Fri, 29 December 2017
Robin Hanson returns to the podcast to discuss his new book, The Elephant in the Brain: Hidden Motives in Everyday Life, co-authored with Kevin Simler. As the subtitle suggests, the book looks at humans' hidden motives. Robin argues that these hidden motives are much more prevalent than our conscious minds assume. We are not conscious of the vast majority of the functions of our brains. This extends beyond the most basic things our brains do (such as commanding our hearts to beat every second or so) to many things we think of as higher-level cognitive tasks. Hanson and Simler argue that, if the brain were a corporation, the conscious mind wouldn't be the CEO but the press secretary. Most of the reasons our conscious brains give for our actions are actually ex-post rationalizations for decisions that have been made unconsciously and for reasons that aren't immediately obvious to us. As a press secretary, the conscious mind is better off not knowing if we are doing things for selfish reasons since that would make it more difficult to justify our actions to others. Some very compelling evidence for this thesis comes from studies of people with split brains. People with severe epilepsy have sometimes been treated by severing the connections between the two halves of their brains. Researchers noticed that when one side of the brain was fed information that led to a particular action (e.g. an instruction from the researcher to "stand up") the other side would construct a reason for the action (e.g. "I was thirsty and I got up to get a drink"). If the brain were truthfully answering these questions, it would say "I don't know." However, the split-brain patients confidently gave false answers apparently without realizing they were false. Hanson argues that neurotypical minds are doing the same thing: constructing justifications for our actions even if we aren't really aware of our true underlying motives. From the book's online description, "The aim of this book is to confront our hidden motives directly---to track down the darker, unexamined corners of our psyches and blast them with floodlights. Then, once our minds are more clearly visible, we can work to better understand human nature: Why do people laugh? Why are artists sexy? Why do we brag about travel? Why do we prefer to speak rather than listen?" We discuss this theory of the brain and how it applies to many areas of everyday life from medicine to body language. The Amazon links on this page are affiliate links. If this podcast convinced you to buy a copy of The Elephant in the Brain, doing so through one of these links will provide revenue to the podcast at no additional cost to yourself.
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Fri, 22 December 2017
My guest for this episode is Ennio Piano of George Mason University. Our topic is Ennio's work on the economics of biker gangs. Ennio has two papers on this subject. The first, published in Public Choice, is entitled Free riders: the economics and organization of outlaw motorcycle gangs and it describes the franchise-style model of the Hell's Angels motorcycle gang, and how that model contributed to that gang's rise to prominence. By making the local chapters of the Hell's Angels residual claimants, while the head chapter in Oakland is responsible for the gang's name and reputation, the gang exploits local knowledge while also coordinating activities internationally. The second paper, Outlaw and economics: Biker gangs and club goods describes how the norms and rituals of biker gangs fit with the theory of club goods. Costly, unreliable motorcycles and even Nazi tattoos can be explained through this theory: they are credible commitments to remain loyal to the club. This behaviour is similar in purpose to rituals practice by many religious sects. We discuss the history of biker gangs and the gang wars of the 1990s. Finally, Ennio describes the relationship between biker gangs and other criminal organizations such as the Mafia and Mexican drug cartels. |
Fri, 15 December 2017
My guest today is Jake Meyer of California State University, Long Beach. We discuss Jake's work on the intersection of financial crises and politics. Jake's work explores important questions such as the interaction between interest group politics and financial and currency crises. A country's monetary authority needs to manage both the domestic labour market and the country's exchange rate, but particular interest groups tend to favour one over the other very strongly. If one of these interest groups becomes disproportionately influential in national politics, they can affect monetary policy in ways that lead to crises. For instance, if a group that cares about the domestic economy and not the exchange rate takes power, they can push the monetary authority into causing an exchange rate crisis. If a group that cares exclusively about the exchange rate takes power, they can push the monetary authority to ignore the domestic economy to the point that it causes a banking crisis. Jake's work also looks at the way countries learn in the wake of financial crises. He looks at the change in the growth rate of credit before and after a crisis, and he finds that things like the number of veto players and the independence of the central bank impact this change. Check out Jake's Quora account, where he answers many questions related to economics. |
Fri, 8 December 2017
Today's guest is Kyle Coates and our topic is pro wrestling and the intellectual property problems that arise from it. So prepare to be amazed as we BODY SLAM this topic, or something. Who owns a wrestler's name, gimmick, and persona? Kyle was inspired to do research in this area when he heard about a legal dispute between the wrestlers Jeff and Matt Hardy and the wrestling network TNA. The Hardys changed networks and wanted to continue using a gimmick they had developed while performing for TNA. We discuss some of the lawsuits and disputes that have occurred in the pro wrestling sphere, and how to courts have treated these issues. And yes, we answer the most important question: If Dwayne "The Rock" Johnson runs for President, will he be able to use Rock puns in his campaign ads? Listen to the episode to learn the answer!
