Marginal Revolution

John Edwards on Trial

Very good article in the NYTimes on the larger implications of John Edwards's career as a trial attorney. In Edwards's first big case he artfully channeled the words of an unborn baby girl to convince the jurors that an obstetrician's decision not to perform a Caesarean section resulted in the girl being born with cerebral palsy. The smoking gun in the case, according to Edwards, was the record from the fetal hearbeart monitor. As a result of this and other similar cases doctors "have responded by changing the way they deliver babies, often seeing a relatively minor anomaly on a fetal heart monitor as justification for an immediate Caesarean."

[But] studies have found that the electronic fetal monitors now widely used during delivery often incorrectly signal fetal distress, prompting many needless Caesarean deliveries, which carry the risks of major surgery...[Moreover] the vast majority of children who developed cerebral palsy were damaged long before labor...[and] a series of randomized trials challenged the notion that faster delivery could prevent cerebral palsy. Reviewing data from nine countries, two researchers reported last year that the rate of the disorder had remained stable despite a fivefold increase in Caesarean deliveries.

Edwards can't be blamed for being a good attorney, even if the science rejects his claims, but his front of caring for the victims does not stand scrutiny. Edwards, along with his fellow attorneys in the North Carolina plaintiff's bar, argued against a compensation plan that would insure everyone with a child born with cerebral palsy.

My take: A tort system should deter and insure. But our tort system does neither well, especially when it comes to product liability and medical malpractice cases. Winning claims often have little connection with true negligence so the system does not deter and instead of insurance the tort system offers those with injuries a lottery ticket, handing large payouts to some and nothing to others with equal difficulties. To top it off, the system is expensive as more dollars are spent on litigation than flow to plaintiffs.

The Economics of Orgasm

I've been an economist for so long that I don't flinch when the paper abstract starts as follows:

"This paper models love-making as a signaling game. In the act of love-making, man and woman send each other possibly deceptive signals about their true state of ecstasy. Each has a prior belief about the other's state of ecstasy. These prior beliefs are associated with the other's sexual response capacity..."

Or if that is not enough for you: "In this paper, love is formally defined as a mixture of altruism and possessiveness. Love is shown to alter the man and the woman's payoff functions in a way that increases the equilibrium probability of faking, but more so for the woman than for the man."

Here is the full paper. I could go on with quotations, but why don't we look at the empirical results, drawn from an extensive data set and questionnaire:

1. 72 percent of women admit to having faked it in their current or most recent relationship, for men the number is 26 percent.

2. You are more likely to fake an orgasm if you are in love. "It was the men I deceived the most that I loved the most," said Marguerite Duras.

3. Being in love and faking are less positively correlated for men than for women. Perhaps men want to look like studs, regardless of the seriousness of the relationship.

4. Women mind less if their partners fake orgasm. (Might some be positively relieved to have it over?)

5. Faking is correlated with age, but in complicated ways. It depends on whether you love your partner, whether you are a man or woman, and how old you are.

6. The more education you have, the more likely you are to fake orgasm. I found this to be the most interesting result.

The author, Hugo Mialon, is on the job market right now and he has a forthcoming co-authored AER piece, plus a revise-and-resubmit at the Rand Journal. His dissertation is "Five Essays on the Economics of Law and Language."

OK, the orgasm stuff is not his most marketable side, but Hugo seems to be a guy with both ideas and good technical skills. Hire this man. If we had a slot at GMU I would be pushing for him, even though he probably fakes his orgasms.

Thanks to Newmark's Door for the initial pointer to the paper.

How to improve meetings

I have heard of or experienced the following ideas for improving the running of meetings:

1. Make everyone stand up until the meeting is over.

2. Make everyone talk on the phone, even if you are in adjacent offices.

3. Give everyone a chess clock to limit the number of minutes they are allowed to speak for (this is a variant of an idea from Robin Hanson. Read here for some commentary.

