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Proud to Be American

Watching the Olympics in a foreign country (the U.K.) brings out the super-patriot in me.  I’m cheering for the U.S. athletes in each event, and I don’t even care about the games!

Is this patriotism unusual?  Actually, we Americans are outliers in this regard.  In a recent set of World Values Surveys, 71 percent of Americans responded positively when asked if they were very proud of their country. Among 16 other rich countries in the surveys, the average was only 45 percent.  And only Australians and Irish were as proud as we seem to be. The jingoism of the networks in the U.S. during the Olympics caters to, and perhaps reinforces, our attitudes.


Want to Win Olympic Medals? Fix Your Economy First

Steven Perlberg of Business Insider quotes a private research note by ConvergEx’s Nick Colas on the correlation between Olympic success and economic strength. “The Winter Olympics are a useful backdrop for case studies on the relationship between athletic performance and economic progress in emerging markets around the world,” writes Colas. “We’ve analyzed the medal count by country since the inaugural Winter Games in 1924, and indeed the results show that athletes rarely make it to the podium until their respective countries experience economic progress and stability.”  A few case studies from Colas’s note:

  • Japan’s Winter Olympic performance history tells a post-WWII recovery story.  The country competed in three Winter Games (1928, 1932 and 1936) before it won its first medal – silver – in 1956.  Japanese athletes didn’t earn any additional medals until the 1972 games, which the country hosted, and have been consistently making an appearance on the podium since 1980.  Japan won its first medal when it was taking off as an emerging economy and getting its economic act together following WWII.  Industrialism in the country picked up rapidly following the war, and the Olympic medal consistency coincided with the consumption boom in the 1980s. 


On Beauty and Biking

Our recent podcast “Reasons to Not Be Ugly” examined the beauty premium, as well as the “downside of ugly.”  A new paper by evolutionary biologist Erik Postma in Biology Letters highlights one more advantage of beauty: better endurance performance (in the form of faster cycling).  Bill Andrews of Discover‘s D-brief blog summarizes the study’s setup:

As the paper’s abstract explains, “Females often prefer to mate with high quality males, and one aspect of quality is physical performance.” So the more physically fit a human male is, the more human females might want to bang him. But how to test for this — and, specifically, how to test for this with the measure of physical performance being endurance, a trait not easily quantified?


“Flappy Bird” Demand

“Flappy Bird,” a popular mobile game, was taken down by its creator over the weekend. From CNN.com:

“Flappy Bird” has flown the coop.

The addictive game that soared to the top of iPhone and Android app downloads disappeared from app stores on Sunday, though players who already have it apparently can keep on flying.

…Although new players can no longer download “Flappy Bird,” the game remains playable for those who had already added it to their devices.

A secondary market has emerged yesterday, with entrepreneurs willing to part with their “Flappy Bird” installed mobile devices — for some pretty high prices:


Predicting the Winter Olympics with Economics

How many medals will U.S. athletes win at the Sochi Winter Olympics?

To answer this question, one might want to think about the abilities of the athletes involved in each competition.  And then use that information to forecast who is going to win each event.

Of course, that approach requires knowledge of the athletes involved in a wide variety of sports.  Furthermore, even if you knew how to measure ability, you would also have to figure out some way to forecast each athletes’ performance.

In a recent paper by Madeleine Andreff and Wladimir Andreff — “Economic Prediction of Medal Wins at the 2014 Winter Olympics” (PDF) — an approach advocated by a number of sports economists is employed. 


It’s All in the Framing

Reader Steve Cebalt from Fort Wayne, Ind., sent in this picture, taken at a mega-supermarket near his home.  Here’s what he  had to say about it:

I was struck by the unapologetic, commanding, imperative, unexplanatory tone of that message. I liked it and thought it was very effective communication. Understand that this is a mega-supermarket, and that closing this exit imposes a major inconvenience on all shoppers and a hazard on elderly people who have to traverse to the opposite exit and then back to their car in blizzard conditions, so the closure of this exit door is a major issue for the store. Somehow I find the store’s imperative tone more satisfying than anything else they possibly could have said. But why does it intrigue me, and why do I find it more satisfying than the overwrought “customer-centric” tone of most similar communications I see? I have my theories, but I’d be interested in whether your readers have reactions. By the way, I discussed this with the store manager, who thought I was nuts. Not really. Actually, he said they gave that sign a lot of thought. He said the wording was very deliberate because they knew that closing that door was a major decision that affected customers significantly during the worst weather of the year…Safety? Mechanical failure? OSHA regulations? It could be a lot of things, right? 

