Homines libenter quod volunt credunt
Posted in incentives on Aug 7th, 2011
The Endangered Species Act is infamous for the perverse incentives built into it (these come from the fact that it imposes costs on a very small minority of people for something that is presumably a national or global public good, but this is not surprising in our modern thugocracy). But here is another perverse incentive […]
Posted in incentives, Politics on Apr 11th, 2011
In 1910, it is estimated that there were 13 million Americans in Mutual Aid Societies (things like Life Insurance societies, fraternal organizations, etc.). That year, the US census estimated that there were 92 million Americans. Therefore about 14% of Americans were members of these voluntary aid societies. This was at a time when America was […]
Posted in Education, incentives, You Can't Have it Both Ways on Mar 30th, 2011
They both act irresponsibly with other people’s money. I am sure this is playing out in many states right now as it is here in my home state of New York. Our state is “suffering” through a projected $10 billion deficit. Last year, the state estimates that it raised $134.6 billion in revenue. The state […]
Posted in incentives on Mar 25th, 2011
I am increasingly convinced that this odd idea has merit. It might be the case that the best hope for developing “clean” and affordable energy technologies would be lower fossil fuels prices. You heard me right. Lower.
Posted in incentives, You Can't Have it Both Ways on Mar 12th, 2011
Some narratives of the recent financial crisis include criticizing the Ratings Agencies for being very generous in their awarding of AA and AAA ratings to (what turned out to be) risky mortgage securities. One reason for this, it is asserted, is that the agencies were paid by the bond issuers rather than the bond investors. […]
Posted in incentives on Feb 23rd, 2011
A few weeks ago in class I was discussing what I refer to the, “you might as well do something worse” (i.e. the marginal cost equals zero) problem in deterrence. I am sure there is a fancy real name for it, but the simple idea is this: whenever you have a maximum penalty for some […]
Posted in Environment, incentives on Dec 10th, 2010
But rather a perfectly sighted man putting on blinders. The following e-mail exchange could just as well have happened in your hometown. I encourage you to do the same. Here is a simple conversation I had with the City of Rochester regarding its curbside recycling programs. It’s not like the city does not provide lots […]
Posted in Environment, incentives on Dec 8th, 2010
It is not at all clear to me that comparing a world with mandated curbside recycling to a world with no recycling (mandates) that we get reductions in MSW generated. At least it is an empirical question. What the heck am I talking about? You might think that by having recycling, less stuff gets put […]
Posted in Environment, incentives on Dec 6th, 2010
In Friday’s post we discussed one problem with measuring the success of recycling programs by showing people how much material was collected. Today, let’s think about another related problem. Good principles of economics students understand the law of supply – which tells us that if producers are able to secure a higher price for a […]
Posted in Health Care, incentives, You Can't Have it Both Ways on Oct 6th, 2010
It is well known (apparently) that America is suffering an obesity epidemic of unprecedented proportions. And I’ve heard all kinds of proposals for how to deal with it, ranging from the seemingly innocent (e.g. providing more information in school about the risks of obesity) to the more draconian (banning trans-fats, or worse). My personal view […]
