palo Alto yesterday morning. This is a hotbed of Silicon Valley work action. Everyone has a laptop and a mobile phone on the table. Market shares for laptops were HP (45%) and Apple (55%). Market shares for phones were Treo (5%), iPhone (35%) and Blackberry (60%).

Dani Rodrik conducts an interesting exercise ranking blogging against academic popularity. His results are here. There is a statistically significant relationship between blogging and academic success (as measured by citations). It would be interesting to see how this played out in Australia. (Over to you, Andrew Leigh …)

One of the most consistently read posts on this blog is this one about Jetstar. Just look at the comments to see the impact of it. Today, Stephen Dubner posts this on the NYT’s site. He is not a fan of Delta. With regard to my post, it was written on the plane. I suspect the same was true for Dubner.

Now blog posts appear highly ranked in searches. Mine used to be on the first page of searches about Jetstar. Dubner’s will likely get up there too. This suggests that airlines are more vulnerable to customer complaints. The mixture of the complaint involving waiting time and the fact that finding out about different airlines using searches is commonplace add up to some brand issues.

So let me add another one — United Airlines. We were travelling from Boulder to San Francisco. We turned up 3 hours early but only just made the plane. Why? First, there was an hour long queue to access the electronic, touch screen check in. Yes, the electronic one. People were not to be found. Then there was another queue to get through security. The US system has gone from one where you could arrive 10 minutes early and get on a plane, to this. A sad state of affairs.

They do offer faster service in both queues for non-economy class passengers. The security one is a strange practice. Clearly, there is some subsidy going back to the government screeners. But why bundle this with airline service? Surely, it would be far more efficient and profitable for the government to charge consumers directly for faster queues. It would not involve any more ‘seeming unfairness’ than watching upper class passengers zoom through as they do now.

I have had a busy few days on the road and presenting some seminars. Last Friday, it was at the University of Colorado at Boulder. It is about 1.5 kms up and so after a few days I had some form of altitude sickness. Tomorrow, however, I am back at sea level at my old ground at Stanford. The seminar at both places involves new research on how scientists and their funders come to agreements on publication despite intrinsically conflicting preferences on that front and how things like strengthening IP and banning scientists from having commercial interests impact on publication. Bottom line: stronger IP is good for publication incentives and when scientists do not have commercial interests it is likely even better.

Well, as you may have anticipated, I laid my hands on a new iPod Touch. And a fine piece of equipment it is too. Now during meetings in places with WiFi access I can neatly surf the web without having an obvious laptop on the table.

Of course, this adds another power cable to my travel baggage. On this score, I note moves by phone makers to finally agree on a single charging standard. During our trip, I have had to carry out amess of cables for various things. Cameras, camcorders, iPods, laptop, Nintendo DSs and phones. Standardisation of power to one single cable to rule them all is critical. Phones are surely just the start.

A question: what is the similarity between Wyoming and Australia (and most of the world)? Well, apparently, you can’t buy an iPhone in Wyoming or, for that matter, Eastern Idaho. Apparently, they fall outside of AT&T’s wireless domain.

Nick Gruen continues to suffer with changing to Office 2007. I am still not sure what his problem is, I continue to love it. What is more, Microsoft have just launched the preview site for Office 2008 for the Mac. It looks like it will be their best ever. Once that is there, my migration to the Mac will be complete.

It is an interesting time for competition policy. The European Commission confirms its decision against Microsoft taking a hard stance on competition policy. Then, in an extraordinary move, the Treasurer, Peter Costello, proposes amendments to the Australian law to toughen up rules on predatory pricing. Pressures to strengthen predatory pricing rules have been around since the High Court rejected the ACCC’s case against Boral. The ACCC argued that for years Boral had priced below cost with the seeming purpose of eliminating a competitor. Both the trial and ultimately the High Court found that Boral did not have the requisite degree of market power with only a 30 percent share of the Victorian market at the time it was engaged in aggresive pricing.

So what does the Treasurer do? He appends something to the relevant section of the Trade Practices Act. That something prevents “a corporation that has a substantial share of a market” from supplying, or offering to supply, goods or services for a sustained period “at a price that is less than the relevant cost to the corporation of supplying such goods or services” if it has an anti-competitive purpose. The only apparent difference to the existing law is the substitution of substantial market share for substantial degree of power in a market.

Technically, this is a strengthening of the legislation but in a way that is unhelpful at best and harmful at worst. Put simply, for predatory pricing, it is the prospective market share a firm could generate by such conduct that likely matters and not what it may or may not have now. To be sure, defending an existing high market share is a motive for firms to deter entry by predatory contract but if entry is not deterred or is otherwise easy (low entry costs, regulatory barriers and the like) continually losing money on sales is something that corporation is not going to want to do for long in any case. This move outlaws that and so might be considered innocuous. But it is also possible that corporations considering legitimately purposed price reductions may think twice if there is a new entrant around.

