(Almost) The Triumph of Game Theory at the Super Bowl

One of the amazing things about the Super Bowl game this past weekend was that both coaches understood that the Patriots would be better off if the Giants scored a touchdown late in the game and reportedly instructed their teams accordingly.  To my mind, this represents a high point in the prevalence of strategic thinking. 

Was the failure of Ahmad Bradshaw to follow through on his coach’s instruction merely a failure of execution?

But I wonder whether the Giants failed to strategically optimize on the very next play selection.  With about a minute left in the game (and with a timeout remaining for the Patriots), the Giants choose to go for a two-point conversion.  My question is not about whether they should have kicked a point after.  No, I wonder whether they might have done better by handing the ball to a swift runner, who might have even more perversely attempted to forgo scoring two points and instead tried to burn as many seconds off the clock as possible by merely running away from the other team (toward, but not into, the other endzone!).  

What Makes Chuck Skinny?

Weight Watchers has ads in heavy rotation with Charles Barkley saying: “lose weight like a man.” 

You can also hear him mention his success in his Saturday Night Live monologue.

Something is working. Since starting WW, he’s lost 38 pounds. But what about the Weight Watchers program that has him shedding so much weight?

Is it the group weigh-ins?

Is it the famous Weight Watchers point system? 

Or is it something else?

Of Lags and Caps: Possible Implementations of a Brandeis Tax

Last Monday, Aaron Edlin and I published a cri de coeur op-ed in the New York Times calling for a Brandeis tax, an automatic tax that would put the brakes on income inequality. This is the third in a series of posts (the first and second posts are here and here) explaining more about our rationale and providing more details on how a Brandeis tax might be implemented. You can also listen to my hour-long interview on Connecticut Public Radio’s “Where we Live” here.

Of Lags and Caps: More Details About Possible Implementations of a Brandeis Tax
By Ian Ayres & Aaron Edlin

Remarkably of the hundreds of emails we received in reaction to our op-ed, almost no one questioned Brandeis’s idea that we can have great concentrations of wealth, or democracy but not both. People questioned other aspects of our proposal, asking questions like (1) how would it work in a world of income bunching; (2) would people still have the incentive to work hard; and (2) is it fair to have very high tax rates on the affluent.

Our last post talked about alternative potential triggers. Here we tackle some more detailed questions about implementation including how to trade off different kinds of distortions.

An Inequality Tax Trigger: The Brandeis Ratio Explained

On Monday, Aaron Edlin and I published a cri de coeur op-ed in the New York Times calling for a Brandeis tax, an automatic tax that would put the brakes on income inequality. This is the second in a series of posts (the first post is here) explaining more about our rationale and providing more details on how a Brandeis tax might be implemented.

An Inequality Tax Trigger
By Ian Ayres and Aaron Edlin

A central idea behind our Brandeis tax proposal was to have a tax that is triggered by increases in inequality. Our Brandeis tax does not target excessive income per se; it only caps inequality. Billionaires could double their current income without the tax kicking in — as long as the median income also doubles. The sky is the limit for the rich as long as the “rising tide lifts all boats.” Indeed, the tax gives job creators an extra reason to make sure that corporate wealth does in fact trickle down.

There Will Be Rich Always: Finding a New Way to Think About Income Inequality

On Monday, Aaron Edlin and I published a cri de coeur op-ed in the New York Times calling for a Brandeis tax, an automatic tax that would put the brakes on income inequality. In the next few days, Aaron and I will be publishing a series of posts explaining more about our rationale and providing more details on how a Brandeis tax might be implemented.

There Will Be Rich Always
By Ian Ayres & Aaron Edlin

In one of the more memorable lyrics from the musical Jesus Christ Superstar (based on Matthew 26:11), Jesus tells his disciples “There will be poor always.”

The same is true of the rich. There will always be a top 1 percent of income earners. But what it takes to be rich can change drastically over the course of even a single generation. In 1980, you would have had to earn at least $158,000 to be a one-percenter; but by 2006 the qualifying amount had more than doubled to $332,000. (You can produce an estimate of your own household income percentile – albeit using a different definition of income that produces a much higher 1 percent cutoff – at this wsj.com site.) The rise is not due to inflation as both these numbers are expressed in inflation-adjusted, constant 2006 dollars.

NBA Players' Union Decertification As Owner Opportunity: What if Mark Cuban Had Gone Maverick?

David Stern ran roughshod over owners during the recent NBA lockout negotiations. He was willing to levy stiff fines for any public comments that might undermine an image of management unity.

But the league’s power to control dissident owners possibly changed on Nov. 14, when the union representing NBA players formally dissolved. The league treated dissolution as a bad faith bargaining ploy by the players to gain bargaining power. You see, sports leagues can engage in collusive conduct that would otherwise violate the Sherman Antitrust Act – so long as the collusion takes place as part of a collective bargaining agreement. By disbanding the union, the players were threatening to expose the league to massive antitrust liability.

The league treated the players' dissolution as though it had no impact on its control of team behavior. But imagine for a moment that one of the team owners took the players decertification seriously.

Tattoo Taboo

I was in Tokyo a few weeks ago speaking at IBM’s Business Analytics Forum. At 6:30 in the morning a few hours before my talk, I had a wonderfully rejuvenating swim at the Royal Park Hotel. But I was surprised to see a pool-side sign stating “Persons With Body Tattoos Not Allowed.”
I have swum at dozens of pools in the United States and have never encountered such a restriction. Is there any valid public health reason for tattoo discrimination? Is the pool policy driven by irrational health concerns (a la the early days of HIV hysteria)?

National Treasure 2.7 Deciphered

In one of my previous posts, I asked for help interpreting a rather bizarre dream imagining a new plotline for a National Treasure movie. These movies often involve deciphering secret codes, and so did my post. My [day]dream was actually an aid to help me remember 40 digits of the irrational, transcendental constant of Leonhard Euler, e.

Here is the dream again with numeric annotations in brackets:

Paying People to Quit: What Law Schools Can Learn From Zappos

My favorite incentives book tells the story of how after a week of training, Zappos offers new employees a one-time, one-day offer of a cash bonus if they will quit (As noted in the Freakonomics Radio hour, "The Upside of Quitting"). I describe this as an anti-incentive because even though the Zappos offer on its face gives employees an additional reason to quit, in practice it keeps employees on the job longer.

The vast majority of trainees turn down the offer during training – resisting the temptation to take the money and run. Then almost no one quits in the initial months after training because they’d feel like fools to quit for nothing when they could have quit for money. The cognitive dissonance would be too great. This is the power of resisted temptation.

But in a recent Slate piece, Akhil Amar and I deploy the Zappos idea for a different purpose – to reduce the concern that law schools are admitting students who are unlikely to pass the bar.

National Treasure Puzzler

During a break in my contracts class the other week I told the students about a strange dream I had. Here's what I said:

I don’t know whether it’s because we just read a case about the War of 1812, but I dreamed a kind of screenplay that begins with a tight close up with two identical faces of Andrew Jackson. As the camera pulls back, we see that the Jacksons are struggling to break free from being inside a cramped triangle. To make matters worse, we see that their bodies are jerking about because they are holding between them an electrified neon equation blinking “2+3=5”. The equation is encased in some kind of phosphorescent circle.

They aren’t willing to drop the circle, because on closer inspection one can make out a miniature Andrew Jackson who is trapped inside the circle. To make matters worse, out of nowhere an airplane swoops in and hooks the top of the triangle so that the Jacksons and the rest of the triangle’s contents are suddenly dangling in midair behind the aircraft.