Well, Freakonomics readers, what do you think of the language? And what’s your guess as to why the store opted to block off the door?


The Downside of Smoking Pot?

I am not sure how else to explain this e-mail, received from a reader whose name I shall withhold:

So there is this weird thing going on at CVS that I have to at least make record of, maybe talk about. I am constantly lured there and I walk the wiles, grab a few things, and the bill ALWAYS adds up to whatever amount of money I have in my pocket. If I have $54.32, on three occasions the total added up to exactly the amount I had, and on two other occasions it was within a dollar of being the exact amount. It’s like if I played roulette and always guessed right. Now I can’t talk about it, and these fucks know that, so they do it every time I go to CVS. I boycotted CVS but they lure me there anytime I am even close there. I swore myself to secrecy but the problem is I don’t have a lot of friends and under a condition of secrecy, I get lured to CVS constantly.


A Game Theorist on Jeopardy

A game-theory nerd named Arthur Chu has been kicking butt on Jeopardy. From The Atlantic Wire:

Due to Arthur’s newfangled shenanigans, Wednesday’s Jeopardy ended in a rare tie. In Final Jeopardy, the leading contestant typically wagers $1 more than double of the 2nd place contestant. If both answer correctly, then the person in the lead wins by that extra buck. But Arthur did not add the $1, wagering enough so that if he and Carolyn both answered correctly, they would tie. And that’s exactly what happened, as both moved on to the next round. He made the same move on Tuesday, as well, though he was the only contestant to answer correctly. “Interesting wager,” host Alex Trebek condescended, after the tie. 

While it seems strange, it’s actually the correct move to make, says The Final Wager blog, the brainchild of former Jeopardy winner Keith Williams that breaks down the proper mathematical wagering. Basically, the whole point of the game is to move on to the next round. Whether or not someone joins you is largely irrelevant. In addition, there’s a certain mind-game tactic that can make the trailing contestant bet an irrational number. While the numbers stand behind these ideas, Tuesday’s tie-targeting move was the first to do so all season, Williams said. “It’s really cool to see this happen,” he said. In fact, Arthur admitted to Williams that he got the idea from his videos.


Why Broadway Performers Are Paid More

A recent New York Times article discussed a meeting being held to protest a “tiered wage” that averages $1,000 per week for performers in touring productions of Broadway musicals — compared to a “full wage” of $1,800 for the Broadway productions of the same show.  

Why shouldn’t the pay be the same for the same effort?  The article gets the answer correct: the pay must equal the marginal revenue product for the production to be profitable; and even compared to performances in cultural capitals like Austin, Tex., the revenue-per-seat-filled on Broadway is much higher. A touring company just cannot, as the article notes, make a profit or perhaps not break even paying the same wages as on Broadway.  Perhaps not fair to the performers, but this is good economics.  With this difference in pay, however, the quality of the touring companies is unlikely to be as good as the Broadway company.


The Inefficiency of Long Hours

Writing for The New Yorker, James Surowiecki explores the downside of working long hours:

The perplexing thing about the cult of overwork is that, as we’ve known for a while, long hours diminish both productivity and quality. Among industrial workers, overtime raises the rate of mistakes and safety mishaps; likewise, for knowledge workers fatigue and sleep-deprivation make it hard to perform at a high cognitive level. As [David] Solomon put it, past a certain point overworked people become “less efficient and less effective.” And the effects are cumulative. The bankers [Alexandra] Michel studied started to break down in their fourth year on the job. They suffered from depression, anxiety, and immune-system problems, and performance reviews showed that their creativity and judgment declined.


