Odd Applications of Economics

Technology, Economics, and What We Watch

Television is largely paid for by advertising. Many consumers have equipment that lets them record a program when it is broadcast and listen to it later, fast forwarding over the ads. The smaller the number of people who watch the ads, the less advertisers will be willing to pay broadcasters to run them.

Consider, however, a broadcast of a football game. Part of what the viewer is paying for is the excitement of seeing which team wins and how. That does not work as well if he knows, or at least knows that he can know, the final score before he watches the game. So some, probably many, football fans should have a strong preference for watching the game as it is played.

If they are watching it in real time they don't get to fast forward over the ads. It follows that advertisements will get more viewers in that context, hence that advertisers should¹ be willing to pay more for a minute of time in a football game, or anything else that television watchers prefer to watch live rather than recorded. The invention of the Tivo and similar devices can be expected to lead to a shift of resources away from made for TV movies and towards broadcasts of sporting events.

The same change should lead to an increased effort to make ads entertaining and an increase in embedded advertising. It should lead to an increased effort to make television drama more like football games, to create soap operas where the viewer is waiting on the edge of his seat to see whether she does or doesn't date/marry/divorce/sleep with him and wants to see it happen before hearing about it from another viewer.

This is one example of indirect ways in which technological change changes the world we live in. Another is the effect of easy copying of digital intellectual property on what sorts of IP get produced. A recorded movie is fully revealed in one viewing so there is no adequate way of technologically protecting it; however good the encryption, the customer has physical possession of the machine it is playing on and can record it as it is played. The same applies to any form of IP fully revealed in one use, such as a song or a novel. It does not apply to a database such as Lexis, since what the user gets is not a copy of the database but the answer to a particular query. Nor does it apply to an online game. What the user wants is not a video of my adventure in World of Warcraft but an opportunity to have his own. It is sometimes possible, if not legal, to get at the underlying software and set up a pirate server, but it is a lot harder than recording a movie.

Hence we would expect improvements in the technology for making and distributing copies — higher capacity storage, the increased availability of high bandwidth connections to the Internet — to result in a shift of artistic effort out of movies and into online games.

Sex, Pleasure, Circumcision and Economics

One argument offered in favor of circumcision is the claim that it reduces the risk of getting AIDS. One argument against is that it reduces sensitivity and so pleasure in intercourse. I have no idea how good the evidence is, but there is a problem with the step in the argument from less sensitivity to less pleasure. Duration of intercourse is limited by male endurance; one can plausibly model the process as a rising intensity of pleasure up to the point of orgasm, with total utility equal to the area under the curve. If so, greater sensitivity means that you reach the same maximum sooner, reducing the area under the pleasure curve.

And that's without even considering the utility of the other participant in the process.

From a Webcomic

Macro and Micro Predators, Territorial Behavior and the Tragedy of the Commons

There are no large organisms that support themselves primarily by preying on humans; so far as I know, there have been none for several thousand years. There are lots of microscopic organisms that do so. There are large organisms that support themselves by preying on other species — we call them predators — but they make up a much smaller fraction of all large organisms than the corresponding ratio for microorganisms. Why the difference?

One possible answer is that macro predators face a tragedy of the commons: The deer I don't eat today will not be around and fatter next season because someone else will have eaten it. Micro-predators, on the other hand, have an "incentive" to preserve their food supply, both because the bacteria or viruses on me are all close kin to each other and so face evolutionary pressure to act in their common interest and because I am much longer lived than they are, so that many generations of them are dependent on a single me. A lethal disease is a mistake; from an evolutionary standpoint, diseases want to live off me while doing as little damage as possible.

When I made this point to my wife, she pointed out that some macro-predators solve the problem the same way humans do — via property rights. Their version is territorial behavior. If a single tiger succeeds in monopolizing his chunk of jungle it is in his interest to let the fawn grow up today to be a better meal next year.

Which leads to an interesting conjecture. Territorial behavior solves the tragedy of the commons only if the prey species is not too mobile, so that the fawn spared today is likely, as an adult deer, to still be within the range of the tiger that spared it. It would be interesting to know whether there is an inverse relation between the probability that a predator species is territorial and the mobility of its prey.

One other advantage of micro-predators was pointed out by a commenter on my blog — because they have short generations they evolve fast, so are able to adapt to our defenses much faster than macro-predators.

Talk Show Hosts

I sometimes use my car's satellite radio to listen to political talk shows. The experience is not encouraging. Most of the content, left and right, amounts to "our side is wise and virtuous, hooray, their side is stupid and evil, boo."

Many years ago, when I was the guest on a show whose host I knew, I was struck by how much less pleasant a person he was on the air than off. I concluded that he was doing the job he had been hired to do. Being nice is less dramatic than being nasty. Treating people you disagree with honestly and sympathetically, conceding the parts of their argument that are correct while disputing the parts that are not, is less effective theater than telling them what idiots they are, especially if most of your listeners are already on your side.

The situation may not be entirely hopeless; there have been a few shows I have enjoyed. On the right, there used to be G. Gordon Liddy. The political content was not terribly interesting but he came across as the sort of odd, quirky, interesting guy it would be fun to sit around talking with. On the left, I used to enjoy the Young Turks, a talk show that has now abandoned radio for TV and the internet. They did not take themselves too seriously, their ads were funny, they not uncommonly said positive things about people on the other side and they mentioned arguments against the positions they support.

Unfortunately, judging by viewing a few of their YouTube videos, they have now learned their lesson and reformed.

Are there other current hosts who are better? I have not found any. I did, however, find Tarzana Joe, who provides entertaining comments on the current news — in verse.

The situation is a little better online, with blogs and web forums, but not much better. Slate Star Codex, where the host was not only intelligent and original but strikingly fair minded and the commentariat ranged from communist to anarcho-capitalist with generally civil conversation, was an impressive exception to the norm; I spent a lot of time on it. It no longer exists; neither of the two sequels, one a Substack run by Scott Alexander, the host of SSC, and one a web forum largely populated by people who used to post on SSC, is as good, although both are worth reading.²

Talk Radio Ads

When I get fed up with a right wing talk show I switch to a left wing show, when I get fed up with that I switch back or give up. One thing I notice is the sort of ad. While some are probably for worthwhile products, a lot are get-rich-quick schemes, instructions on how to get credit by incorporating in Nevada and the like.

What is interesting is that, so far as I can tell, the same ads run on left wing and right wing shows. That suggests that many of the people who listen to such shows, left and right, have something in common.

Perhaps credulity.

---

Past posts, sorted by topic

A search bar for past posts and much of my other writing

1. In the interest of honesty I must confess that I have been unable to find evidence that advertisers pay more per viewer for football games. But they should.

2. Astro Code Ten, hosted by Scott Alexander, and Data Secrets Lox, which my wife describes as the exiles forum, it having been created after SSC shut down and before Scott started ACX. SSC no longer exists but the archive of past posts and commentary is still available and well worth reading.