• 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

  

For those worried about Telstra CEO pay, some words of wisdom from Scott Adams. He draws from two studies the idea that happiness drives success while sadness drives productivity and argues that the best companies will make their CEOs happy by paying them lots and their workers sad by paying them little.

On page 10 of today’s Age, my ‘verdict’ on the Treasurer’s debate is given alongside other economists. Here is what I said:

WHO WON?

Wayne Swan

THE BEST MOMENT FOR COSTELLO?

When he gave credit to the previous Labor government for deregulating home mortgage interest rates and reducing tariffs.

THE BEST MOMENT FOR SWAN?

In calling for a new open, transparent and independent process for appointments to the Reserve Bank Board.

THE WORST MOMENT FOR COSTELLO?

In claiming their massive tax cuts were all about encouraging more labour supply despite the economy already being effectively at full employment with intrinsic skill shortages.

THE WORST MOMENT FOR SWAN?

When he confused his future job title with that of his US counterpart.

COMMENT:

The debate demonstrated that economic issues do not really separate the parties in this election save for industrial relations where Labor offers more government support of job security. If voters want to look for differences between the parties it is the social, conservationist and international relationships that loom larger than the economic ones.

The debate, if you can call it that, didn’t really have a winner. I just thought the question required an answer and I didn’t like the Treasurer’s rocking back and forth in his chair. In the end, I was left with the impression that this election didn’t have much to do with economics and decided that I have to steer clear of getting asked these sorts of questions.

There has been a spate of economically related popular, non-fiction books of late. But Super Crunchers by Ian Ayres is the pick of the bunch. It documents the increased use of large data-sets to uncover various facts about the world in policy circles, academia and even business. Put simply, with some careful thought, randomised trials can be conducted at the click of a computer key, allowing falsifiable hypotheses to be tested and challenge conventional wisdom.

The book is written in a journalistic more than an education style. The chief characters — the Super Crunchers — are portrayed as ‘super’ heroes. It is a bit of a stretch — I have met most of these people — to think of them this way but then again who am I to object to injecting some glamour into economics and econometrics. So we read about an ‘impish’ Joel Waldfogel who found out what prison sentences actually did to criminality; his colleague, the ponytailed Australian, Justin Wolfers, who uncovered seemingly bet rigging in basketball when preparing a class for MBA students; and the amusing Ben Polak who heroically used Bayes rule to work out what obstetricians should be telling their patients about risky tests. There is even an anti-hero but I dare not write about that one.

This book is essential reading for all business and economics students starting out. While Freakonomics has caught the limelight, Super Crunchers highlights the stuff that will really be relevant to day to day practice in economics. I can’t recommend it highly enough.

I have a short bit in the new on-line newspaper, Business Spectator, today. It is on the meaninglessness of US dollar parity [over the fold].

Read more

The fun continues in the public debate between NBC and Apple. This time around the NBC CEO comes out supposedly swinging. He wanted several things from Apple. First of all, he wanted to get a cut of iPod revenues. This is a bit rich because every show he sold on iTunes was effectively a cut of those revenues. If they didn’t think either (i) that was a viewer they wouldn’t otherwise have or (ii) they made more from Apple than they lost in advertising revenue in broadcast or from later DVDs, don’t put stuff on-line. Their new Hulu offering will be free but with ads; in other words exactly what they have now but without the ability to take it on the road or, by some means, go international. On that score, he sees convergence happening but is not going to facilitate it himself through a global Hulu for fear of upsetting international broadcasters.

Second, he wanted to experiment with a $2.99 show for one series. I must admit I would rather see that than nothing but Apple are clearly using the one price fits all model to commit themselves to being tough negotiators with publishers. Then again, the experiment we really want is advertisements on iTunes with a free download — you know, like Hulu but with a technology already rolled out. Apparently, that is too obvious for people to do rather than spend millions on a new site.

And on that score, NBC claims its iTunes revenues were $15m. That would put the entire iTunes video slot at $37.5m. This isn’t very much. But let’s face it, it doesn’t sound like enough to justify duplicative investment either.

Business Spectator has launched today; containing business news and commentary. The big useful thing is that it is accessible in contrast to the AFR and BRW that are not. It also features some of the glitterati of business reporting in Australia. It will be interesting to see how it goes. One to bookmark.

