Wholly Bagels in Wellington has this great student special which I often take advantage of: in the last hour before closing they charge 30% less to students. Much as I love the special, I can’t figure out why they run it that way. I can think of three reasons they might price discriminate in this fashion: Read more
Eric Crampton points to an example of offsetting behaviour in driving reported by Popular Mechanics:
…modifying roads and intersections so drivers are less comfortable—by making driving, in some ways, more dangerous—forces people to slow down and pay attention, producing a change in behavior that, paradoxically, results in more safety. This is also true for pedestrians, who Vanderbilt says are more cautious away from crosswalks than within them because they don’t know if cars will actually stop.
It reminds me of the idea of shared space that’s gained some popularity, particularly in Europe. Read more
Ezra Klein reports that
A review of seventy-four clinical trials of antidepressants found that thirty-seven of thirty-eight positive studies were published. Of the thirty-six negative studies, thirty-three were either not published or published in a form that implied a positive outcome. … To a doctor reading the published literature, 94% of the trials conducted were positive. In reality, 51% were positive.
He concludes that “[i]f the pharmaceutical companies will not fund research, then someone else must.” I’m not so sure. Read more
Apparently humans are more competitive when there are fewer of us competing for the prize:
Students taking standardized tests in more crowded venues got lower scores. Students asked to complete a short general-knowledge test as fast as possible to win a prize if they were in the fastest 20 percent completed it faster if they were told that they were competing against 10 people rather than 100.
Intuitively, I guess that we feel more likely to win if we have to beat fewer people. With a smaller group to compete against, the probability of having a low ability group is greater than with a larger sample where ability is likely to be closer to the population distribution. I was going to class this as behavioural economics, but I suppose it just shows our intuitions to be more rational than I expected!
Google Books continues to expand their range of available material and it’s great to see. Not only does it increase access to information but, for the material that you have to purchase, it increases the efficiency of the market for information. Previously you had to buy an entire textbook, or purchase a membership at an academic library, to get access to snippets of the text. Now you can buy just that snippet that you want on Google Books! Who does that help? Well, pretty much everyone in the market for information, actually. Read more
In a comment to a post on Anti-Dismal about a post on the Standard, which I have also commented on here, Clinton Smith said:
If you think that macroeconomics is the same as microeconomics because of where the word economics comes from, you’ve got a long way to come.
I thought I should lay down what I think – and so I did in the comments at Anti-Dismal:
Methodologically macroeconomics should simply be applied microeconomics. Microeconomics is the general discipline, and macroeconomics is a specific application (and set of value judgments) that can be used for (economy-wide) policy.
Trying to do macro without an understanding of micro is like trying to fix a machine without knowing how it works – hence why so many “non-economists” (I hate that term) get lost.
This is how the macro-micro distinction rolls around in my head – but of course, it is not necessarily that simple. Do you guys have any idea about how I could improve this distinction – I think a set of posts might be in order for discussing this issue.