In any case, this particular strengthening would have done nothing to change the Boral outcome. The Court found a current 30 percent market share and would be unlikely to regard that as a substantial. What is more, it was about Boral potentially gaining a future market share of 50 percent plus that was the issue and by virtue of its example, chilling entry across Australia. That is, the concern is, if anything, about future market power rather than current market power.

Now I don’t have time to go into this in more detail but you can read about my views here and here. What would have been preferable had the Treasury asked anyone at all (which they don’t seem to have done) would have been to add a US-style prohibition on attempts to monopolise a market to the Act. That would have much more chance of covering situations like Boral.

I have two big thanks to give today to Foxtel. (Surprised? So am I but credit is where credit is due). First of all, thanks for premiering High School Musical 2 on the Disney channel on September 22nd. It is straight to cable. No movies means that I don’t have to take my 8 year old to see it. After Steve Levitt’s review, I am thankful for that. I had avoided the first one for a good year.

Second, thanks to Foxtel for providing a means by which I could log in to my Foxtel iQ and schedule it to record said, High School Musical 2 while we are out of the country. Without that, all would have been lost.

For the past two days I have been completely off the grid. We were travelling through Yellowstone National Park in the US which, by the way, is wonderful. It has all of the ‘natural’ attractions that Disney might put into a park that was similarly themed but with authenticity. Of course, Disney would have provided both WiFi access and mobile phone coverage. Our party had an Optus and Telstra phone between us and got nothing. Sadly, this meant that we were left to fend for ourselves with early 1990s technology in communicating with our travelling partners who were equipped with working iPhones and Blackberries. It made for a trip that was far less integrated than we had hoped. For example, we missed a key bear sighting.

Anyhow, a few hours ago, we came out of the wilderness and back into mobile range. My Blackberry chirped itself silly as emails arrived. And with each chirp I felt myself being restored to a whole. It is good to be back.

So it seems that the iPhone price drop rebate can be used for iTunes store gift cards. One of the best things to watch on an iPhone — I know now because I have seen it in action first hand — is The Office. That means that Apple won’t be pocketing the rebate much at all. Ironically, most of it will go to NBC.

Google has entered the political fray in Australia with a site collecting information for the 2007 Australian election. Did I miss something? Nothing has been called. It might be 2008.

Anyhow, there are some nice tools including some maps of the political landscape.

Now which political parties will end up bidding for the adsense?

I am writing this post from an iPhone. Edge works well by the keyboard takes some getting used to. This is as good as the hype

Gambling has popped back into the news. Just a little before, I wrote this in BRW:

Thinking further afield, consider the problem of gambling. The Productivity Commission estimates that the social costs of gambling are in the billions and that controlling them would be well worth any cost of revenue and taxes. But how do you do it? It is very hard to monitor individual gambling habits and choices. But what if information technology can assist here?

Around the world various solutions are being trialled. Smart cards can be used to put pre-set spending limits on gamblers. However, research in Nova Scotia Canada has show that this is only good in so far as gamblers can’t just get another card.

Alternatively, a simple USB key with a finger print sensor can register gamblers and send the information back to a centralised system. They can then monitor behaviour and put in various steps to stop people from getting carried away. For example, individuals could set daily or weekly spending limits. Exceed this and the system knows and puts a block on the individual concerned. Such innovations would be well worth trialling in the lead up to the Victorian government’s poker machine tender.

Harry Clarke argues, and I agree, that we need to look to State governments to get off the revenue juice from this. What is more, inject a bit of competition between providers at the same time and maybe the withdrawl symptoms on those governments wont be so great.

One good thing about the US these days is that there is usually free internet in hotels (like the connection I am on now). But that doesn’t mean there is an absence of price discrimination. In my hotel in Salt Lake City, you can connect for free but need an Ethernet cable. Either you bring one yourself or the hotel will lend you one for $10 a night.

So there is effectively a $10 charge. But they have set up the connection so that there is clearly an Ethernet cable wired from the connection on the desk in the room to the wall. Unplug that connection and you don’t need to rent or bring a cable.

This is price discrimination based on idiocy. The less you know about such connections the more you pay. Of course, this has a wonderful efficiency. Chances are that if you don’t pass the in-room hidden cable test, you are more likely to need technical support. So the system works efficiency, those people should be more.

The 12th June, 2008, is going to have the most number of babies born on a single day in Ulyanovsk’s (a region of Russia) recorded history. Why? From news.com.au …

Ulyanovsk Governor Sergei Morozov has declared September 12 a Day of Conception, and is giving couples time off from work to procreate. Couples who give birth nine months later on Russia’s national day ? June 12 ? will receive money, cars, refrigerators and other prizes.