What Are the Odds of Twins Born in Different Years?

The following is a guest post by Louise Firth Campbell and Amram Shapiro, the authors (with Rosalind Wright) of The Book of Odds: From Lightning Strikes to Love at First Sight, the Odds of Everyday Life.

Rare news stories recur with surprising regularity — one of these annual stories is the birth of twins in two different years. 

You can see the appeal to editors. Babies are photogenic, especially twins. The symbolism of the New Year as a baby which ages to dotage by year end is an old one, a staple of thousands of New Year’s cards. There is an interesting apparent time tension in the story. Twins share a womb and genomes. Yet a few seconds separation in time of birth makes an apparent year’s worth of difference.[1]  This event is considered a rarity and only a handful of cases are reported in the press each year. This rarity makes it news, but is the event really as rare as it seems?

Let’s start with the news in 2013/2014. If the cases reported in the North American media, two in the U.S. and one in Canada, are the only cases, these events are rare indeed. There are about 4 million births a year in the U.S. That would suggest these events are as rare as 1 in 2 million. Someone visiting the Grand Canyon is more likely to die by falling off the edge (1 in 1.5 million).[2]  That doesn’t feel right to us.


Why Masahiro Tanaka’s Yankees Contract Is Good for Baseball

A few days ago, the New York Yankees signed Masahiro Tanaka to a $155 million contract. As Bryan Hoch of MLB.com notes, this is the fifth-highest salary for a pitcher in Major League history.  But the Tanaka contract is different from the top four on the list.  The top four contracts went to pitchers who were already playing Major League Baseball.  Tanaka played last season for the Rakuten Golden Eagles in Japan’s Nippon Professional Baseball league.  And while his 24-0 record – and 1.27 ERA – helped the Golden Eagles win the Japan Series title, we do not know how he will fare against MLB hitters. Despite this uncertainty, there is still a sense that this signing illustrates that the Yankees have an unfair advantage.


Are Vaccines Red or Blue?

As the long-running debate continues over whether childhood vaccines cause autism, Yale professor Dan M. Kahan (who has appeared on Freakonomics Radio) takes a look at people’s attitudes toward vaccination. He dispels the myth that liberals are more likely to be anti-vaccine. From the abstract of his new paper:

This Report presents empirical evidence relevant to assessing the claim — reported widely in the media and other sources — that the public is growing increasingly anxious about the safety of childhood vaccinations. Based on survey and experimental methods (N = 2,316), the Report presents two principal findings: first, that vaccine risks are neither a matter of concern for the vast majority of the public nor an issue of contention among recognizable demographic, political, or cultural subgroups; and second, that ad hoc forms of risk communication that assert there is mounting resistance to childhood immunizations themselves pose a risk of creating misimpressions and arousing sensibilities that could culturally polarize the public and diminish motivation to cooperate with universal vaccination programs. Based on these findings the Report recommends that government agencies, public health professionals, and other constituents of the public health establishment (1) promote the use of valid and appropriately focused empirical methods for investigating vaccine-risk perceptions and formulating responsive risk communication strategies; (2) discourage ad hoc risk communication based on impressionistic or psychometrically invalid alternatives to these methods; (3) publicize the persistently high rates of childhood vaccination and high levels of public support for universal immunization in the U.S.; and (4) correct ad hoc communicators who misrepresent U.S. vaccination coverage and its relationship to the incidence of childhood diseases.


One Possible Explanation for the January Stock-Market Fall

In a Wall Street Journal op-ed, Red Jahncke argues that the recent drop in U.S. stock markets may be a delayed response to a tax change:

In late 2012, investors sold huge amounts of investments with long-term capital gains to take advantage of the expiring 15% “Bush” long-term capital-gains tax rate before the current 23.8% rate for higher-income investors took effect on Jan. 1, 2013. These sales left investors with few unrealized long-term gains going into 2013.

