Quotes for week 21st to 27th of Oct '07

Bărbata nu pentru o bere obişnuită se duce la Irish [Pub].

La patru dimineaţa zâmbetul chelnerului e un cadou.

Mezei Nelli, "Noapte Lunga la Timisoara"

Read the quote of the previous week.

Does knowledge of economics make you happier?

The read of the week. The author of Bluematter is "[a]n occasionally tactless economist [who] opines on economics, politics and everything else. " And who choses to remain anonymous on the following grounds: "This blog reflects my personal views and is in no way representative of those of my employer or my mum. To make sure no misunderstanding arises and their lives stay stress-free, I will remain anonymous." Brilliant, concise and simply brilliant!

But here's the gist of his answer to the question we are all interested in (I couldn't have phrased this better and for the moment I can't think of anything to add to it):

"...the answer is yes. Here's why:

1. I cherish my consumer surplus. I value most of the stuff I buy way more than what I have to pay for them; vanilla ice cream makes me happy beyond belief, and the same is true for the music of Dream Theater and the (soon to be purchased) Apple iphone. And what am I asked to pay for them? Peanuts.

2. I cherish my producer surplus. I am getting paid way, way more than the salary that would make me indifferent between supplying labour and staying at home.

3. I never have regrets: I did the best I could given the information available to me at the time. Judging I could have done better using information I acquired at a later date makes as much sense as regretting the existence of gravity. On a related topic, I understand the irrelevance of sunk costs.

4. While I do care for my welfare in relative terms, my welfare in absolute terms looms large in my utility function - and, boy, look how its value has been growing.

5. The selfishness of my fellow human beings does not make me anxious or depressed. Adam Smith (or was it Mandeville?) taught me that humans, selfish as they are, can make happy societies. And perhaps more to the point, they can make me happy.

Found about the above via Tyler Cowen, on MR. And we have to give Tyler the credit for his equally brilliant conclusion: "Only the fixed point theorem prevents him from reaching pure bliss." :-)

Zoitica, esti barbata!

Descoperirea saptamanii: de departe, cel mai promitator nou blog din ClujBlogRoll. Ingrediente majore in posturile de pana acum: stil, acel epsilon necesar de imprevizibilitate si, mai ales, elementul "exposure". Un debut de exceptie (perfectibil, dar reusit) a carui implicatie nu poate fi decat "I'll be returning soon, hungry for more" (yep, Anton Ego becoming my alter ego...).

PS. Sa nu ma dezmint :-), totusi: putin mai multa atentie la forma nu ar strica (da, am inteles ca romana e pentru tine a doua limba; in cazul tau, insa, cu foarte putin efort in plus, cred ca ai putea sa scrii textele fara greseala-- si da, practica te va ajuta enorm aici) . Sugestia e evident de prioritate secundara; cata vreme continutul ramane superlativ, you rock!

The spinning dancer and the actual evidence

Steven Levitt questions (quite convincingly, despite the small sample size and possible selection issues) the main "predictions" associated with the direction people see this ballerina spin. Levitt (who also sees the dancer turn only clockwise, as I do) shows that probably all associations in the article were reversed and the left column should have been the right column (next to that, it also appears that it isn't even true that most people see the dancer turn anti-clockwise)... I thought so, since I deemed most of them speculations, to start with. Well, too bad for the risk taking behaviour, that one I did not mind :-).

Quote/movie scene for week 14th- 20th of October '07

In many ways, the work of a critic is easy. We risk very little yet enjoy a position over those who offer up their work and their selves to our judgment. We thrive on negative criticism, which is fun to write and to read. But the bitter truth we critics must face is that, in the grand scheme of things, the average piece of junk is more meaningful than our criticism designating it so [...]

Anton Ego, character in the movie "Ratatouille"

Listen to Ego's full review on YouTube -- my selected movie scene of the week-- with the food critic superlatively dubbed by Peter O'Toole throughout the movie. I should also say that Ratatouille (IMDb, RottenTomatoes) just made it to my top 25 movies.

Read previous week's quote.

See previous movie scene of the week.

Econlinks for 21 Oct '07

• Preston McAfee brings a second noteworthy innovation to Economic Inquiry (I also blogged about the first one since he came as editor to that journal): "We now have a miscellany section. Miscellany operates like the JPE section of the same name, publishing humor and curiosities. Humor is purely a taste determination and being funny for an academic is like being tall for a dwarf. Submissions for the miscellany should indicate so on the manuscript. A good idea is to title the paper "Miscellany: The Simple Economics of Complexity." " The quote was from the the page on the policies of the Economic Inquiry. See more on this from the new editor of the Economic Inquiry humor section (with hints of how humorous that would be).

• Greg Mankiw with some super interesting links to new papers on our genetic sense of fairness (the papers he is talking about are published in the PNAS and respectively, Science).

• The Right vs. Left Brain test (via Tyler Cowen on MR). I have to confess that I only see the ballerina spin clockwise, no matter how hard I try to spot also the reverse spinning (apparently most people can only see the anti-clockwise spinning: that is very curious for me). Right hemisphere use and risk taking behaviour it is, then (the rest of the characteristics associated with one or the other type are pure speculation, I'd say).

• The economics of gold digging, via Steven Levitt. The most interesting part is Levitt's discussion of the initial female Craiglist post and the succesive male answer. In particular the following Levitt quote should be saved for future reference; it suggests there is still hope in this profession, despite the initial odds :-)

"I wouldn’t expect male economists to marry very well. Firstly, they tend to think like the guy who wrote this letter. Secondly, they tend to be nerds. Thirdly, they make very little money when they are young because they get so much education, even though their lifetime income is quite high. Yet I think it is fair to say that the economists I know have married stunningly well (myself included). We’ve all been puzzling over this fact for the fifteen years I have been in the profession. As of yet, no one has come up with a good explanation. I doubt it could be perfect foresight on the part of the women we marry."