So not only will anyone who has a choice try and have a baby on 12th June, nine months or so earlier people are going to attempt to be ready to go about that time and so that month will likely be a high birth rate month. So it ads that dimension to the issues we saw in Australia. A bad policy, indeed, for any beleaguered maternity wards in Ulyanovsk.

Update: Apparently, this happened last year. According to Slate the result was …

So, will Russia’s Day of Conception have any effect? Seventy-eight babies were born in Ulyanovsk province’s hospitals in the month of June after last year’s whoopee holiday. But that’s just a 4.5 percent increase from before, and the limited measure probably won’t make a dent in the population decline. The bar was a little higher back in the 1940s, when Stalin declared any woman who gave birth to 10 or more children a “Hero Mother.”

There have been a few little snippets related to stuff that has appeared in this blog.

• Daniel Engber cottons on to the missing population question in global warming. This is something I have written about here and here.
• The Netherlands’ Competition Authority says what we all knew, that Apple was not tying its iPod with iTunes. Why? Because you can play non-iTunes songs on an iPod and can play iTunes songs on other things such as a computer. Ta da!
• iPhone unlock is taking Australian orders. I think I’ll wait on that one until the price drop; although Steve Levitt seems to think that people will actually shy away from companies that are seen to make a profit. We in Australia would have paid good money to be screwed by Apple on the iPhone.
• Lego have notified me that my Millennium Falcon will be shipping soon. That is 5,195 pieces of fun. It will look great but way out of proportionate scale sitting next to this one that I made a couple of years ago.
• And if you watch last week’s episode of The Chaser (which I finally did), they attempted to breach APEC security then too but with less success. So they were repeat offenders and still got through. Also, Melbournians are happy with increased security.

Over at Game Theorist, I am drowning in new paperwork.

So there is apparently a debate about The Chaser’s APEC antics. According to this report, APEC security actually asked The Chaser not to do anything. So, not only did they expose security with their prank, they were surely on the list of people the police (a) knew and (b) were looking out for. What this means is that it appears that the security was relying on the more stringent penalities in the APEC security legislation than would normally be the case. This is pure Gary Becker; increase penalties so you don’t need to worry about enforcement as much. We should be both grateful and troubled by this one.

Click here while it lasts.

Apparently, Al Gore took a flight on a private jet and there is some sort of outrage. I have written before that so long as Gore actually offsets carbon emissions there is surely no harm in this. Megan McArdle isn’t so sure.

But another way of looking at it is that if Al Gore cares about the environment, and is willing to pay, say $500 to take the equivalent of a private-jet-trip’s worth of carbon out of the air, then he ought to do so regardless of whether he has flown. He ought to buy all of the carbon offsets he feels necessary or affordable–and then reduce carbon still further by taking a commercial flight, or a train. Since Al Gore seems to feel that we should all do everything possible to reduce our carbon footprint, this is not unreasonable. Taxation is the solution to problems where you cannot secure the voluntary restraint of others; it is odd to try the same stunt on yourself.

It seems to me to perfectly reasonable for someone to preach a policy and not volunarily act as if the policy is place. Indeed, Gore doesn’t have to buy offsets or stay off jets if he doesn’t want to; although he asks others to do so voluntarily so that would be a bit much. Why do people find it so hard to deal with the behaviour of people in the public eye?

Next Page →

• RSS Feed

  • Subscribe to Main Feed

• The CoreEcon iPhone App

  Free! Click to download

• Email

  • Subscribe (Daily Edition)
  • Subscribe (Weekly Edition)
  • Subscribe (Kindle)

• Archive by Author

  • Andrew Leigh
  • Chris Lloyd
  • Christine Neill
  • Guest Contributor
  • Joshua Gans
  • Justin Wolfers
  • Kwanghui Lim
  • Mark Crosby
  • Paul Frijters
  • Sam Wylie
  • Stephen King

• Archive by Date

  September 2007

  M	T	W	T	F	S	S
  « Aug				Oct »
  					1	2
  3	4	5	6	7	8	9
  10	11	12	13	14	15	16
  17	18	19	20	21	22	23
  24	25	26	27	28	29	30

• Interesting Items

• Ads

• Blogroll

  • Christopher Joye
  • Club Troppo
  • Economist’s View
  • Economix
  • Freakonomics
  • Greg Mankiw
  • John Quiggin
  • Kalimna
  • Marginal Revolution
  • News for Econ Students
  • Paul Krugman
  • Peter Martin
  • The Dilbert Blog
  • Tim Harford

• Sites
• Core Research
• Parentonomics
• GameTheorist Blog
• Aussie Mac
• Centre for Ideas and the Economy