Market Power

Musings by an academic economist on the power of markets and the power over markets.

Saturday, March 26, 2005

The Battle of Fredericksburg

Here is an interesting webpage showing an animated map of the action at the Battle of Fredericksburg in the American Civil War. Fredericksburg, a big confederate victory, took place on Dec 13, 1862, fully 102 years and 1 day before your blogger popped into this world. The music is corny, but the map of the field and the red and blue bars that represent the various brigades is real nice. The flash animation that shows the movement of companies etc is also first rate. You get a nice feeling for where the units were in position, where they moved in attack and retreat, and how long the units fought. In this battle, union forces, commanded by General Burnside, attacked an entrenched position just beyond Fredericksburg. The confederates crouched behind a stonewall at Marye's heights, just beyond Fredericksburg, and several union brigades walked up to that position and got blown to bits.

Watch the little blue bars dissipate as they approach Marye's Heights. Keep in mind those little blue bars represent men who bravely obeyed orders and who were blown away. As William Tecumseh Sherman once said, "war is all hell."


Stupid Pet Trick

Here's one from the "Daddy. How did Rover die?" department. From MSNBC:

According to an Agence France-Presse story from Wavrechain-sous-Denain, France, a 3-year-old mastiff named Pako, once again abusing a lamppost as he lifted his leg and relieved himself, was electrocuted when his stream hit the metal pole, which (following an act by vandals) had a loose lamp wire touching it. [Daily Telegraph (Sydney, Australia)-AFP, 2-22-05]


Friday, March 25, 2005

Carl Edwards, Up and Comer

My former student at Mizzou, Carl Edwards, pulled off quite the feat last weekend. He won two races, one in the Busch series and one in the Nextel series. They were his first two victories in the top two NASCAR circuits. No-one had ever accomplished that feat before.

As Edwards was getting his start in racing, competing on dirt tracks in the Midwest, his mother persuaded him to print up business cards. He got a deal at a local printer - 2,000 cards for $100, with his picture one side and his résumé on the other.
I met up with Carl at the gym at Mizzou at about this time. He gave me one of these business cards and asked for my car repair business. My wife and I had just purchased two new automobiles and weren't going to need more than oil changes for a few years. So I never took my cars to Carl. But I kept the business card. I dug it out the other day and it's still in good condition. It's now stored away, sealed in a Ziploc bag. Something tells me to hold onto it for awhile.


Stupid Human Trick

People do stupid things sometimes. From MSNBC:

According to Transportation Security Administration officials, New Jersey psychiatrist Esha Khoshnu, in a stopover in Phoenix en route to a professional meeting in San Diego in February, got "mouthy and snippy" with Mesa Airlines agents who wanted to examine her luggage, reportedly saying, "(Even if) I had a bomb, you wouldn't find it." Agents, following TSA protocol, detained her, causing her to miss her flight, and her luggage, loaded onto another flight, was eventually detonated on the tarmac at Lindbergh Field in San Diego. [Arizona Republic, 2-18-05]


Ain't Trade Great

I briefly blogged about this really cool slot-car racing set. What got me thinking about slot-car racing tracks was this entry that I posted several weeks ago about how these toys drive cats nuts. Well, I have a cat. I also have two small durables. I am also a big kid at heart. So I decided I had to have one.

I ordered it from and have been tracking its progress to my house. I should be receiving it via Fed Ex later today. Here's what has gone on with it so far:

Date Time Location Service Area Checkpoint Details

Mar 24, 2005 09:44:25 PM Fernley NV USA SHIPPED
Mar 24, 2005 09:08:00 PM RENO NV US LEFT FEDEX RAMP
Mar 24, 2005 04:01:00 PM RENO NV US PICKED UP BY FEDEX

A long time ago, somebody somewhere realized that people might find slot car racing tracks to be a real cool toy, so they developed them. Over time, the products improved. Now, somewhere in this world, some company produced the set that is now en route to my house. Somebody in Reno Nevada, a person whom I will never know, got this package ready for me. Somebody else in Reno picked up the package and started it on its journey to my house. Since then, it has traveled to Tennessee, to Minneapolis, and it is now somewhere in North Mankato, Mn. All the while, people along the way, people doing their jobs, have made sure that this toy was being put on the right plane, being moved to the right shipping area, etc. And by the end of the day, my kids and I will be having fun with a new toy, my cat will be going nuts, and my wife will be getting the rolling pin out.

This is such a mundane transaction. Man wants toy. Man buys toy. Man plays with toy. These are such mundane transactions that we don't even think about all the activities that occurred to make the transaction take place. But these sorts of "mundane" transactions are what drive market economies, and they are the reason why market-based economies work so well in providing what people want. It's too bad that the "invisible hand" is invisible, because I'd like to shake it right now.

