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Archive for 2012

The Twitter I.P.A.

Almost a year ago, we posted here about patent trolling – when individuals and firms use patents as a tool to extract settlements out of defendants who wish to avoid expensive patent litigation, even when the target thinks it can ultimately win.

Because they can be so valuable, patents are a big source of litigation, especially in the tech industry. Apple and Samsung have been at each other’s throats over smartphone patents, as have Apple and Motorola. Microsoft has been battling with Motorola over whether its Xbox violates Motorola’s patents, and Microsoft has also threatened smartphone maker HTC.  Oracle sued Google, claiming Google’s Android cellphone operating system infringed on Oracle patents.  Microsoft sued Barnes & Noble, claiming that its Nook e-reader violates Microsoft patents. Apple and Google are now eyeing each other warily over “slide to unlock” technology that Apple has patented and accuses Google of copying in its Android smartphone operating system. Google, as a defensive move, paid $12.5 billion to buy Motorola’s portfolio of nearly 25,000 patents. 


Tourist Drug Ban in the Netherlands

As of May 1, it is illegal for foreigners to buy soft drugs in three border provinces of the Netherlands. This new constraint is especially restrictive in Maastricht, which lies only 20 miles from the larger German city of Aachen and only 60 miles from Brussels, Belgium. Before May 1, foreign “drug tourists” flocked to the 14 “coffee houses” in the city, paying €3 or so for a joint and lighting up (since this activity is illegal in neighboring countries). In protest against the law, all 14 houses have closed.


New Lawyers in New York Must Give First 50 Hours Free

Fascinating article in today’s Times, by Anne Barnard:

Starting next year, New York will become the first state to require lawyers to perform unpaid work before being licensed to practice, the state’s chief judge announced on Tuesday, describing the rule as a way to help the growing number of people who cannot afford legal services.

The approximately 10,000 lawyers who apply to the New York State Bar each year will have to demonstrate that they have performed 50 hours of pro bono work to be admitted, Chief Judge Jonathan Lippman said. He said the move was intended to provide about a half-million hours of badly needed legal services to those with urgent problems, like foreclosure and domestic violence.


One Less Reader

A reader writes:

You should do an article about how pop-ups drive people away from websites, even after the viewer opts out.  You can start with me and how I won’t be returning to your site, or reading your next book, or promoting it by word-of-mouth, because of your annoying “recommended for you” pop-up.

Do not respond to this email.

Sincerely,
XXXXXXXXXXXXXX


Why Fruit and Veggies Aren't Obesity Cure-Alls

RAND reports on a healthy eating dilemma:

Is eating more fruits and vegetables the key to reducing obesity? A recent RAND study of more than 2,700 adults found that calorie intake from cookies, candy, salty snacks, and soda was approximately twice as high as the recommended daily amount. Consumption of fruits and vegetables, on the other hand, is only 20% shy of recommended guidelines.


Cutting Class, With the School's Help

Via the Globe & Mail: it used to be that when you wanted to cut class, you’d have to get a friend to sign you into class, or you’d have to beat your parents home to delete any incriminating messages on the answering machine. But those methods are bush league compared to a recent California initiative. United Press International reports that 50 high school students were caught colluding with a school administrator in an attendance scam:


Hamermesh’s Corollary

In the last minutes before we depart to the airport, our clothesdryer breaks down, potentially leaving our housesitter high but not dry.  Murphy’s Law states: “Anything that can go wrong will go wrong.” This well-known aphorism ignores the crucial fact that things go wrong at different times, and that the opportunity cost of our time varies.  I don’t mind if things break down when I have time to worry about and solve the problem.  But that doesn’t happen.  


The Chinese Haven't Bought All Our Stock Markets, Have They?

Maybe my computer thinks I am in China (but I am not; I am in New York).

Maybe a Chinese hacker is just having a laugh (it has happened before).

Maybe the Chinese have bought all of our stock markets (although I seriously doubt it).

