Tuesday, June 06, 2006

Queering the Results was Not Specifically Prohibited

On the problems of electronic voting....Where will Alex go to school?

An excerpt:

As for the question at hand -- Where will Alex go to school? -- the will, chutzpah, and bodacious craft of the voting public will be respected. A careful check of the applicable rulebook indicates that queering the results was not specifically prohibited. And by tradition, engineers, hackers and techfolk will assume that in a problem-solving situation of this nature, there is no box out of which they are not expected to climb. The Doonesbury Town Hall thanks all those who took the time and trouble to vote, even those who voted only once.

Ms. Doonesbury will be attending MIT.

(Nod to RL, who after all went to Rochester)

Podcast Bears Fruit: Opportunity Cost is Not An Easy Concept

A note from a loyal listener (actually, a loyal listener to Russ Roberts' terrific PODCASTS, of which I was privileged to do one).

I found your podcast discussion of ticket scalping pretty interesting. I particularly enjoyed the part of the conversation where you two discussed the mystery of gift-giving;, why do people prefer to receive a gift rather than money, even though the standard econ model might lead one to believe that the recipient can be made no worse off by the money, and probably better off?

That particular puzzle reminded me of something that happened to me about a year ago. My Mom had asked me to pick her up and take her to the airport, as she didn't want to pay to leave her car parked at the airport for 3 days. I thought about it and realized that I valued my time more than the cost of parking her car, so I offered to pay for her parking, rather than drive her. I thought that was a perfect solution, though my mom didn't quite agree. She was pretty offended. I started thinking about it, and realized that a lot in life is like that. Most of us think little of asking a friend to help us move, but would never ask a friend for the money to hire a mover (even if our friend would *prefer* to hire a mover, rather than help himself!).

I wonder what's going on in these situations? Steven Pinker has referred to two distinct types of exchange - one refers to impersonal market-type exchanges, and the other refers to familial-type exchanges. I wonder if the conflict is caused by a confusion of the mores that govern each type of exchange?

I love the podcasts...they're the only thing keeping me sane during my long drive from Akron to Cleveland. Thanks!


Michael Stack

That really is interesting, and very true. My parents had no conception of their time having any value, because it really didn't. Raised in the depression years, ANYTHING they could do to save money was worth it.

But if my time has a value of $50/hour (and it surely does, or more), then it costs me $100 or more to drop off my wife and pick her up at the airport. (She travels quite a bit on business). So, she takes taxis. The accounting costs are higher ($50 for round trip taxi from Munger castle to RDU, compared to nearly zero for the MM shuttle), but the real costs are less.

You just can't help some people.....

From THE HILL, the DC publication

A Foxx in the luxury world
By Jeff Dufour

One of the most egregious examples of abuse that came to light last year during the aftermath of Hurricane Katrina was displaced people and other victims spending their government-issued debit cards on Louis Vuitton purses and other luxury goods.

And Rep. Virginia Foxx, the grandmotherly freshman Republican from North Carolina, has had enough. Foxx has introduced an amendment, known as the "Louis Vuitton Amendment," to the homeland-security appropriations bill that would specifically restrict that type of misuse of funds.

It reads, quite simply, "None of the funds made available to the Federal Emergency Management Agency in this act may be used to purchase a Louis Vuitton handbag."

Foxx spokeswoman Amy Auth explained that the language is designed to "highlight the abuse that occurred with the debit cards last year so that it doesn't happen again."

A spokeswoman for Louis Vuitton did not return phone calls. Perhaps she's offended that anyone would pay for one of their bags with a debit card. How déclassé!


An interesting question, from an economics/libertarian perspective: suppose that a destitute person thinks that an LV handbag is THE most important possession of all, and would spend food money to get said bag. Should the state outlaw this? The debit cards were not food vouchers, but rather are simply subsidized cash.

So, is the problem the LV handbags, or the debit cards themselves? Libertarian minds want to know....

(Nod to JP, who rumor has it wears Louis Vuitton boxers)

Monday, June 05, 2006

Hoax? Or Is the Left Just Phoning It In Now?