Ain't voluntary trade great?


Thursday, March 24, 2005

Big Talk

Tonight was the night. I gave my talk on public subsidization of sports teams and how those subsidies affect team franchise values. The gist: sports teams are not the boons to local economies they are purported to be. Team franchise values will be enhanced if they own stadiums relative to if they play in public stadiums. So why do they seek subsidies? Because the enhancement isn't large enough and because teams possess and use market power to extract subsidies from governments.

A nice complement to my talk was blogged today by John Chilton. It's well worth reading.


Faculty Continuing Education

Robert Lawson at Division of Labour has this piece on the recent flap at Ohio University between the faculty senate and the president of OU. Here is the story about the flap linked in that piece. At the heart of the matter is a concern over faculty taking classes from other faculty.

The trouble started when Faculty Senate began discussing a controversial new rule that would restrict how faculty members can further their degrees at OU. Faculty Senate has been working for some time on the measure, and the item was scheduled for a vote on Monday.

The reason for the change is that senate members worry it could be a conflict of interest, or at least create the appearance of a conflict, for faculty members to enroll in classes taught by their colleagues.

Supporters of the measure say this could lead to problems for professors teaching other faculty members, who then might at some point serve on their tenure committee. Or, they suggest, faculty members could simply feel uncomfortable teaching their colleagues. They also point out that having a faculty member in a class can change the culture of the classroom, and other students may think it's an unfair situation.
And then there's this from an opponent of the measure:
Cambridge argued that many faculty members come to OU with the intent of furthering their education. He said the new rule would hurt these faculty members and make it harder to recruit new ones. Cambridge added that it is not a conflict of interest for faculty members to further their education at their own institution, and he hoped Faculty Senate would at least allow the issue to be debated for another month before voting on it.
This raised my eyebrows. The PhD is a terminal degree and continuing education is part of the job description of academics - especially non-tenured ones (i.e. publish or perish). Does OU hire a large number of adjunct faculty or instructors, faculty often without the terminal degree? This isn't so in their econ department. Does OU use this as a recruiting tool? Perusing OU's faculty job opening web page, I didn't see much evidence of this. Of course the job announcements don't tell us much about what interviewees hear in the interviews. Is OU heavy on disciplines that require continuing education of its faculty?

When I finished my dissertation defense, the first place I wanted to go was here. The last place I wanted to go was to a classroom to take a class. What's going on at OU?


Wednesday, March 23, 2005

How Cool is This?

Toys rock!


Top 20 Monty Python Moments

From Entertainment Weekly:

20 Argument Clinic (Monty Python's Flying Circus DVD 9, Episode 29)
A troupe hallmark and a paraphrasing of what Python fans are thinking now. ''That's not one of the top 20.'' ''Yes, it is.'' ''No, it isn't.'' ''Is.'' ''Isn't!''

19 Kilimanjaro Expedition (MPFC DVD 3, Ep. 9)
Who did an explorer who sees double hire to find a crew he sent to build a bridge between Kilimanjaro's two peaks? ''The Arthur Brown twins, two botanists called Machin...and a couple of the Ken Spinoza quads. The other two pulled out.''

18 The Restaurant Sketch (MPFC DVD 1, Ep. 3)
A polite complaint about a dirty fork riles a cleaver-swinging cook and suicidal manager. Highlight: John Cleese's gasping moan, ''Oh, it makes me mad.''

17 Mrs. Premise and Mrs. Conclusion Visit Sartre (MPFC DVD 9, Ep. 27)
Who better to debate Jean-Paul Sartre's philosophy and burial methods for live cats than two shrieking housewives? The best of the sketches with the Pythons' drag alter egos, the Pepperpots.

16 The Visitors (MPFC DVD 3, Ep. 9)
The rudest drop-ins ever, including Arthur Name (''What's brown and sounds like a bell? Dung''), Mr. Equator (''[The seat's a] bit lumpy...ah, no wonder, I was sitting on the cat''), and his incontinent, beans-gobbling wife.

15 Every Sperm Is Sacred (Monty Python's The Meaning of Life)
Terry Jones' directorial high, this rousing musical number about the perils of masturbation from the 1983 film is Python irreverence at its most elaborate.

14 Interesting People (Monty Python's Flying Circus DVD 4, Episode 11)
A goofy TV panel features a hypnotist who puts bricks to sleep and a man whose cat flies across the room into a pail of water. (''By herself?'' ''No, I fling her.'')

13 Spam (MPFC DVD 8, Ep. 25)
Thanks to this operatic, Viking-sung ditty, the jellied canned luncheon meat will always be synonymous with classic comedy.

