The Obama Campaign has a new and clever offer to encourage donations. The candidate promises to sit down for a "relaxing" dinner with four ordinary Americans/donors in order hear their views and concerns. We are all now encouraged to send a contribution before a given deadline in order to get a chance to be invited to the next intimate dinner with the candidate. The lucky winners will have their trips and meals paid for by the Campaign. The advertisement, if that is the right word, is careful not to say this is a lottery. I do not mean to turn this blog post into a campaign site, especially because we at Chicago take (justifiable) pride in Senator Obama, and also because to link here to the site, might violate some campaign finance rule, but you can see the offer for yourself by Googling the candidate's name and "dinner" or by navigating through the campaign website.
Continue reading "The Obama Lottery" »
It's been a while since we brought you a podcast, so here goes. On Tuesday, April 10, 2007, Richard Epstein, James Parker Hall Distinguished Service Professor of Law, delivered a Chicago's Best Ideas talk entitled "The Blink of an Eye: Intuition, Custom and Protocol." Several of our faculty members, including Dean Levmore, have been doing a lot of work on how information is people use the information they get to make decisions. Richard Epstein's take on the subject is, as always, worth your time. Listen to the talk here, and review the blurb from the posters after the jump.
Continue reading "Epstein CBI: Intuition, Custom and Protocol" »
Suppose that a country, Y, is threatened by a natural phenomenon, such as flooding. Y lacks the technological know-how to build sea walls, so it pays another country, Z, to build the sea walls for it. We would not normally criticize Z for charging Y to build the sea walls, even if Y is a poor country.
Now imagine that Y and Z share the coastline. The expected flooding imposes different costs on both countries: $90 million for Y, and $10 million for Z. And imagine that a single flood warning system would be the most efficient way to minimize these costs. A high-quality system would eliminate all of the losses but would cost $30 million. A low-quality system would halve the losses but cost only $2 million. Which system should be built?
Continue reading "Should China (and the U.S.) Be Paid To Abate Greenhouse Gas Emissions?" »
Things have turned quite interesting in the upcoming Federal
Communications Commission auction of new spectrum. Google announced
today that it was willing to bid at least $4.6 billion in the upcoming 700 MHz
auction, so long as the spectrum was sold subject to four open platform
requirements. At first glance, that must seem odd: why does Google want
restrictions imposed that it could simply implement as the auction winner? The
point of course is that Google wants these requirements imposed on any winner, not just itself. Google
might be happy to go into the spectrum business but it clearly believes that it
benefits if open-platform spectrum is created. Google has effectively offered
the FCC a price floor for the spectrum, so long as it gets the rules that it
wants. What should the FCC do?
Adding the open-platform requirements will almost certainly
reduce the revenues that the FCC will collect in the auction. Many of the
incumbents may be discouraged from bidding under the open-platform
requirements. But revenue maximization shouldn’t be the government’s chief
concern: the government should be in the social welfare business and it should
be willing to accept reduced revenue if it can buy enough telcom competition.
Continue reading "The Google Spectrum Gambit" »
Recent news has focused attention on a Virginia law, effective July 1, that dramatically raises fines for reckless driving, including a speeding violation at more than 15 miles per hour above the speed limit. The legislative history and statutory language makes clear that the fines are a revenue-raising measure, and they therefore raise the interesting question of whether we need to separate taxes from penaltiies, or even deterrence. (I will ignore here the interesting point that the legislation was introduced by a legislator whose law firm specializes in traffic law and will therefore see much more business in defending drivers who have more reason to dispute citations.) As if to confirm the revenue-raising goal, the fines are earmarked for transportation projects, and are to be applied only to Virginia residents on Virginia roads. At least four other states have "driver responsibility laws" that apply to out-of-staters as well as residents. I don't think this last provision was necessary for constitutionality, but let us just accept the resident/nonresident distinction as aiming to avoid claims of discriminatory enforcement against out of state residents. I return to the limitation to Virginia residents below.
Continue reading "(Virginia's Driver Responsibility) Fines and Taxes" »
I was in a Blockbuster video store this morning for the
first time in a very long time. In my house, I run our Netflix queue, while my
wife makes the rare foray to Blockbuster—usually for something kiddish. But I
did the return this morning and actually went in to look around. What caught my
eye immediately are the new Blockbuster exclusives that it is pushing heavily
in its stores. A quick online tour makes clear—sort of—what is going on.
Continue reading "Blockbuster Exclusives, the First-Sale Doctrine and Competition over Content" »
What makes the PlayStation 3 tick? The Apple iPod? Your
BlackBerry? Software, or, more precisely—and
much more interestingly—a
software platform makes the hardware sing and sits in the middle of a business
ecosystem of users, hardware makers and software developers. An invisible
David S. Evans, Andrei Hagiu and Richard Schmalensee hold a
academic and consulting positions. They are nicely-situated to bring to bear sophisticated
theory—here, the rapidly
developing economics of multi-sided markets—and a substantial amount of real-world contact. They do exactly
that in their new book Invisible Engines:
How Software Platforms Drive Innovation and Transform Industries.
Continue reading "Book Review: Evans, Hagiu & Schmalensee, Invisible Engines: How Software Platforms Drive Innovation and Transform Industries." »
According to conventional wisdom, the Supreme Court is equally divided between a conservative wing and a liberal one, with Justice Anthony Kennedy acting as the swing voter. But there is something extremely strange about this view of the current situation. By the standards of the recent past, the liberal wing isn't liberal at all.
According to conventional wisdom, the Court has long been evenly balanced between left and right, and it has finally shifted a bit to the right under Chief Justice John Roberts. But there is something strange about this view as well. The Court shifted quite dramatically to the right between 1972 and 2000, indeed between 1980 and 2000, and yet people continued to speak of an alleged "balance" even as the dramatic shift was underway.
Continue reading "The Supreme Court: What Conventional Wisdom Misses" »
This is one of a series of posts; the last post was here.
The new tools of creation and distribution make this the
best time ever for those willing to give away their content. But professional
content creators have never faced a greater challenge. Part of this is greater
competition from the newly empowered amateurs, the new content professionals of
the Internet era. Competition is healthy, and especially so given the poor
track records of the gatekeepers in choosing content. The “failure” rate on professionally
chosen music is extraordinarily high. But I suspect that most of the
professionals believe, rightly or wrongly I do not know, that their content
will win in the marketplace against the amateurs.
Instead, the greater challenge to professionals is the
collapse of the copy and the ability of content users to unbundle content and
ads. If content creators cannot control copies or cannot ensure that ads remain
attached to content, how will content creators get paid? Content producers have
looked to technology to bolster the copy as copy and to limit whether users can
unbundle ads and content. It is important to see the systematic challenge
Continue reading "Why Do They Poke Me in the Eye?" »