Tuesday , October 15 2019
Home / Tag Archives: Business Economics

Tag Archives: Business Economics

What Signals the Value of a Book- Sales versus Prizes

I nearly missed this intriguing article about a study done by three professors (two from English departments, and one who is the associate director of Stanford’s Literary Lab) that tries to determine the significance of winning or being nominated for a literary prize. To do so, they track the popularity of the book, gauged by reviews of it on Goodreads, and the prestige, gauged by MLA citations. Entertainingly, the authors of the study do not use sales data to track a...

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Extended Warranty Prices as a Market Measure of Quality

Yesterday, as I was writing my latest piece for the Hoover Institution’s on-line publication Defining Ideas, I was telling a friend that when my wife and I shop for cars, we pretty much shop for only cars made by Japanese companies. In our experience, and in the data we’ve looked at over the years in Consumer Reports and elsewhere, cars made by Japanese companies* are much more reliable than those made by U.S. companies. One set of data I’ve looked at that confirms...

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Great Moments in Price Discrimination

Below is a quote from a news item in the Washington Post by Casey Quackenbush, August 15, 2019. It’s titled “A Run on Gas Masks: Hong Kong protestors circumvent crackdown on protective gear” and is quoted in Liz Wolfe, “Hong Kong’s Market Is Providing Gas Masks and Protective Gear Despite Government Crackdown,” Reason.com, August 16, 2019. At big protests, [Lee] rents a stall nearby and sells packets containing an eye mask, respirator, gloves and helmet. The packet...

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The Mule

My wife and I rented the recent Clint Eastwood movie, The Mule, last night. I would give it an 8 out of 10. At various points, we paused and talk about the fact that we had no idea where the movie would go. Once it ended the way it did, it was plausible, but I wouldn’t have necessarily predicted that. I want to make two points, though, one of which relates to economics and the other of which relates to liberty. That’s why they fit on this blog. Economics (Minor...

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Kevin O’Leary’s Separation Theorem

The principle that, given perfect competition and complete markets, the productive decision is to be governed solely by the objective market criterion represented by attained wealth–without regard to the individuals’ subjective preferences that enter into their consumptive decisions–will appear repeatedly throughout this study. We will call this principle the Separation Theorem. This quote is from J. Hirshleifer, Investment, Interest, and Capital, 1970. It’s the...

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Reflections on the Democratic Debate

I watched some of the Democratic presidential candidates’ debate last night and some of the discussion afterwards on CNN and Fox, and read a few highlights this morning. Here are some thoughts. Mueller: the dog that didn’t bark. Not a word was said about the Mueller report or Mueller’s recent testimony. Search for “Mueller” on the the Washington Post’s debate transcript and you get zero hits. A lot of that, of course, is up to the three people asking questions and...

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Arthur Hailey on How the Profit Motive Undercuts Prejudice

As with the other query, Christine knew the credit manager would feel his way warily. Part of his job–equally important with preventing fraud–was not offending honest guests. After years of experience a seasoned credit man could usually separate the sharks and sheep by instinct, but once in a while he might be wrong–to the hotel’s detriment. Christine knew that was why credit managers occasionally risked extending credit or approved checks in slightly doubtful cases,...

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Henderson on Cowen on Big Business

Tyler Cowen’s latest book, Big Business: A Love Letter to an American Anti-Hero, is excellent. Cowen, an economics professor at George Mason University, makes a strong evidence-based case that big business in America is an important—probably the most important—contributor to our well-being. In a heavily footnoted book with references to scores of high-quality articles and books, Cowen argues that: Businesses are less deceptive than many other actors in society. CEOs...

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McArdle’s Confusion About Costs of Inputs

One of the best economic journalists in the United States is Megan McArdle of the Washington Post. That makes her error in a recent WaPo article all the more striking. Don Boudreaux at Cafe Hayek has pointed out the error. But I want to do my own analysis because it’s a more general error that I see people make and the first time I saw a friend make was when I was 20 and really starting to “get” economics. Coincidentally, the error my friend made was when we were...

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Coming Airline Competition

An invaluable source of information on transportation is Reason Foundation analyst Robert Poole. In his latest post, dated May 13, Bob Poole writes: The ULCCs [ultra low cost carriers] continue to grow and are among the world’s most profitable airlines. Frontier, for example, last year signed a code-sharing agreement with Mexico’s Volaris, adding 12 more destinations in Mexico, as part of growing to 100 destinations (now including Calgary in Canada). This kind of...

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