Or maybe, for whatever reason, Yahoo! Finance is simply some coding issues. Because when I checked the markets this morning, they seemed to have been renamed: 


Messing With Memory

New research finds that it’s alarmingly easy to create false memories for people, even when they know an event didn’t happen.  Psychologists Andrew Clark, Robert A. Nash, Gabrielle Fincham, and Giuliana Mazzoni conducted a three-stage experiment: 

In Session 1 participants imitated simple actions, and in Session 2 they saw doctored video-recordings containing clips that falsely suggested they had performed additional (fake) actions. As in earlier studies, this procedure created powerful false memories. In Session 3, participants were debriefed and told that specific actions in the video were not truly performed. Beliefs and memories for all critical actions were tested before and after the debriefing.


A New Revenue Source for Journalism?

Felix Salmon recently proposed an interesting new profit source for newspapers like The New York Times. Citing the Times‘s recent expose on Walmart and the resulting drop in the company’s share price, Salmon wonders why the company doesn’t charge companies for early access to big stories: 

[S]houldn’t the NYT, which can always use a bit of extra revenue, take advantage of the fact that its stories can move markets so much? Not directly: I’m not suggesting that the New York Times Company should start buying out-of-the-money put options on Mexican corporates in advance of its own stories. But how much would hedge funds pay to be able to see the NYT’s big investigative stories during the trading day prior to the appearance of the story? It’s entirely normal, and perfectly ethical, for news organizations, including Reuters, to give faster access to the best-paying customers.


Traffic Pollution: A Silent Killer in the U.K.?

A new study claims that traffic pollution “is more than twice as deadly as traffic accidents.”  Scientists Steve Yim and Steven Barrett “estimate that combustion exhausts across the U.K. cause nearly 5,000 premature deaths each year,” writes Roland Pease. “The pair also estimate that exhaust gases from aeroplanes cause a further 2,000 deaths annually.”  The study also points out that pollution travels:

Of the 19,000 annual U.K. deaths estimated, 7,000 are due to pollutants blown in from the continent. In London, European pollutants add 960 deaths each year to the 2,200 caused by U.K. combustion fumes.

But the international trade in deaths goes both ways. More than 3,000 European deaths can be attributed to U.K. emissions the authors say.

Yim and Barrett estimate that premature deaths are costing the U.K. billions of dollars a year, and suggest reducing black carbon and nitrogen oxide emissions and investing in public transportation.

(HT: Naked Capitalism)


UK Game Show Golden Balls: A New Solution to the Prisoner’s Dilemma

Several years ago, Felix Oberholzer-Gee, Joel Waldfogel and Matthew W. White, published a fascinating empirical article about the prisoner’s dilemma game embedded in the short-lived U.S. game show “Friend or Foe.”  Their core findings:

Using data from two seasons of a television game show, we provide evidence about how individuals implement conditionally cooperative preferences. We show that (1) contestants forgo large sums of money to be cooperative, (2) players cooperate at heightened levels when their opponents are predictably cooperative, and (3) players whose observable characteristics predict less cooperation fare worse (monetarily) over time, as opponents avoid cooperating with them. 

I always thought it might be nice to update the study to test to see whether different kinds of “cheap talk” were more or less effective in establishing cooperation.


Stand-Up Gamblers

Anglicare, a Tasmanian welfare agency, has submitted a proposal to the Australian government’s inquiry into problem gambling that would require pokies (the Aussie version of a slot machine) players to stand up while playing.  “We don’t want to punish people, but there are things we can do to assist problem gamblers to get a break in play,” said Chris Jones, the CEO of Anglicare. “If they want a break, they can sit elsewhere, but they don’t need to take a seat in front of a machine.”  


Chicken Wing Pricing Redux

About a year ago, I blogged about how odd the pattern of chicken wing prices was at my local Harold’s Chicken Shack.  Here was what they were charging for their wings:

2-wing meal $3.03

3-wing meal $4.50

4-wing meal $5.40

5-wing meal $5.95

6-wing meal $7.00

It is quite odd because they gave you a big discount on the fourth and fifth wings, but charged you a lot for the sixth wing.  There were many incongruities throughout the menu.