Roman Inderst and I have edited a special issue of the International Journal of Industrial Organization  on “Negotiations and cooperative arrangements in industrial organization: Models and applications.” You can see the articles here and access them if your institution has a subscription. There are 14 papers including ones some by very well known IO economists. You can read my introduction with Roman here.

I have a few words in the University of Melbourne Voice magazine about the important issues in the election [Reproduced over the fold]

Read more

I couldn’t help linking to Chris Lloyd’s post about whether Albert Einstein would have merited an ‘A’ listing for his group in the upcoming RQF. Apparently not given the cap between publication and visible impact.

I have previously written that I thought that iPhone margins prior to the discount were consistent with what one might have thought their price elasticity of demand to be (around -2). The discount seemed to imply that that elasticity was actually about (-3.37); which indicates some shift in consumer demand beyond first movers.

Now there is a report that Apple are making $18 a month from AT&T iPhone users ($432 over two years). At a unit cost of $280.83, that translates to an elasticity of about -1.51 (that is, a 1 percent rise in price will lead to a 1.5% fall in sales). That is a highly price inelastic good in that case. Although if it is true for every iPhone it suggests to me that there are more discounts still to come.

We are into our second day of the new Mac operating system. The new finder has allowed us literally to both find some old stuff long lost and to get rid of a whole lot of junk we didn’t need but had previously been too much a pain to use. The backup feature works but with multiple macs to one drive it isn’t as seamless as one would like. And, finally, the parental controls aren’t there yet. It involves lots of set-up and some strange bits (such as not allowing you to chat with your children easily over your own network). It would be nice of Apple put some more development there.

I do need to rave about the most amazing screen saver. It takes your photos and assembles them in sequence into a set of mosaics made up of other photos (much like this). What you see is a bunch of photos as they zoom out from just one. Then as each photo gets smaller and more photos are on the screen you see them form into another photo of yours. That photo eventually reveals itself and then is just one in the next mosaic as it is created. It is amazing and makes for a great guessing game of what photo will be formed next. Of course, we all know screen savers hardly save screens but this is a nice little gem.

There is an article on today’s Age querying what we have got in return for all the money spent on biotech’s in Victoria. Apparently, there are lots of critics out there. I questioned the whole premise of looking for start-up profits:

Indeed, says Joshua Gans, professor of management at the Melbourne Business School, “government funding of innovation is not purely to make money”. In fact, he says, “if it was appropriately done, it would be targeting the research and development that would be difficult to make money on, so you would never expect to see it making a whole lot of money”.

Biotech funding “adds value to the economy, which is a broader thing … a lot broader than a few little start-ups.”

Although I would not go so far as to say biotechs as a group should receive subsidies no matter what. I would target those likely to generate spillovers into other areas of government policy.

For Mac fans out there, I am now running Leopard, the latest in a strong of ‘wild cat’ named updates to Mac OS X. It is very nice. Runs quickly and has great folder accessibility through the coverflow and preview options. I have a networked hard drive so it turns out I can’t use ‘time machine’ yet. I’ll need some connected storage for that one.

One nice bit is ‘spaces’ which allows me to switch seamlessly between desktops — including Mac and Windows. There are also some excellent new screensavers. Lots of fun.

Breaking with usual practice, as of today, the University of Melbourne now has a choice of graduate schools for management/business and related areas.

or

Basically, it depends whether you want an MBA or one of a range of commerce degrees.

And yes, I know that Melbourne Business School used to be called the Graduate School of Management and that Macquarie’s business school is MSGM. But so long as we look behind the names there wont be any confusion.

It looks like Facebook will be switching to Microsoft for its ad provision in the future. I wonder if that has to do with ads like those to the left that I discovered on my Facebook page.

I have a new paper building on my work with Dennis Carlton and Michael Waldman that looks at tying in computer applications and specifically the EU’s decisions with regard to Microsoft and Windows Media Player. You can access the paper here.

Scott Adams has used predictify to predict how many copies of his new book will be in print. It’s an interesting site that allows you to get a crowd reaction on various questions. I had thought about asking the same question about potential Parentonomics sales but then decided I didn’t want to know the answer just yet.

Steve Levitt becomes obsessed with the spinning dancer I blogged about a few weeks back. Turns out that my puzzlement at its characterisation of economists seemed to bear out. Economists see it clockwise and what is more the less ‘rational’ your profession the more likely you will see it ‘counter-clockwise.’

