A sabbatical note

Modern life is full of bustle and inattention, with too many activities and tasks and opportunities competing for our limited cognitive bandwidth. Even in the relatively staid academic life this is true; my regular teaching requirements and other campus commitments have meant that my mind is stretched, particularly over the past few years as some of the aspects of my job have shifted around. I have to fit in research when and where I can, and for the past few years it’s felt like the space for it is in the interstitial bits between my other responsibilities. Combine that with my natural inclination towards short attention, encouraged by the Internet, and I haven’t made the time or mental space to work on new ideas. But for the next few months, that will change.

One of the most appealing aspects of an academic job is the opportunity to take a sabbatical, and I am taking one now. I am thrilled and honored to be visiting in the Department of Political Economy at King’s College London, where I’ll be working with my good friends Mark Pennington and Paul Lewis. I’ll be here for six months, and am planning to work on a couple of different papers on the effects of regulation on experimentation by producers and consumers,alternative regulatory frameworks that could move us toward permissionless innovation in the electricity industry, and regulation and innovation in the residential rooftop solar market.

The KP Spouse (who will work in his regular job from London) and I left Chicago last Monday, laden with luggage and bicycles. After a week of grocery shopping, exploration, and a trip to Edinburgh to celebrate our godson’s birthday, I have been welcomed enthusiastically by my colleagues at King’s this week. It’s a diverse department, full of economists and political scientists working at the intersection of various theoretical strands, and I’m looking forward to the exchange of ideas and cross-pollination. And to living in London, of course, one of my favorite places in the world.

Please stay tuned …

CES’s seamy underbelly

Lynne Kiesling

OK, I just effused a bit over a new product introduction at the Consumer Electronics Show. Time to balance my enthusiasm with a glimpse of CES’s seamy underbelly. You’re surprised that the largest consumer electronics trade show in the world, held annually in Las Vegas (of all places), has a seamy underbelly? Want to buy my bridge?

It probably has several seamy underbellies, but the one that caught my eye this afternoon is misogyny, as recounted with some wonderful and entertaining writing by Liz Gumbinner (AKA CoolMomTech). Trade shows are infamous for such things, right? Booth babes, speaking panels where all of the speakers are men, and so on. Liz’s post recounts a few of the instances of misogyny she encountered at CES2013 this week, from almost-innocuous “oh, you must not have been able to get the phone cover off because you didn’t want to break your nails” to some truly appalling encounters. Like this:

Oh, here’s an easy one to start with: If a tech publisher tells you she has four children, the correct response is pretty much anything other than, “Wow. You must have a lot of sex.”

I mention her post here for two reasons. First, big shout out for great writing; I’m a scan-reader, and I was hanging on her every word. Almost never happens for me. Second, she highlights some important economic implications of such behavior:

Tech marketers and conference track programmers, I have some really simple advice for you: It’s time to move on from 1954. If not for feminism or for social good, you need to do it for your own business.

According to research from the very organization putting on the show, women spend more on tech than men. They’re involved in 89% of the consumer electronic purchase decisions. They own smartphones and digital cameras and laptops and tablets. They buy apps like crazy. And you know? They’re writing about technology too.

I can guarantee that if Lindsey Turrentine or Molly Wood or Xeni Jardin or Jolie O’Dell decide your product is a great one, you will sell a crapload of them. Enough even to pay for lap dances for the whole sales team.


Poor market design causing high prices in Diablo III auction house?

Michael Giberson 

I don’t play Diablo III, but I do follow price gouging discussions online, which led me to this post on the Diablo III discussion forum: “Auction House and Price Gouging.”

The initial complaint comes from a player trying to equip a new character through purchases in the Auction House, an in-game player-to-player trading mechanism, and finding prices were much higher than just a few weeks earlier.

WTF is going on? When I first got this game (release), I thought (despite all the issues) that the Auction House was a wonderful implementation …

I was able to gear up my Monk even at lower levels for fairly cheap. You have to remember that it was my first character and gold was scarce/difficult to come by, but still.. items in the AH were affordable. This includes +dex rares, IAS blues, +vit rares, etc.