• A concise Economist article (relatively easy read, I'd say, also for those outside academia or Economics) on the three Nobel Economists of this year. See also my previous post on the winners, with links to their homepages.

And the Econ winners for 2007 are...

.... Leonid Hurwicz, Eric Maskin and Roger Myerson, for "having laid the foundations of mechanism design theory". See more about this on nobelprize.org. Totally deserved, albeit they were not among the ones with the highest odds this year (so don't bet next time...). My (wrong) forecast can be a choice for one of the future years, though perhaps not for the next one or two.

My prediction for the Economics prize tomorrow

All right, here we go, as promised:

• The 2007 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel goes to Oliver Hart, Bengt Holmstrom and Oliver Williamson for their contributions to the theory of the firm.

Let's see how good of a forecast this is; in any case I am 100% sure that I will be able to refer back to this prediction for any future year, sooner or later they'll get the Nobel :-).

Quote for week 7th-13th of October '07

In order to cure most ills of human life, I require not that man should have the wings of the eagle, the swiftness of the stag, the force of the ox, the arms of the lion, the scales of the crocodile or rhinoceros; much less do I demand the sagacity of an angel or cherubim. I am contented to take an increase in one single power or faculty of his soul. Let him be endowed with a greater propensity to industry and labour; a more vigurous spring and activity of mind; a more constant bent to business and application.

David Hume

Quote for the previous week.

Nobel Econ odds

The most important Nobel prize will be announced on Monday. Now, if you did not already bet in the "Harvard pool" (at the very end of the day I didn't bet there for a most silly reason: I could not find in the whole of DK a 1$ bill to mail with my proposal :-)), here you can see other betting pools and the predictions of Thomson ISI. And as I previously said, tomorrow I'll announce my own, winning, forecast :-)

• Thomson ISI Econ predictions

• Intrade.com Econ bets and odds

• Ladbrokes.com Econ bets and odds

It looks like Elhanan Helpman & Gene Grossman have the best odds overall; indeed international trade seems to be a/the hype lately (and indeed Helpman and Grossman deserve the Nobel, sooner or later). Though my personal wish is that Dale Mortensen wins it this year (he will for sure win it in one the coming years, most likely joint with Peter Diamond and Chris Pissarides, for developing the search models; but why not just now?), especially since he just gave me excellent comments & critique at this (ex post very good!) "Labour Market Dynamics Growth" conference in Sandbjerg from where I returned yesterday-- and that despite the fact that I made a mess out of my presentation :-). Dale for Nobel!

Quote for week 30th of Sep- 6th of Oct '07

A paper in Economics which is not rejected should not be published

Ariel Rubinstein

Previous quote of the week.

Bet 1$ for your choice as this year's Economics Nobelist

This seems a serious thing- all funds go to charity and the winners of the pool select the precise charity destination. And there are only a few more days to go, so hurry up! This is via Greg Mankiw who also offers tips of favourite choices from last year... I'll place my forecast --which will obviously be the correct one :-)-- on my blog on October 14th, so that I do not influence others who might want to bet.

Econlinks for 04 Oct '07

• Try a free "publish or perish" software. Though it does pretty much the same (and only that, as far as I had time to test...) as scholar.google.com

• Rules vs. discretion: Posner continues Becker's entry on rules versus discretion in the context of central banks' decisions, but by doing so he also provides an excellent general discussion on the law and economics of the subject. I don't think anybody can beat Posner in that area.

• Vote (ex post I wouldn't bother...) for the free market hall of fame. Could have been done much better, the way they did this is a shame, really. And some of the results so far reinforce that...

• A September '07 profile of Robert Barro, yet another (potential) physicist turned (macro)economist :-).

On Cluj, property prices and (local) ambitions

I'd have many problems with some of the ideas put forward in there (eg. Emil Boc's role in Cluj's development for instance is highly overrated-- a cost-benefit analysis would most likely arrive at the opposite conclusion; the whole idea of the article is to convince people to invest in advertised property on that site, hence the general upward bias in the assessment; there is then the entirely ignored idea of spurious rises in property price, aka a possible bubble on everybody's language etc.-- but let's ignore all the shortcomings for the moment), but, overall, this short (two months old) article from 'Property Secrets' makes an interesting point. E.g., it sums up quite well the idea that Romanian cities have recently engaged in a tough (but welcome) competition to attract investment and expand (in multiple dimensions). And I tend to agree that Cluj-Napoca is, in several ways, on the right path; as for being the "second city" in Romania, that's a known known, so to speak, for some time (neah, neither Iasi, nor Constanta can beat us there, if you ask me). But the comparison term should be the world's league of second cities though; true ambitions should transcend national borders. Especially when it's about Romania's borders.

World's Rubik Cube Championship

Here, starts in 2 days in Budapest; Ernő Rubik will also be present this time. With quite complex competition rules... And fun statistics (e.g. youngest person to solve Rubik's is 4 years old)

Radiohead members should start PhDs in Experimental Economics

... because their recent idea makes for a super interesting experiment; we have all very high hopes :-). So go and download their latest album, "In Rainbows". Really no scam: it's all up to you, you can pay as much as you want (for the download version). Got the exciting news via via Greg Mankiw.