12 Self-Defence (MPFC DVD 2, Ep. 4)
What's a fruit-obsessed instructor's advice for dealing with an assailant attacking with a banana? (1) Shoot him. (2) Eat the banana, thus disarming him.

11 Crunchy Frog (MPFC DVD 2, Ep. 6)
Crunchy Frog, Cockroach Cluster, Ram's Bladder Cup with lark's vomit: This candy selection yields oddly tasty humor.

10 Stoning (Monty Python's Life of Brian)
You may be humming ''(Always Look on the) Bright Side of Life'' after the 1979 film, but the beard-wearing, rock-hurling women make the movie sing.

9 Eric the Half a Bee (Monty Python's Previous Record)
A rousing ode to a bifurcated bug from 1972: ''I love this hive employee/Bisected accidentally/One summer afternoon by me/I love him carnally.''

8 Nudge Nudge (Monty Python's Flying Circus, DVD 1, Episode 3)
''Nudge nudge, know what I mean? Say no more!'' Eric Idle's winking insinuator is the ultimate perv, even if the sketch ends, ''You've slept with a lady.... What's it like?''

7 The Lumberjack Song (MPFC DVD 3, Ep. 9)
A barber longs to be a macho woodsman, because ''I cut down trees, I skip and jump/I like to press wildflowers/I put on women's clothing/And hang around in bars.'' During some live shows, fans Tom Hanks and George Harrison both slipped into lumber gear to sing backup.

6 Fish-Slapping Dance (MPFC DVD 9, Ep. 28)
John Cleese and Michael Palin prance about, slapping each other with fish, naturally. Fifteen seconds of sublime silliness.

5 The Funniest Joke in the World (Monty Python's Flying Circus DVD 1, Episode 1)
A British joke so funny its audiences die laughing becomes a critical weapon against the Nazis during WWII. Not so the Germans' failed retaliation: ''Der ver zwei peanuts, valking down der strasse, and von vas...assaulted! Peanut.''

4 Dead Parrot (MPFC DVD 3, Ep. 8)
''If you hadn't nailed it to the perch, it would be pushing up the daisies.... This is an ex-parrot.'' The legacy of John Cleese's complaint to Michael Palin for selling a stuffed pet is marred only a bit by a listless reprise on a 1997 Saturday Night Live.

3 Guy de Loimbard's Castle (Monty Python and the Holy Grail)
''Your mother was a hamster and your father smelled of elderberries'' from the 1975 film remains the gold standard of verbal abuse.

2 The Ministry of Silly Walks (MPFC DVD 5, Ep. 14)
Cleese's giant steps are equally hilarious on the TV show and in the '82 concert film Live at the Hollywood Bowl.

1 The Spanish Inquisition (Monty Python's Flying Circus DVD 5, Episode 15)
Red-caped crusading cardinals threaten torture with (gasp!) the comfy chair! Unforgettable for one reason: torture by kitchen drying rack, and Michael Palin's inability to count...two! Two reasons!

There are others worth mentioning, many worth including:

The Bishop. Confuse-a-cat. Lemming of the BDA. The Blancmange. The Cheese Shop. Snivelling Little Rat-Faced Git (it's not easy growing up with a surname of Git). St. Looney of the Cream Bun and Jam. Dennis Moore (this redistribution of wealth is trickier than I thought!).


There's Snow Business

OK. Here's one of the pictures I took of our recent snow storm.

Pretty exciting stuff, eh?


Tuesday, March 22, 2005


From this morning's Mankato Free Press:

Greater Mankato Training Camp, LLC, has the city of North Mankato's best wishes, plus the possible use of police reserve officers and city equipment.

It just can't have any money.

Representatives of the organization, which formed in late 2003 after reports that the Minnesota Vikings might withdraw their training camp from Mankato, asked the North Mankato City Council for $10,000 annually for three years.

The Vikings have held their training camp at the Minnesota State University, Mankato campus for over 40 years. Last year, the Vikings shopped the camp around to prospective cities in an attempt to get public subsidization for the camp - market power at work. Mankato ended up chipping in. But North Mankato didn't. Do North Mankato officials see the light or are they just free riders?

North Mankato has only two hotels. The rest of the hotels in the micropolitan area are in Mankato. Most of the bars and restaurants that would be frequented by camp goers are also in Mankato, so I doubt that North Mankato would feel much of any spillover that might exist (I say "might exist" because I am skeptical that the camp nets $5 million in additional spending in the Mankato region).


Fly and Be Free

Have you ever wanted to get away?


My Favorite Athletic Nicknames

I'm procrastinating again. This is a non-exhaustive list and is in no particular order.