3 weeks later and I finally roll another toon, only to find out that low level items (even in the 5-10 lvl range) are BEYOND inflated. I couldn’t even find blue +movement speed boots for my new DH without dropping 3-5k gold…

It seems like people price their gear (even low level gear) depending on what other people price their gear, so it almost feels like the sense of community (it’s difficult to explain, but I felt it in the beginning) has been replaced by $$$ signs, lol.

Price gouging leading to a loss of the sense of community? Sounds like someone has been reading his Michael Sandel.

Diablo III auction house screen shot from MMO News

A few economic explanations are offered in the replies, ranging from the basic microeconomics (“supply and demand”) to intermediate macroeconomics level (gold farmers are bringing too much money into the game, causing inflation).

The advanced economics explanations focuses on market design choices made by the game designers. Each player can only offer up to ten items at a time, and once offered the item cannot be replaced by another offer for 36 hours.

When the game was first released, many players were low level, no one had a lot of gold, and low-powered items were placed into the market as characters advanced and obtained better quality items. As characters became even more advanced, continuing to accumulate a mix of low-, medium-, and high-quality items, the 10-item limit becomes binding.

Now, to sell a low-quality item of the sort a beginning character could use, the player has to forego the opportunity to sell medium- or high-quality items at higher prices.

The opportunity cost of selling low-level items has risen, and the price follows.

NOTE: Diablo III will soon feature a real money Auction House.

NEWER, RELATED: Game-industry market design job openings for economists.

Do you want to be intellectually honest?

Michael Giberson

Some techniques for checking the tendency toward extreme partisanship, which can be a ready source of intellectual errors (source):

•Take opposing points of view at face value.

It is more comfortable to treat opposing points of view reductively. That is, rather than deal with a different viewpoint, we prefer to explain it away. “They just want power.” “They just serve special interests.” “They don’t believe in science.” “They are socialists.”

Taking opposing points of view at face value means that we try to pass the ideological Turing test. Could my characterization of another ideology allow me to pass as a proponent of that ideology? Could an opponent’s characterization of my ideology allow that person to pass as someone like me?

•Police your own side.

In political debates, we put a lot of energy into pointing out the errors of our opponents. When somebody writes an op-ed exposing the “myths” that surround an issue, the purpose is to debunk the other side, almost never to question one’s own allies….

Imagine instead an environment in which we primarily tried to expose intellectual error on our own side. In street basketball terms, you “call your own fouls.” The onus of calling liberals’ intellectual fouls would fall on liberals. The onus of calling conservatives’ intellectual fouls would fall on conservatives.

Policing your own side would require a conscious effort to reverse the tendency toward confirmation bias. We would have to search as hard for holes in our allies’ arguments as if they were opponents’ arguments. If the goal is to improve public discourse by removing improper arguments, we are much more likely to succeed by having each side call its own fouls than by having people call fouls on the other side.

Street basketball with teams calling fouls on one another would probably degenerate into unsettled arguments. That is, it would start to resemble politics.

•Scramble the teams.

Many years ago, some men in our neighborhood started a pickup softball game on Sundays. We quickly realized that if we formed regular teams, antagonisms would fester. Instead, each week we formed new teams on a different basis, such as odd-numbered birthdays vs. even-numbered birthdays. Scrambling the teams kept the games friendly.

Much of our partisanship reflects emotional loyalty to the ideological group with which we identify. To scramble the teams, we would need to foster situations in which liberals develop emotional bonds with conservatives.

Emotional bonds develop when people work towards a common goal. Thus, in the past, military service and foreign threats have served to break down ideological differences. Historians view World War II as a period in which American unity was strong….Overall, the end of the Cold War, which reduced the sense of common threat, may account for some of the rise in partisanship within the United States in recent decades.

We need to find a substitute for external threats as a social bonding agent. Maybe some ideological peace could be bought by having liberals and conservatives who both root for the same sports team get together during important games. Perhaps liberals and conservatives could actively participate in charitable endeavors that both can endorse.