Instead, as the market surged, investors’ new gains were held mostly in short-term positions, which they were loath to sell given that short-term gains are taxed at ordinary income-tax rates (39.6% for high earners). With this inhibition there was less sales pressure last year, and for that reason the market may have risen more than it would have otherwise. Indeed, last year’s 30% market gain exceeded most analysts’ predictions.


The Hitmen

New research, reported on by Mark Townsend in The Guardian, explores the habitual behavior of a small sample of British hitmen. Here’s Townsend’s summary:

The killers typically murder their targets on a street close to the victim’s home, although a significant proportion get cold feet or bungle the job, according to criminologists who examined 27 cases of contract killing between 1974 and 2013 committed by 36 men (including accomplices) and one woman.

…The reality of contract killing in Britain tended to be striking only in its mundanity, according to David Wilson, the university’s professor of criminology. He said: “Far from the media portrayal of hits being conducted inside smoky rooms, frequented by members of an organized crime gang, British hits were more usually carried out in the open, on pavements, sometimes as the target was out walking their dog, or going shopping, with passersby watching on in horror.”

Researchers found that the average cost of a hit was £15,180, with £100,000 being the highest and £200 the lowest amount paid. The average age of a hitman was 38 with the youngest aged 15 and the oldest 63.


How Drunk Is Too Drunk to Drive?

Our podcast “The Suicide Paradox” featured sociologist David Phillips, who spoke about his research on copycat suicides (a phenomenon he calls “the Werther Effect”). More recently, Philips has been studying drunk driving. Particularly, he’s been looking at drivers who are merely “buzzed” — with 0.01 percent blood alcohol concentrations (BACs) — and has found that the severity of life-threatening motor vehicle accidents increases significantly at BACs far lower than the current U.S. limit of 0.08 percent. In an email, Philips describes his latest research on buzzed drivers:

My current research, just published in Injury Prevention, shows that even minimally buzzed drivers (with BAC=0.01%) are 46% more likely to be blamed for an accident than are the sober drivers they collide with. This indicates that there is no safe level of alcohol for drivers: any amount of alcohol markedly increases the risk to drivers and their passengers. We reached this conclusion after examining an official, U.S. dataset of more than 570,000 car crashes. The findings have implications for drivers, passengers, police, judges, lawyers, insurance companies, advocacy organizations (like MADD) and regulatory agencies.


More Benefits of Gossip

Last week’s podcast, “Everybody Gossips (and That’s a Good Thing),” was all about the functions of gossip — good and bad. A new study (abstract; PDF) by Matthew Feinberg, Robb Willer, and Michael Schultz looks at how gossip influences group cooperation. The researchers played a game with 216 participants, with groups investing in public goods. Participants were allowed to gossip in between rounds and exclude a participant from future rounds, if they chose. They found, as Nicholas DiFonzo said on our podcast, that gossip is great for policing and reforming selfish free riders. From The Telegraph:

Dr Matthew Feinberg, a researcher at Stanford University in the United State who co-wrote the study, said: “Groups that allow their members to gossip sustain co-operation and deter selfishness better than those that don’t.

“And groups do even better if they can gossip and ostracize untrustworthy members.”

The researchers found that when people learn about the behavior of others through gossip, they use the information to ally themselves with those deemed co-operative.


The Effects of For-Profit Microloans

In recent years, the effects of microcredit, particularly the high-interest loans offered by for-profit lenders, have been hotly debated.  New research (abstract; PDF) from Dean Karlan and two co-authors, which Karlan discussed on this blog as the project was getting underway, addresses the impacts of the for-profit loans offered by Compartamos Banco, Mexico’s largest micro lender.  Their findings:

Our results suggest modest but generally positive average effects on our sample of borrowers and prospective borrowers. We make five broad inferences. First, increasing access to microcredit increases borrowing and does not crowd-out other loans. Second, loans seem to be used for both investment—in particular for expanding previously existing businesses—and risk management (through a reduction in asset fire sales). Third, there is evidence of positive average impacts on business size, reliance on/need for aid, lack of depression, trust, and female decision making. Fourth, there is little evidence of negative average impacts: the only “negative” impacts are reductions in asset purchases and temptation goods, and these results have normatively positive or neutral interpretations as well. Fifth, the positive effects are not sweeping or transformative. Although some of the AIT effects are economically large, and all of the statistically significant effects are likely large in treatment-on-the-treated terms, we find statistically significant effects on only 12 of the 35 more-ultimate outcomes we evaluate, and no positive effects on household/business income, consumption, or wealth. 