Greenpeace's fill-in-the-blank public relations meltdown

Before President Bush touched down in Pennsylvania Wednesday to promote his nuclear energy policy, the environmental group Greenpeace was mobilizing.

"This volatile and dangerous source of energy" is no answer to the country's energy needs, shouted a Greenpeace fact sheet decrying the "threat" posed by the Limerick reactors Bush visited.

But a factoid or two later, the Greenpeace authors were stumped while searching for the ideal menacing metaphor.

We present it here exactly as it was written, capital letters and all: "In the twenty years since the Chernobyl tragedy, the world's worst nuclear accident, there have been nearly [FILL IN ALARMIST AND ARMAGEDDONIST FACTOID HERE]."

Had Greenpeace been hacked by a nuke-loving Bush fan? Or was this proof of Greenpeace fear-mongering?

The aghast Greenpeace spokesman who issued the memo, Steve Smith, said a colleague was making a joke by inserting the language in a draft that was then mistakenly released.

"Given the seriousness of the issue at hand, I don't even think it's funny," Smith said.

That's their defense? "I don't even think it's funny"? Where's Michael Mooore? It was HIS thesis that scare-mongering is the tactic of the right.

It strikes me that the left is becoming more and more reflexive, and formulaic. They LOVE having GWB as President. They don't have to do anything but feel smug. And every time unemployment goes up, it makes the left happy. It just means the revolution (which the left plans to watch on TV) will come that much sooner.


(Nod to JP)

Self-interest is malleable, but the pursuit of it is not

Nice article by Russ Roberts, at EconLib.

Towards the end of the 18th century, England began sending convicts to Australia. The transportation was privately provided but publicly funded. A lot of convicts died along the way, from disease due to overcrowding, poor nutrition and little or no medical treatment. Between 1790 and 1792, 12% of the convicts died, to the dismay of many good-hearted English men and women who thought that banishment to Australia shouldn't be a death sentence. On one ship 37% perished.

How might captains be convinced to take better care of their human cargo?

You might lecture the captains on the cruelty of death, and the clergy from their pulpits did just that. You might increase the funds allotted by the state provided to the captains based on the number of passengers they carried. You might urge the captains to spend more of those funds for the care of their passengers. (Some entrepreneurial captains hoarded food and medicine meant for the convicts and sold them upon arrival in Australia.) You might urge the captains to spend the money more carefully. Shame them into better behavior.

But a different approach was tried. The government decided to pay the captains a bonus for each convict that walked off the boat in Australia alive.

This simple change worked like a charm. Mortality fell to virtually zero. In 1793, on the first three boats making the trip to Australia under the new set of incentives, a single convict died out of 322 transported, an amazing improvement.

I don't think the captains got any more compassionate. They were just as greedy and mean-spirited as before. But under the new regulations, they had an incentive to act as if they were compassionate. The change in incentives aligned the self-interest of the captains with the self-interest of the convicts. Convicts were suddenly more valuable alive than dead. The captains responded to the incentives.


Munger's "Fundamental Human Problem": How do we design, or maintain, institutions that make self-interested individual action not inconsistent with the welfare of the community?

Marcuse's rules for journal editors: Speech be free, be it agree with me!!

From the FREAKONOMICS blog (excerpt):

Your editor is deeply distressed by the style of the TSSM. In particular, consider the following incident: Several weeks ago, I encountered a thin-skinned scholar, who was driving in his car as I walked to my own car in a parking lot. Apparently unimpressed by the writings of Miss Manners, this scholar opened his car window, loudly and repeatedly declared strong views about the composition of my head and the phylum in which I should be classified, and rapidly drove his car so close to me that it did, on the third such maneuver, brush against my pants. I wonder still, is this thin-skinned scholar just a talented and kind-hearted stunt-driver with unusual ideas about parking? Or does he reveal true malice, a will to evoke fear and a willingness to use his car to damage a pedestrian? These are questions that I cannot answer. But answers are suggested by his emailed statement (with copies to others) that he would be pleased to see my body lifeless and in pieces. More to the point, these are questions that no editor should have to consider. This thinskinned scholar has wasted great volumes of an editor’s time and effort, reviled the editor in numerous hostile email letters (with copies sent to a variety of others), delayed publication of Sociological Methodology, wasted hours of time by talented and highly-paid lawyers, and badly strained relations between an editor who sought to uphold the principles under which scholarly journals are published, and the ASA executive officer, who sought to save the ASA the expense and trouble of a lawsuit by an enraged scholar.