The work of [Jonathan] Haidt and other psychologists is persuasive and disturbing. It exposes a tendency to form ideological tribes that use moral arguments as rationalizations. Tribes will go out of their way to misunderstand one another. If we want to get along better and resolve differences more easily, it will take conscious effort to overcome tribal behavioral instincts.

From: Arnold Kling, “The Tribal Mind: Moral Reasoning and Public Discourse,” The American, Thursday, April 26, 2012.

Hitting the big time, living the econoblogger dream

Michael Giberson

From the Inbox earlier in this week comes news that Knowledge Problem is one of the blogs monitored and excerpted from time to time by EconAcademics.org, a blog aggregator being run by the Economic Research Division of the Federal Reserve Bank of St. Louis. You can skip the noise and get right to their KP posts by using this link.

According to their self reporting: “The primary goal of this blog aggregator is to enhance the discussion of economics research in the blogosphere by making it easier for the curious reader to find high-quality content. A secondary goal is to encourage discussion of economic issues based on academic research, instead of political arguments.”

Check out their list – we are currently #141 in their list of 289 monitored blogs, putting us ahead of such estimable blogs as Marginal Revolution and Wired Science. (Did I mention the list is in alphabetical order? In any case, we could rename ourselves to AAA Knowledge Problem and leap into the top 10. That would be really hitting the big time…)

BTW, I’ll thoroughly endorse their disclaimer, at least with respect to our posts: “Views expressed do not necessarily reflect official positions of the Federal Reserve System.” I’ll add that views expressed by the Federal Reserve System do not necessarily reflect official positions of the Knowledge Problem blog.

IHS’s great summer workshop for college teachers

Michael Giberson

Last summer I had a lot of fun at the too-short IHS Liberty and the Art of Teaching workshop. Well, I say “too short,” but the truth is that they packed so much information into 2 days that I couldn’t absorb it all.

I did absorb a few bits, though, as related in my reflection on what I gained from the teaching workshop, which has been posted at Kosmos Online. The workshop was a great production on IHS’s part, filled with teaching advice backed by years of successful practice (and in many cases, also backed by systematic study of student progress and retention).

As reported in my Kosmos post, I used what I learned at the workshop to reorganize my U.S. Energy Policy and Regulation course as well as (less successfully) to tweak my Energy Economics course. In addition, I’ve made several more minor adjustments in classroom practice, partly due to presentations at the IHS workshop and partly as a consequence of reading Teaching With Your Mouth Shut prior to this Spring semester.

I continue to be amazed at how willing universities are to push graduate students into the classroom with little actual guidance on successful teaching, at how often PhD programs will send their students out into the academic workforce with little training in this key job skill, and at how little supervision universities provide to newly-hired teachers fresh from the graduate programs that provided little training in teaching well. Teaching well can be hard work, yet often it is treated as so obvious as to be beneath serious concern. The IHS workshop helps fill the gap.

They are taken applications for the Summer 2012 workshop up until April 15, 2012.

The Matt Ridley Prize for Environmental Heresy

Michael Giberson

The Spectator magazine in the U.K. announces the Matt Ridley Prize for Environmental Heresy:

Matt Ridley has long deplored the wind farm delusion, and was appalled when a family trust was paid by a wind farm company in compensation for mineral rights on land on which it wanted to build a turbine. The trust would be paid £8,500 a year for it, and Matt couldn’t abide the idea of profiting — even in part — from this. So he is donating £8,500 in an annual prize to be given to the best essay exposing environmental fallacies. Entries open today.

The rules are simple. We invite pieces from 1,000 to 2,000 words in length, to gore one of the sacred cows of the environmentalist movement. Matt says more in his cover essay for the new Spectator (which you can also read on Facebook) : ‘There are many to choose from: the idea that wind power is good for the climate, or that biofuels are good for the rain forest or that organic farming is good for the planet or that climate change is a bigger extinction threat than invasive species.’ A shortlist of six will be put to a panel of judges and the winning entry will be published in the magazine in July.

Entries … close on 30 June 2012.

More details at the first link above. £8,500? That is more than US$13,000. Hmmm, which sacred cow do I want to gore?

Matt Ridley is the author of several books on science and society, including The Rational Optimist, The Red Queen, The Origins of Virtue, and Genome.