4. Lock the door when the meeting starts on time and do not allow latecomers to enter.

Or how about this idea, channeled through Randall Parker:

Aided by tiny sensors and transmitters called a PAL (Personal Assistance Link) your machine (with your permission) will become an anthroscope - an investigator of your up-to-the-moment vital signs, says Sandia project manager Peter Merkle. It will monitor your perspiration and heartbeat, read your facial expressions and head motions, analyze your voice tones, and correlate these to keep you informed with a running account of how you are feeling - something you may be ignoring - instead of waiting passively for your factual questions. It also will transmit this information to others in your group so that everyone can work together more effectively.

So perhaps a bunch of buzzers go off when somebody says something confusing. Or the boss knows when no one is paying attention.

I'm all for voluntary experimentation, but let's not forget what many meetings are about. Meetings are not always about the efficient exchange of information, or discovering a new idea. Meetings can be about displays of power, signaling that a coalition is in place, wearing down an opponent, staging "theater" to make someone feel better, giving key players the feeling of being insiders, transmitting information about status, or simply marking time until something better happens. It's one thing to hate meetings. But before you can improve them, make sure you know what meetings are all about.

"No War" for Oil

A recently discovered bribe list indicates that Iraq gave some prominent world leaders and parties who opposed the war large "oil contracts" (easily convertible into cash). Here is an english translation of the orginal story including the list. ABC news also has the story.

P.S. I was against the war and didn't get a thing. Bummer.

35 heroes of freedom

From Reason magazine.

Let's not forget Evan Williams:

With a little luck and a lot of technology, Williams did as much as anyone in history to provide the once-scarce freedom of the press to millions of individuals, through his co-founding of Pyra Labs, which introduced easy-to-use Blogger technology and free-as-air Blogspot hosting to the masses.

Here is some critical commentary on the list. Thanks to politicaltheory.info for the pointer.

Signalling spam

I received an email message this morning with the not very promising heading "Not a scam". The contents? Here goes:

Face it, you're not getting paid enough for what you do

http://www.silverstate.co.sy@click.net-click.net.ph/click.php?id=sicosyl

to get off our database follow this link
jdefdmu s vgkitbaqizknh bdqdwxpoav w brfpu gotwzykprljsywaonqk

From Nigeria I received the following:

I KNOW YOU MIGHT HAVE RECEIVED DIFFERENT PROPOSALS OF SUCH ASSISTANCE BUT I HAVE ALL INFORMATIONS WITH WHICH YOU CAN MAKE VERIFICATIONS.BESIDES EVEN THOUGH THE INTERNET IS FLOODED WITH SCAM I STILL CANNOT AFFORD TO LOOSE THIS OPPURTUNITY OF A LIFE TIME.

If I were a spammer I might try "Not sure whether this is worth your time."

The answer to bad technology is often good technology

A genetically engineered plant that detects landmines in soil by changing colour could prevent thousands of deaths and injuries by signalling where explosives are concealed.

The plant, a modified version of thale cress (Arabidopsis thaliana), is sensitive to nitrogen dioxide gas, which is released by underground landmines. The leaves of the plant change from green to red after three to five weeks of growth in the presence of this gas. "They are easy to spot," says Carsten Meier of the University of Copenhagen, Denmark, who served as scientific adviser to Aresa, the Danish company that developed the plant.

Here is the full story. Note that the technology is not yet fully proven.

On a separate note, it appears that simply putting a tea strainer (mesh cylinder) in your neck could stop a large number of strokes.

The benefits of outsourcing

Virginia Postrel has been blogging up a storm on outsourcing, click here for a sterling post. In addition Her latest NYT column offers an excellent historical tale of outsourcing:

In the late 1980's, Asian manufacturers began turning out basic memory chips, undercutting American chip makers' prices and inciting a fierce policy debate. Many industry leaders argued that the United States would lose its technological edge unless the government intervened to protect chip makers.