Since that time, Harold’s has invested in a fancy new menu up on the wall above the bulletproof glass that protects the workers from the customers.  I’ve also invested in a fancy new phone that actually takes pictures, unlike the phone I carried a year ago.  So this time, instead of having to write down all the prices, I just snapped a photo.


Affirmative Action: Changing Stereotypes

In a new article for Vox, Karla Hoff, a senior research economist at the World Bank, presents an argument for affirmative action.  Hoff argues that stereotypes can be self-fulfilling, and affirmative action represents an important tool for changing stereotypes and correcting inequality in the long-term:

For economists to ignore the factors that affect how we process information as part of the interpretation of economic change would be as wrong as to ignore the evolution of technology itself. Ideology shapes what we see and how well we perform. Ideology can give rise to “equilibrium fictions.” In our framework, changes in power, technology, and contacts with the outside world matter not just directly but because they can lead to changes in ideology. 

Hoff highlights a natural experiment in India that changed perceptions of female leadership over the course of ten years:


Let's Quit Together

If you’ve heard our podcast “The Upside of Quitting,” you’ll know that we think that strategic quitting has its place. A new paper looks at the peer effects of quitting. From the introduction:

Quitting is an important issue but its determinants have not received extensive research. Quitting lets an individual benefit from alternative opportunities but it usually also has costs, either monetary or moral, or both. There are also many reasons to believe that quitting is affected by social interactions and by observing others’ quitting decisions. This is particularly the case when thinking about quitting addictive behavior.

The researchers paid 104 undergrads to work for up to 75 minutes: a compulsory 15 minute followed by 60 minutes in which the participant could stop working at any time. Researchers Julie Rosaz, Robert Slonim, and Marie Claire Villeval found that if workers are not alone and allowed to interact with each other, they are more prone to quit at the same time:


When Assisted Suicide Goes From Theory To Practice

Time magazine has a poignant story (which is gated) and video (which is available) on Dr. Peter Goodwin, one of the advocates who helped get assisted suicide laws in place in Oregon and Washington.

Goodwin himself, at the time of the interview, suffered from a degenerative disease that was in the process of killing him and had to decide whether he wanted to take his own life. 

The interview is the last one he gave before his death.


Solar Subsidies

We are installing over 30 solar panels on our roof. The City of Austin currently offers a rebate up to $15,000 of 60 percent of the cost, and the federal government gives a 30 percent credit on the remainder.  With those subsidies the rate of return on our own investment is 17 percent, making this is a superb deal for us.

A neighbor in the Netherlands has 4 solar panels on his roof, a strangely small number.  I asked why.  His answer:  The Dutch government pays up to €1500 if you install a solar installation.  Each solar panel costs him €450, with a fixed cost of about €200 for the installation. Thus his average rate of return on his 4 panels is about 25 percent, a great investment. 


Why Don’t People Run Out Of Gas Anymore?

Blog reader Becky Roser sent an interesting email recently:

My father pointed out something interesting the other day – almost no one runs out of gas anymore. When gas was $0.60 a gallon, he maintains it happened all the time. Now that it’s $4.00, you almost never see it. I have vague memories of my father running out of gas when I was very young, but I’ve never done it. What changed?


The Inflation of Everything

Inflation is a term most often employed to describe prices.  A too-high inflation rate results in a devalued currency. But what about the inflation of other things in our world? The Economist reports on this trend:

Price inflation remains relatively subdued in the rich world, even though central banks are busily printing money. But other types of inflation are rampant. This “panflation” needs to be recognised for the plague it has become.

Take the grossly underreported problem of “size inflation”, where clothes of any particular labelled size have steadily expanded over time. Estimates by The Economist suggest that the average British size 14 pair of women’s trousers is now more than four inches wider at the waist than it was in the 1970s. In other words, today’s size 14 is really what used to be labelled a size 18; a size 10 is really a size 14. 