I did have one incident so far as Editor, of Public Choice. I had turned down a paper, with perhaps more of a flourish than was required. I suggested, without sending the paper out for review, that the paper was so far beneath the standards of the journal that no reviewers' time should be wasted. It was just worthless.

Inexplicably (perhaps because the author was cited by someone else, a fecund setting for finding new referees?)(*), three weeks later I asked THIS SAME ABUSED AUTHOR if s/he would review a paper for PUBLIC CHOICE.

Abused author replied, in hurt but humorous terms: "Is there not a contradiction in the claim that my paper was so bad it could not be reviewed, followed by an invitation for me to review the papers of OTHERS? I would be flattered, if I were not simply confused." Yes, well, bother. I apologized, and pledged not to trouble the aggreived amore.

*In which case, NOT inexplicably, since this would be an explicabation.

(thanks to JAR, who is thick-skinned. thank goodness.)

Saturday, June 03, 2006

Sure: It Briefly Lifted the Roof Off the Bungalow

Quite a story. Sometimes, things just get out of hand.

A teenager left at home while his parents were on holiday decided to do some washing - and ended up blowing the roof off and causing £35,000 of damage.

In a freak string of mishaps, Sean Davey, 18, left a washing basket full of clothes on top of the electric cooker. He then accidentally knocked one of the hob controls, turning on one of the rings, before going out to meet friends.

The heated ring set fire to the basket of clothes which, in turn, heated a nearby bag of shopping that his sister Nicky, 20, had left for her brother earlier in the day.
And that caused a can of Sure deodorant to explode with such force that it not only blew out windows but cracked a wall and even, briefly, lifted the roof off the bungalow.

Three fire crews tackled the blaze in the home at Caister-on-Sea near Great Yarmouth, Norfolk, on Sunday evening. Firemen rescued one of the family's labrador dogs while the other one escaped of his own accord and reappeared, somewhat shaken, eight hours later.

Joanne Bray, who cut short her holiday in the Scottish Highlands with her husband Paul when they heard of the disaster, said yesterday that structural damage to the building was estimated at £20,000 with another £15,000 needed to repair fire and smoke damage inside.

"Sean phoned me and said: 'Mum, the house is on fire.' I have forgiven him because it was just one of those unfortunate accidents. I am just grateful that he and the dogs are alive and well," said Mrs Bray.


Political Graveyard

So, my wife (last name, before and after marriage: Gingerella; her motto is, "Why don't YOU change YOUR name?") asked me if there had ever been "a politically successful Munger."

I did not say, "before ME, you mean, dear?"

Obviously, the place to go to answer such questions is THE POLITICAL GRAVEYARD.

Here's one useful entry:

"Munger, William S. — of Michigan. Republican. Candidate in primary for Michigan state senate 18th District, 1952. Still living as of 1952."

Well, that is a minimal kind of success: Ol' Bill Munger ran for Michigan state Senate, and did not actually die during the campaign. He lost the race, but he didn't die. You takes your victories where you gets 'em.

I would have to say that the biggest success story is Willard Munger. Check this:

Munger, Willard (1911-1999) — also known as "Mr. Environment" — of Duluth, St. Louis County, Minn. Born in a log house, Otter Tail County, Minn., January 20, 1911. Democrat. Member of Minnesota state house of representatives, 1955-64, 1967-99; defeated, 1934, 1952; died in office 1999; delegate to Democratic National Convention from Minnesota, 1960; candidate for Minnesota state senate, 1964. Served in the Minnesota House longer than anyone else in the state's history. Died, of liver cancer, in the hospice unit of of St. Mary's Hospital, Duluth, St. Louis County, Minn., July 11, 1999. Interment at Oneota Cemetery, Duluth, Minn.