In a famous 1988 Harvard Business Review article, Charles Ferguson, then a postdoctoral associate at the Center for Technology Policy and Industrial Development at M.I.T., summed up the conventional wisdom: "Most experts believe that without deep changes in both industry behavior and government policy, U.S. microelectronics will be reduced to permanent, decisive inferiority within 10 years."

He denounced the "fragmented, chronically entrepreneurial industry" of Silicon Valley, which was losing market share to government-aided Asian businesses. "Only economists moved by the invisible hand," he wrote, "have failed to apprehend the problem."

Those optimistic economists were right. The dire predictions were wrong. American semiconductor makers shifted to higher-value microprocessors. Computer companies bought commodity memory chips and other components, from keyboards to disk drives, abroad. Businesses and consumers enjoyed cheaper and cheaper prices.

Far from an economic disaster, the result was a productivity boom. As global manufacturing helped to reduce the price of information technology sharply, all sorts of businesses, from banks to retailers, found new, more productive ways to use the technology.

"Globalized production and international trade made I.T. hardware some 10 to 30 percent less expensive than it otherwise would have been," Dr. Mann estimates in an institute policy brief. (Her paper, "Globalization of I.T. Services and White-Collar Jobs: The Next Wave of Productivity Growth," can be downloaded at iie.com.)

As a result, she estimates, gross domestic product grew about 0.3 percentage point a year faster than it would have otherwise, adding up to $230 billion over the seven years from 1995 to 2002. "That's real money," she said in an interview.

By building the components for new integrated software systems inexpensively, offshore programmers could make information technology affordable to business sectors that haven't yet joined the productivity boom: small and medium-size businesses, health care and construction.

I link to Doug Irwin's excellent outsourcing piece at The Volokh Conspiracy. Daniel Drezner covers the debate in his usual quality fashion. Arnold Kling offers good comments as well. Here's hoping that this swell of intellectual support for free trade continues. Here is a more ambivalent Glenn Reynolds.

Classic arbitrage

A whole group of people trolls ebay looking for items that are "misplaced" because their descriptions are spelled incorrectly. If you list your "Haitian" painting as a "Hatian" painting no one will find it with a key word search. In essence this means that no one will find it at all, except of course for these noble entrepreneurs, these enforcers of spelling correctness.

Here is some information about our nation's literacy or lack thereof:

David Scroggins...searches for misspellings...He has bought Hubbell electrical cords for a 10th of their usual cost by searching for Hubell and Hubbel. And he now operates his entire business by laptop computers, having bought three Compaqs for a pittance simply by asking for Compacts instead.

No one knows how much misspelling is out there in eBay land, where more than $23 billion worth of goods was sold last year. The company does flag common misspellings, but wrong spellings can also turn up similar misspellings, so that buyers and sellers frequently read past the Web site's slightly bashful line asking, by any chance, "Did you mean . . . chandelier?"

One unofficial survey — an hour's search for creative spellings — turned up dozens of items, including bycicles, telefones, dimonds, mother of perl, cuttlery, bedroom suits and loads of antiks.

Contacted, the sellers were often surprised to hear that they had misspelled their wares.

Ms. Marshall, who lives in Dallas, said she knew she was on shaky ground when she set out to spell chandelier. But instead of flipping through a dictionary, she did an Internet search for chandaleer and came up with 85 or so listings.

She never guessed, she said, that results like that meant she was groping in the spelling wilderness. Chandelier, spelled right, turns up 715,000 times.

Well, at least these people are paying a price for their egregious mistakes. Here is the full story. Thanks to Lucas Wiman for the pointer.

Iraqi oil industry to remain socialized

The U.S. is no longer pushing privatization of the Iraqi oil industry primarily because the Iraqi's presently in control don't want it privatized for "nationalistic" reasons. This is bad news for the Iraqi people. Even putting aside bold plans for returning the oil to the people it's an important check on government that they must tax to spend. It's hard enough to make the State respect the rights of the people even when it relies on them for its funding but when the people rely on the State for their funding its even worse. Call this the "no representation without taxation" principle.