Market Power

An Honor

From the campus inbox.

Dear Professor Miller,

Congratulations!  You have been selected as the  University of Nebraska at Omaha Department of Economics 2009 outstanding alumni.  While this honor may come as a surprise, Professor Art Diamond nominated you for this award based on the information contained in your web site.  

This award will be presented at the UNO Economics Honors and Awards Banquet, on March 29 at 6:30 PM at the UNO Thompson Alumni Center.  It is traditional for the recipient of the outstanding alumni award to speak at the banquet about his/her career, the role of economics in that career, and any reflections on his/her studies at UNO.  While we would be honored if you could attend the banquet, we will understand if you are unable to attend.  If you are unable to attend and are willing to send me some written remarks, I will arrange for them to be read at the banquet.

Again congratulations.  I look forward to hearing form you.

Donald N. Baum
Chair Department of Economics and Real Estate

Thanks to the department for choosing me and thanks to Art Diamond for nominating me.  Here's Professor Diamond's blog.

The Rocky Mountain News Closes

Here's their story.

It is with great sadness that we say goodbye to you today. Our time chronicling the life of Denver and Colorado, the nation and the world, is over. Thousands of men and women have worked at this newspaper since William Byers produced its first edition on the banks of Cherry Creek on April 23, 1859. We speak, we believe, for all of them, when we say that it has been an honor to serve you. To have reached this day, the final edition of the Rocky Mountain News, just 55 days shy of its 150th birthday is painful. We will scatter. And all that will be left are the stories we have told, captured on microfilm or in digital archives, devices unimaginable in those first days. But what was present in the paper then and has remained to this day is a belief in this community and the people who make it what it has become and what it will be. We part in sorrow because we know so much lies ahead that will be worth telling, and we will not be there to do so. We have celebrated life in Colorado, praising its ways, but we have warned, too, against steps we thought were mistaken. We have always been a part of this special place, striving to reflect it accurately and with compassion. We hope Coloradans will remember this newspaper fondly from generation to generation, a reminder of Denver’s history – the ambitions, foibles and virtues of its settlers and those who followed. We are confident that you will build on their dreams and find new ways to tell your story. Farewell – and thank you for so many memorable years together.

Here's the front page from the Newseum.

Here's the Denver Post's front page.  Here's the Pueblo Chieftain's. 

Creative destruction?  Destruction, yes.  Creative, probably.  Although I'm sad to see it go it doesn't really surprise me.  I'm no expert on newspaper economics, but I always thought it was something of an oddity for Denver to have two major daily newspapers for so long.  Local newspaper markets seem like something of a natural monopoly to me.

I travel to Colorado to see my sister every few years, so I keep up with Colorado news more frequently than most.  The RMN was one of those papers/sites that I would check when I wanted the Colorado angle on stuff, but no more.

Technology and Ticket Pricing

Technology has changed the way sports teams view ticket scalping.  Now that they can get in on the act, scalping isn't the pariah it once was.  Technology is also changing the way at least one MLB team is setting its ticket prices.

Qcue LLC, founded in 2007, completed a season-long behind-the-scenes trial with the San Francisco Giants this year. Next season, the company plans to provide its application that, during the days leading up to a ball game, adjusts the cost of single-game tickets based on 20 variables that affect demand, such as the weather and the opposing team’s record.

The so-called dynamic pricing, which would be applied to 2,000 slow-selling seats, puts the Giants in position to be the first Major League Baseball team to implement such an automated pricing system.

And the six-person Austin company is in the thick of things by changing the 132-year MLB practice of setting seat prices before the season starts. The success of the practice will depend on fan reaction, CEO Barry Kahn said.

Here's an earlier TSE post I wrote on this subject.

It wasn't all that long ago that any type of variable pricing in MLB was discouraged by the league office.  The thought was that MLB didn't want to acknowledge the fact that different teams have different values to fans.  But that type of policy leaves a lot of cash "on the table," so to speak.

HT to Chris Kaufmann.

It's Not Just the Size of the Tow Truck...

From the AP:

The Democratic-controlled House pushed through a $410 billion measure Wednesday that boosted domestic programs, bristled with earmarks and chipped away at policies left behind by the Bush administration.

The vote was 245-178, largely along party lines.

Republicans assailed the measure as too costly — particularly on the heels of a $787 billion stimulus bill that President Barack Obama signed last week. But Democrats jabbed back.

"The same people who drove the economy into the ditch are now complaining about the size of the tow truck," said Rep. James McGovern, D-Mass., pointing out the large increase in deficits that President George W. Bush and GOP-controlled Congresses amassed.

It's not just the size, Mr. McGovern, but the condition and the drivers.

The Perfect Pancake?

Maths expert Dr Ruth Fairclough stepped up to the challenge, unveiling a complex algebra formula to help chefs nail the dish on the day.