Who Drinks More: Liberals or Conservatives?

Liberals, according to a new paper in the Journal of Wine Economics by Pavel A. Yakovlev and Walter P. Guessford of Duquesne University. The paper, “Alcohol Consumption and Political Ideology: What’s Party Got to Do with It?,” looks at alcohol consumption and voting patterns from 1952 to 2010 and finds that as states become more liberal politically, they drink more beer and spirits, although less wine. The abstract:

Recent research in psychology and sociology has established a connection between political beliefs and unhealthy behaviors such as excessive alcohol, tobacco, and illegal drug consumption. In this study, we estimate the relationship between political ideology and the demand for beer, wine, and spirits using a longitudinal panel of fifty U.S. states from 1952 to 2010. Controlling for various socioeconomic factors and unobserved heterogeneity, we find that when a state becomes more liberal politically, its consumption of beer and spirits rises, while its consumption of wine may fall. Our findings suggest that political beliefs are correlated with the demand for alcohol.

For all you politically conservative drinkers out there, check out one of our most popular podcasts of all time: “Do More Expensive Wines Taste Better?“


More Talk About Why We Don’t Wear Hats Anymore

From Babak Givi, an assistant professor at NYU’s Dept. of Otolaryngology-Head & Neck Surgery:

Dear Freakonomicers,

I am writing in regards to your January 9th podcast [“Are We Ready to Legalize Drugs? And Other FREAK-quently Asked Questions”] and the question about hats. Why people used to wear hats? Stephen made a comment about religious roots of hats and Steven talked about fashion.

I am sure there are links with both, but I would like to note that for the most of the human history, hats were protective garments. We are not spending as much time as we used to out in the open environment. If you spend most of the time outside, you will soon realize that similar to the rest of your body, you have to protect your head from the sun, wind, rain, or snow; but most importantly from the sun. Even now, when we spend most of our time inside our manmade structures, skin cancers are the most common type of cancer in humans. Furthermore, the most common area for developing skin cancers is head and neck, which happens to be the most exposed area of human body, as long as you are not a strict nudist. The effects of ultraviolet rays on developing skin cancers is beyond doubt.  Lightly pigmented skins are extremely sensitive to the sun and with enough exposure most people will develop skin cancers. Hats, similar to the rest of clothing items, protect our skin. In addition, less sunlight will delay development and progression of cataracts (point for wide brim hats). I think our ancestors had developed the habit of wearing hats out of necessity not fashion or religion. But of course through the millennia, we start adding religious, fashion, and symbolic meanings to wearing hats.


Why Do We Vote? So We Can Tell People We Voted

We once wrote about reasons to not vote, at least from an economist’s perspective. Since a single vote almost never alters an outcome, what’s in it for the voter?

If a given citizen doesn’t stand a chance of having her vote affect the outcome, why does she bother? In Switzerland, as in the U.S., “there exists a fairly strong social norm that a good citizen should go to the polls,” [Patricia] Funk writes. “As long as poll-voting was the only option, there was an incentive (or pressure) to go to the polls only to be seen handing in the vote. The motivation could be hope for social esteem, benefits from being perceived as a cooperator or just the avoidance of informal sanctions. Since in small communities, people know each other better and gossip about who fulfills civic duties and who doesn’t, the benefits of norm adherence were particularly high in this type of community.”