Now, that is a political career. He served in the Minnesota House for 41 years. I bet Mrs. Environment was getting a little sick of those tuna hotdish dinners at the Duluth Rotary Club long before the end. But Willard stayed in office until there was no more Willard.

He left a legacy. The Willard Munger Inn. The Munger Trail. A biography, written out of respect and gratitude for all those years of service. An obituary to be proud of.

Now, when I started this post, I was just mocking the idea of political success. Things we can't have, we make fun of. But by the time I actually learned something about Willard Munger, I have to admit I'm proud to have the same last name.

Willard Munger, here's to you: the greatest political Munger of all time.

The Rawls Experiment, Part II: It was an open bar...

A friend here in Raleigh (though soon moving to DC), sent the following email:

Okay, I was a bit loosey-goosey with the methodology but consider the following field data. (It was an open bar, I moderated and participated, there is no way to repeat the test under the same conditions etc.)

Last week we hosted state regulators for four days of economics boot camp. One evening, before loading everyone up on a bus and carting them off to an awesome dinner at La Cantina in downtown Aspen, I borrowed (with attribution) your classroom experiment. (for those interested in the Munger version, look here)

The scene: half a dozen state regulators; approximately half a dozen professional academics with backgrounds in law or economics (NIE and experimental folks) and myself. We had two extra tickets that given the outcome of the vote, I decided to just throw into the "pot."

I proposed the following rules for our experiment: a) anyone may opt out; b) if you opt out, then you may not vote; c) a vote would be taken to establish a rule of action which would be binding on everyone and a simple majority would carry the vote; d) the vote was to determine if we would socialize the winnings of 15 lottery tickets and share the prizes equally or if we would each take an individual property right in a randomly assigned $1 scratch ticket that I had purchased and would provide at no cost; e) warehousing was disallowed -- everyone would scratch at the same time and we would pass out any winnings at dinner.

Everyone wanted to participate. Only two people voted to have individual risk-reward and 11 (5 of 6 regulators and all of the academics) voted to socialize benefits. After the vote, a few enterprising folks discovered that there was a 1 in 4.68 chance of breaking even on any given ticket. After scratching, we had two tickets win $1 each and one ticket win $40.

Net result: A recently tenured assistant professor from George Mason voted to socialize winnings and as a result "lost" out on $36+ while everyone else came out ahead. As a sample, I'm willing to go out on a limb and generalize to say that regulators and academics are willing to take low payoff/high probability options over high payoff/low probability options. Your students were less risk averse. We can hypothesize as to where Rawls influence lingers the most.

Recovery: I had anticipated the "lessons" of the experiment to be things like how consumers are capable of making decisions with limited information, the decision rule (simple majority v. unanimity v. super majority) was important, and while socializing risk and reward may help some people, it comes at a cost to others. If these points failed, I planned to simply say "Boy that was fun; let's go eat." But given the circumstances and outcome, I focused on the decision rule, the transaction costs that would have ensued if we needed unanimity and externalities since some folks volunteered that their vote would have changed had it been their dollar plunked down on the ticket.

Discussion tid bit: Several people commented during the discussion that they were slightly worried about how they would "look" or "feel" if they won a hundred dollars but had voted to keep it all to themselves since the whole experience was "random or by chance." It was observed that this "feeling" would have dissipated if they had earned their lottery tickets or paid for them. This social pressure sparked a short investigation of rational but non-profit maximizing behaviors in the marketplace.

Anyway, I'm just a policy guy trying to change the world a bit at a time. And, I don't mind a little fun and a good dinner at La Cantina. I have no regret about the methodological sloppiness although the lopsided vote suggests that the program is not being as successful as I had thought in instilling the virtues of property rights etc.

Thanks to Kent Lassman, and good luck serving the public weal.