Benson (Omaha, Ne) Bunnies
Hickman (Columbia, Mo) Kewpies
UC Santa Cruz Banana Slugs
University of Idaho Vandals
Wabash College Little Giants
Centenary College Gents (Men's)
Centenary College Ladies (Women's)

What's your favorite sports team nickname?

My favorite sports chant: Let's Go Peay!


Beer Snob

The Econoclast made me do it! I took the liquor test. Here's how I rated:

Congratulations! You're 100 proof, with specific scores in beer (140) , wine (66), and liquor (52).

All're getting into the harder stuff. A good martini, a Mai Tai or straight shots of hard liquor is what you're into.
Um, no. Give me me tired, your poor, your pale ales, barleywines, imperial stouts, IPA's, scotch ales, rye ales, licorice stouts, milk stouts, oatmeal stouts, pumpkin ales, Bocks, pilsners, and steam beers. Hell, give me your Grain Belt! I am a beer drinker!
My test tracked 4 variables How you compared to other people your age and gender:
You scored higher than 13% on proof
You scored higher than 98% on beer index
You scored higher than 86% on wine index
You scored higher than 85% on liquor index
I rarely drink liquor. I like a wine now and then. But dadgummit, beer is my adult beverage of choice. Currently, I have this, this, this, this, this, and this in my basement. The best brewpub I've ever been to is this one.


Who Attends Games and Why

Proponents of public subsidies for professional sports teams often laud the tourist attraction provided by said teams. Two important questions that need to be asked are 1. what proportion of people in attendance are tourists and 2. why are they there?

Skip Sauer, one of my co-bloggers at The Sports Economist, alerted me to this paper by Jahn Hakes and Kyle Hutmaker that examines the effect of travel costs on the demand for season ticket sales for the Atlanta Braves. One of the things they mention is that 92% of the season ticket sales are made by people whose zip code is within 100 miles of the home team's stadium. Granted, this study only examines one team in one year, it only examines season ticket sales, and there may be discrepancies between where a person is travelling from and where his/her home zip code is. Hakes and Hutmaker have attempted to control for these problems as best they can and they provide evidence of who buys tickets to regular season baseball games: locals, largely.

As far as sports as a tourist destination, I just got my registration for this summer's WEA conference in San Francisco (where I'll be presenting an as-yet-to-be-written paper comparing arbitration and free agency in baseball). One of the events listed on the conference brochure (which I would love to take in) is a Reds-Giants game. Most of the conference attendees who go to the game will be considered out-of-towners, but it would be a mistake to include us in an estimate of the tourist impact of the Giants. None of us travelled to San Francisco to see the game and decided to take in an economics conference while we were there. Instead, it is the other way around.


Monopoly Power

If I want to get my home number unlisted from the local phone directory, the local phone company is going to charge me 75 cents per month to have that done. I think it's safe to say that the marginal cost of the resources required *NOT* to publish my name in the phone book is less than 75 cents.

Ah, monopoly power at work.


Monday, March 21, 2005

Economists as Politicians

I ran across this at the New Economist.

1. Economics is the study of trade-offs, of costs. ...Politicians, of course, hate the idea of trade-offs and costs.

2. Economists love counter-intuitive ideas. ...This leads to us stressing paradoxical notions – like the notion that outsourcing can be a good thing. Good politicians, by contrast, prefer sound-bites that corroborate the public’s prejudices.

3. Economists are like photographers - we love simple models. In particular ...we’ve loved models that yield bold, controversial but testable predictions.

4. Economists start from assumptions – or better still axioms – and see where they lead. ...Sometimes, though, they can lead to trouble.

5. Economists have a simple, brutal view of human nature – everyone’s rational (though not knowledgeable) and out for themselves. This makes us comfortable with conflict and argument, and uncomfortable about building alliances.

His points are valid. Most economists are by nature spectical, analytical and counter-intuitive. We are much more comfortable being critics than cheerleaders. That makes it difficult to advocate second-best solutions or simple minded policies. But while economists may not be natural politicians (with some notable exceptions), they are a vital part of any team of political advisers.

Larry Summers comes to mind. King at SCSU Scholars has some thoughts on this subject. One economist that did a good job in a political job is Richard Wallace, former Chancellor of Mizzou. While I was there as a graduate student, Dr. Wallace maintained an office in the department of Economics although I never saw him in our building. I did not have many interactions with him and I only went to a few of his speeches. He was always careful with what he said (i.e. meant that his talks weren't exciting). But he seemed to know what to say and how to say it. Mostly, I don't recall any big controversies surrounding him. Like having a football game officiated by the best referees, you know they did a good job because you didn't realize they were there.


Improbable Shot

In your wildest dreams, did you ever hit a shot like this that sent your team to an overtime in the championship game?