Gossip and the Founding Fathers

In light of our recent podcast “Everybody Gossips (and That’s a Good Thing),” we heard from David Head, an assistant professor of  history at Spring Hill College in Mobile, Alabama:

I just listened to the podcast on gossip and as it happens my class on the early American republic will be reading the following article on political gossip for next week:

Joanne B. Freeman, “Slander, Poison, Whispers, and Fame: Jefferson’s ‘Anas’ and Political Gossip in the Early Republic,” Journal of the Early Republic, 15 (1995), 25-57.

Have you heard of it? Freeman shows that not only were the founders inveterate gossips but that gossip was crucial to the formation of political parties as like-minded founders, such as Jefferson and Madison, attempted to marshal support to protect themselves and the country from their enemies, such as Hamilton.

What fun it would have been to include this in our episode! Its thesis strengthens the point made in the podcast by Nick Denton of Gawker:


When Demand Elicits Fake Supply

I visited the Mütter Museum (a great collection of medical and related memorabilia and information in Philadelphia), which had the following sign on one exhibit about shrunken heads: “Westerners traveling to the territory in the late 19th century … were fascinated with the heads and offered the tribe money and guns in exchange. … This led to an increase in warfare … both to get more heads to sell and because of the prevalence of guns.  It also led to the creation of counterfeit heads … made from real human heads but not prepared by the tribe, and others [that] were made from monkey, goat, or other animal skin.”  Nice to see how, even for a bizarre object, a large increase in demand elicits a supply response of both genuine and fake products.

I welcome other equally weird examples of induced supply responses with both genuine and fake products.


Reducing Recidivism Through Incentives

Ryan Bradley, writing for CNNMoney, highlights an interesting policy experiment currently underway in New York City: a social impact bond geared at reducing recidivism:

They are called “social impact bonds.” The first, issued in 2012 by Goldman Sachs (GS), is underway in New York City for $9.6 million. The money is going toward a four-year program to reduce reincarceration of juveniles at Riker’s Island prison. Goldman Sachs has a vested interest in the success of this program. If participants stop returning to jail at a rate of 10% or greater, Goldman will earn $2.1 million. If the recidivism rate rises above 10% over four years, Goldman stands to lose $2.4 million. In a recent report, the Brennan Center for Justice at NYU School of Law calls this a “bet on success … instead of using the typical model of privatization, in which private prisons generally bet on failure (i.e. the more prisoners, the better).”

Bryan Stevenson, the founder and executive director of a nonprofit that, among other things, helps former convicts avoid reincarceration for minor parole violations, believes the idea could be “transformative.”  


Can Economic Growth Continue Forever? Of Course!

Tim Harford, who writes the Financial Times‘s  “Undercover Economist” column, has appeared on our blog many times. This guest post is part of a series adapted from his new book The Undercover Economist Strikes Back: How to Run or Ruin an Economy. 

Can economic growth continue forever? The internet seems to be full of physicists explaining that economists are clueless on this topic. There’s the late Albert Bartlett’s hugely popular videos – or Tom Murphy’s article “Exponential Economist Meets Finite Physicist.” The key issue is that exponential growth will eventually take you to impossible places. And by eventually, the physicists mean “sooner than we expect.”

Exponential growth is any kind of growth that compounds like interest payments. The classic example is the rice on the chessboard. According to an old story, the inventor of the game of chess was offered a reward by a delighted king. He requested a modest-sounding payment: one grain of rice on the first square of the chessboard, two on the second, four on the third, doubling each time. Yet this is actually a colossal amount—many times the annual rice production of the entire planet.


Marijuana and the NFL

One of our very first Freakonomics Radio podcasts focused on brain trauma among NFL players. Writing for Vice, David Bienenstock argues that NFL players might benefit hugely from medical marijuana. He points to an editorial in the Washington Post earlier this year, describing research indicating that marijuana could protect player’s brains from the long-term effects of traumatic brain injuries:

As it turns out, recent studies are starting to contradict the notion that marijuana kills brain cells. Last year, researchers at Tel Aviv University in Israel gave low doses of THC, one of marijuana’s primary cannabinoids, to mice either before or after exposing them to brain trauma. They found that THC produced heightened amounts of chemicals in the brain that actually protected cells. Weeks later, the mice performed better on learning and memory tests, compared with a control group. The researchers concluded that THC could prevent long-term damage associated with brain injuries. Though preliminary, this is just one of many promising studies exploring marijuana’s benefits for the brain.