I have a short piece today in The Age [over the fold]:

Read more

I have a piece in Crikey today on Labor’s child care rebate policy [over the fold].

Read more

Our government at work to help you plan your breaks

On Tribal Council last night, well, I wish it was that. A bit of abuse hurling is what we want to see in a ‘leadership’ debate. We want to see politicians do what we criticise them of doing everyday; taking cheap shots and engaging in personal insults. And what did we get with the debate: a bunch of rehersed short speeches.

Here is the tragedy, I watched the debate with my 8 year old, to get her interested in this stuff. She feel asleep and asked to go to bed! That never happens. She’ll watch anything on TV normally. No one thought of the kids when they decided on 90 minutes of bordom. Her line this morning: “I thought the debate was where they shouted at each other.” Absolutely.

Of course, the kicker came when the coverage ended (I was watching ABC) and they told us about the Channel 9 worm controversy. I so wished I had known Nine would do that. The worm would have brought the whole thing home giving it a key reality TV edge. That and I love the undercurrent hypocritical message from Channel 9 who for sued The Panel for rebroadcasting clips, themselves taking the feed from a supposed rival network!

A few months ago, the archives to the Dilbert Blog disappeared. Now we know why: much of it is to become a book.

Hang on a minute. Why is that a reason? Why couldn’t a book be published and sell even when there are archives around? Is the book adding no value? It seems to me that this either flies in the face of those who think that computers won’t substitute for books or that book publishers are still pretty stupid. Actually, probably both.

Archives allow some who search for topics to find isolated blog posts. Books collect them for reading a bunch of posts. It is a pretty different set of needs and consequently different customers. It is a shame Scott Adams agreed to play an old, irrelevant game. [It also means that next time I refer to his blog, I'll need to post more words from it, lest they disappear in the future.]

I guess I am an economist … hit big positive at the last dot point. [From humour at Econ Inquiry]

You might be an economist if…

• …you refuse to sell your children because you think they’ll be worth more later.
• …you’ve ever gone to a bank or other financial institution in the hopes of getting a date.
• …you’re an expert on money but you dress like a flood victim (from an old Dilbert, I think)
• …you watch “America’s Next Top Model” and vote for Cournot. (Ken Heyer, DC)
• …you can translate plain English into incomprehensible gibberish.
• …you think that “supply and demand” is a good answer to the question, “Where do babies come from?”
• …you plan to have your children born in December instead of January in order to maximize the discounted present value of the child tax credit.
• …you understood that last joke. (Bonus points if you can cite Stacy Dickert-Conlin and Amitabh Chandra, 1999, “Taxes and the Timing of Births”, JPE 107:161-77, or similar work from fellow UW grad JT Huang’s doctoral dissertation.)

So how many readers of this blog are economists now too? [By the way, Preston McAfee, the editor responsible for Economic Inquiry, was one of the first to use email to send around jokes over ten years ago. It last about a year.]

I had to read this news item several times. It was beyond belief.

The Copyright Board of Canada has approved new taxes on digital MP3 music files – at least for files that are downloaded legally.

The tariffs, to be charged to iTunes and other companies that distribute music over the Internet, adds three cents to the cost of individual songs that now sell for about 99 cents, and 1.5 cents per track for downloaded albums.

Meant to compensate artists for the reproduction of their songs, the charges follow similar levies that add 21 cents to the price of every blank CD sold in Canada. And they are retroactive to 1996, when Canada’s music industry first began pushing for tariffs on transmitted music files.

Yes, that is correct: LEGAL downloads will be taxed. How is this stupid? Let me count the ways. First of all, it is yet one more reason for Canadians to download ILLEGALLY — projected benefit to artists = 0. Second of all, this is is something the copyright owners could have just done themselves; so much for ‘compensation.’ If they wanted those price increases they could have negotiated them. Of course, if they could not get their customers to pay, then it is just expropriation of firms that have put efforts into a legal download option which seems even worse to me. Or alternatively, this is state sponsored collusion.

And one more thing …

And they are retroactive to 1996, when Canada’s music industry first began pushing for tariffs on transmitted music files.

Oh Mania!

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

  October 2007

  M	T	W	T	F	S	S
  « Sep				Nov »
  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	31

• 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