The 34-year-old senior lecturer of mathematics and statistics worked out the food formula because her two daughters loved eating pancakes so much.

Dr Ruth, who teaches at Wolverhampton University found that
100 - [10L - 7F + C(k - C) + T(m - T)]/(S - E) created the tastiest snack.

In the complex formula L represents the number of lumps in the batter and C equals its consistency.

The letter F stands for the flipping score, k is the ideal consistency and T is the temperature of the pan.

Story here.  As someone commented on Fark:  "pancake recipe or GTFO."  Done!

It's a Stimulus, I Tell Ya

I don't remember seeing this mentioned in discussions of the "stimulus" bill. 

I CREDIT THE OBAMA TEAM FOR THIS ECONOMIC GOOD NEWS: Sales of Atlas Shrugged are, reportedly, soaring. “Sales of Ayn Rand’s ‘Atlas Shrugged’ have almost tripled over the first seven weeks of this year compared with sales for the same period in 2008. This continues a strong trend after bookstore sales reached an all-time annual high in 2008 of about 200,000 copies sold.”

I chalk it up to the multiplier.

Government: Making Health Care Unprofitable Since....

From my Tweets (Timothy Burke, to be exact):

Here is what Ceci Connolly is reporting at the Washington Post:

President intends to release a budget tomorrow that creates a 10-year, $634 billion "reserve fund" to partially pay for a vast expansion of the U.S. health system, an overhaul that many experts project will cost as much as $1 trillion over the next decade.

Obama would pay for the expansion by trimming tax breaks for the wealthy and tightening payments to insurers, hospitals and physicians, according to a senior administration official.

If this report is accurate, a $634 billion fund would pay for roughly half of what a fully comprehensive overhaul of the U.S. health care system would cost. It is also notable that some of the $634 billion is reported to come from cuts to what hospitals, physicians, and insurers presently get. We have been fully expecting a $157 billion cut to what Medicare HMOs get but it would seem the docs and hospitals would be in for some pretty big cuts as well to get to $634 billion in savings.

Full post here. 

The fact that patients are shielded from the true cost of health care - largely due to the tax-free status of health insurance contributions which, in turn, spreads the cost of health care around - is one of the reasons health care costs are high.  So the answer is, obviously, to take the profits* out of health care.  Perhaps Obama wants to turn the whole health care system into a market like the market for flu vaccines.

When government policies yield unintended consequences, the answer is always more government policy.  Sigh.

*I realize that most hospitals are technically not-for-profit.  But that only restricts what they can do with any income residual.  It does not mean that the hospitals can't have profits as a motive.

Minnesota Subsidizing Newspaper Internet Presence

From the AP

Two Minnesota newspapers will receive a share of state grants normally given to retrain workers in manufacturing and other industries in transition.

The Duluth News Tribune and the St. Paul Pioneer Press will work with the University of Minnesota's School of Journalism and Mass Communication to help staff adapt to an increasingly Internet-based industry.

Minnesota Job Skills Partnership is awarding $238,000 in state funds, while the newspapers and the university will contribute about $469,000 combined, mostly by devoting staff time to training.

You can argue that these skills are general skills and it wouldn't pay any private company to pay for the education necessary to get these skills.  But if so, why are the papers spending almost $470,000 to give their own staff skills that are widely marketable?  Couldn't these newspapers hire people with these skills with that $469,000?  Moreover, how is the state getting $238,000 worth of value from this subsidy?

HT to David Strom

Quick Note on Leo Lyons

The St. Louis Post Dispatch has an article on Leo Lyons that mentions something that I thought of each time I saw Leo with his head in the clouds during his first two years at Mizzou:  Mizzou wasn't his first choice.

How Homebrewing Became Legal in the US

Jimmy Carter played no small part.

For connoisseurs of Budweiser, the 1970s were a pale golden age. In every supermarket across the land, the King of Beers maintained its status as the grocery world’s most superfluous monarch, reigning over just a handful of domestic taste-alikes and one or two upstart imports. The American public had decided it liked its beer cheap, bland, and less filling, and the industry—which, after decades of consolidation, consisted of a mere 44 breweries in 1979—was happy to oblige. Consumers with a thirst for something tastier, or at least different, had few options. Things were so bad, in fact, that Coors, distributed in just 11 Western states, was considered such a rare delicacy in other parts of the country that bootlegged cases went for three times their retail price in New Jersey and Tennessee. Was it any wonder that the nation was feeling weak and watered down?

Then Jimmy Carter took pity on our wretched souls. In 1978 he signed Senate Amendment 3534, a portion of which gave each household permission to produce up to 200 gallons of tax-exempt beer each year.

Read the whole thing.

I wonder if he was inspired at all by this stuff.  HT to Fark.

Signed:  homebrewer since 1993