The Free Harbor Fight: Transportation Meets Chinatown

Unlike its natural rivals—San Diego, San Francisco, and Seattle—Los Angeles is a rotten place for a port. But that hasn’t stopped the city known for inventing and reinventing itself from becoming the busiest container traffic hub in the US. The story of how L.A. transformed itself into one of the world’s great shipping centers is rife with corruption, power politics, double-dealing, bribery, and betrayal. It’s a story that could only have dripped from the pen of one of the city’s Hollywood hacks–if it weren’t true.

Despite its worldwide association with sand and surf, Los Angeles began life as an inland community. Its original port was at San Pedro, roughly 25 miles to the south. But San Pedro had been cursed by nature. There was no shelter from waves and wind; it was far too shallow to accommodate shipping; and its bottom was mudflats, making construction of heavy piers or breakwaters difficult. Bringing cargo ashore meant transferring it to longboats from ships anchored several miles out at sea, rowing it ashore, and then hauling it by hand across a rocky beach and up a steep slope. The only alternative to this difficult operation was to beach the ship, an even more challenging undertaking. Writing in his 1834 account of his time as a sailor on a ship plying the California coast, Two Years Before the Mast: And Twenty-Four Years After, Charles Henry Dana called San Pedro a “hated… thoroughly detested spot.”


Israel’s New Organ Donation Nudge

Israel, which has a history of creatively incentivizing organ donation, will soon be implementing yet another organ “nudge.”  Al Roth shared a recent email from Israeli transplant surgeon (and Freakonomics podcast guest) Jay Lavee explaining the new policy (which is based on unpublished research by Roth and Judd Kessler): 

Just a short note to let you know that the Israeli Minister of Health has adopted this week my recommendation to establish by law the modified mandated choice model based upon your work, whereby the issuing or renewal of an ID, passport or driving license will be conditional upon answering the question of becoming a registered donor to which only a positive answer will be given as an option or else the “Continue” button will be selected. It seems that, contrary to my previous worries, the entire registration for these documents is currently being done online and therefore there should be no technical issues to implement this model.


Are Recessions Like Prison Camps or Baby-sitting Co-ops?

Tim Harford, who writes the Financial Times‘s “Undercover Economist” column, has appeared on our blog many times. This guest post is part of a series adapted from his new book The Undercover Economist Strikes Back: How to Run or Ruin an Economy. 

Robert A. Radford studied economics at Cambridge University, and worked at the International Monetary Fund. In between, he spent half the war in a German prison camp, and on his release wrote an article, “The Economic Organization of a P.O.W. Camp.” It gives a surprising insight into economic recessions.

The building blocks of the P.O.W. camp economy were parcels of food and cigarettes that the prisoners received from the Red Cross. These parcels were standardized—everybody got the same, beyond the occasional package from home. Occasionally, the Red Cross received bumper supplies, or ran short; in those circumstances everybody enjoyed a surplus or a shortage. Naturally enough, while prisoners had equal rations, they did not have identical preferences. The Sikhs didn’t have much use for their rations of beef or razor blades, for example; the French were desperate for more coffee; the English wanted more tea.


Meditating on Those Sunk Costs

The sunk-cost fallacy leads to all sorts of poor decision-making — like staying too long at a bad job or refusing to drop out of a hopeless mayoral campaign.  Here’s how Dubner explained it in our podcast on quitting:

A “sunk cost” is just what it sounds like: time or money you’ve already spent. The sunk-cost fallacy is when you tell yourself that you can’t quit because of all that time or money you spent. We shouldn’t fall for this fallacy, but we do it all the time.

But there’s new hope for all you sunk-cost believers out there: new research (abstract; PDF) from Andrew C. Hafenbrack, Zoe Kinias, and Sigal Barsade shows that a 15-minute mindfulness meditation practice can help.