The Cities of America's Future

Writing in Foreign Policy, James Manyika, Jaana Remes, and Javier Orellana of the McKinsey Global Institute argue that cities in general and particularly smaller cities will power the new U.S. economy:

It is America’s large cities, and particularly the broad swath of middleweights, that will be the key to the U.S. recovery and a key contributor to global growth in the next 15 years. Large cities in the United States will contribute more to global growth than the large cities of all other developed countries combined. We expect the collective GDP of these large U.S. cities to rise by almost $5.7 trillion — generating more than 10 percent of global GDP growth — by 2025.


Acemoglu and Robinson Answer Your Questions

Last week, we solicited your questions for economist Daron Acemoglu and political scientist Jim Robinson, who just published a new book called Why Nations Fail: The Origins of Power, Prosperity, and Poverty and are now blogging on a variety of interesting development topics.

Their thoughtful responses below cover everything from robber barons to the artificial construction of African nations to whether the race of a country’s leaders determines its success.  A big thanks to Daron, Jim, and all our readers for another great Q&A.  

First, a note from Daron and Jim: “We thank everybody for these excellent questions and comments. We had to pick a few to be able to provide detailed answers.


Football Freakonomics: How Do Players' Body Clocks Affect Their Performance?

I have been lucky enough to visit the secret lair at the NFL’s headquarters where each year a crew of industrious people try to come up with an NFL schedule that pleases every team, player, TV network, fan, mayor, police department, religious official, and sports pundit in America.

This is of course impossible.

But they do try their best, and in today’s Times there’s a nice article by Judy Battista about how this year’s schedule was made by the NFL’s Howard Katz and his team.

After you look over the 2012-13 schedule, you might also want to take a look at the latest Football Freakonomics video we’ve done for the NFL Network. It considers the “body clock” factor on teams’ schedules:


Question of the Day: What Are Your Best — and Worst — Retail Experiences?

We’re working on a new Freakonomics Radio piece about what might best be called “retail etiquette.” It was inspired in part by this blog post, about how the quantity and quality of employees affects a company’s bottom line; and by this e-mail from a listener named Dawn Nordquist:

I’ve noticed that, at the beginning of the podcasts, a short banter between the two of you is included regarding thanking the listening audience.  Thanking the listening audience aside, what are your thoughts/observations on thanking in commercial transactions?  I have recently been struck by how often I am not thanked when purchasing something.


A Tourist in Cuba

Chris Turner explores Cuba’s current economic situation through the lens of a Canadian tourist:

Canada is probably the second most important economic ally Cuba has after Venezuela, which supplies more than 60 percent of the island’s oil. (China exports more stuff to Cuba, but the Chinese don’t show up daily by the multiple charter-flight-loads to hand out gifts and pour hundreds of millions of dollars into the Cuban economy.) Cuba is our largest trading partner in the whole of Central America and the Caribbean. We export a range of commodities to Cuba — sulphur, wheat, copper wire — and we are the second-largest buyer of Cuban exports, particularly sugar, nickel, fish, citrus fruits, and tobacco. That’s over $1 billion in total trade.


An Economics Lesson from Law and Order SVU

I watched a Law and Order SVU re-run last night, remarkably one that I hadn’t seen before. In the episode, an infant dies of measles contracted from another child whose parents refuse to vaccinate her.  (Infants are not vaccinated against measles.)  This is a classic case of whether concerns about potential negative externalities outweigh the desire to keep the government from dictating private behavior (vaccination). We already permit both approaches: we mandate vaccines for children to enter public school, and allow parents (as in this TV show) the choice of not vaccinating pre-schoolers.  


Economies of Scale in the Cocaine Industry

Brian Palmer of Slate reports that cocaine prices have dropped significantly in the past three decades due to economies of scale. As drug traffickers have become more organized (in processing, transport, and retail networks), the price of cocaine has plunged:

Since [the end of the 1980s], the price has dropped more slowly, down to approximately $140 for a gram of pure cocaine in 2007. (That’s almost 80 percent less than it cost in 1982.)