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Fri, 1 December 2017
Today's guest is David Friedman of Santa Clara University. Our discussion centers around his upcoming book, Legal Systems Very Different From Ours, which you can read in draft form at his website. David became interested in this topic when he became interested in the decentralized legal system of saga-period Iceland. This interest has since expanded into a full book covering everything from Imperial Chinese Law to the customary legal system of Somaliland in northern Somalia. We discuss some of these chapters, with a focus on Somalian, Jewish, Icelandic, and 18th-century British law. We also discuss some of the major themes of the book, such as feud law and embedded or polylegal systems. Related links: I. M. Lewis' book on the modern history of Somalia The Invisible Hook by Peter Leeson (He contributed a chapter on pirate law to Legal Systems Very Different From Ours). He was also a recent guest of this show. |
Fri, 24 November 2017
My guest today is Frank Milne of Queen's University. Our topic for today will be unintended consequences. Frank has written a paper directed at policymakers to help them understand some of the pitfalls that economists have identified. The paper is directed at Australian policymakers, so some of the examples are Australia specific, though they generalize quite well to other countries. We start where the paper starts, with a discussion of Australia's heavy investment in commodity exports to China in the wake of the 2008 crisis. Many people mistook the temporary increase in demand for Australian mineral exports for a permanent change, leading them to over-invest in developing the Australian mining industry. We go on to discuss many topics, with a particular focus on housing. We also touch on Frank's work on Systemically Important Real Sectors (SIRS), which he is working on with co-author John F. Crean. SIRS are sectors with the potential to cause systemic problems in the banking sector. They feature high volatility of costs and revenues, which create the potential for large losses to lenders. Related links: The Diamond-Dybvig model (Wikipedia) and the original paper. The Arrow-Debreu model (Wikipedia). House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again by Mian and Sufi. |
Fri, 17 November 2017
Today's guest is Clifford Winston of the Brookings Institution. We discuss infrastructure, particularly roads and airports, and the incentives faced by their users. Bad incentives create congestion problems that can't be solved by simply throwing more money into infrastructure; you need to fix the incentives! Clifford's work on privatization shows how it could improve incentives and reduce the costs of congestion. Clifford argues that self-driving cars will fix some of the problems created by bad policy. We also discuss the letter grades issued for infrastructure by the American Society of Civil Engineers and what they do and don't tell us about the quality of American infrastructure.
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Fri, 10 November 2017
Peter Leeson of George Mason University joins the podcast today to discuss his latest book, WTF?!: An Economic Tour of the Weird. We discuss the economic reasoning behind some of history's strangest practices: ordeals that were used to determine innocence or guilt in medieval Europe, trials by battle that were used to settle land disputes in Norman England, wife auctions that happened during the Industrial Revolution, and the criminal prosecution of insects and rodents by ecclesiastical courts in Renaissance Italy. Also check out Peter's previous book, The Invisible Hook, about the economics of pirates. You won't regret it!
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Fri, 3 November 2017
My guest today is Jared Rubin of Chapman University. He is the author of Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not, which is our topic for today. The book deals with the question of why Western Europe became wealthier than the Middle East after centuries of being poorer. The book is part game theoretic model of society, part historical narrative through the lens of that model. The model considers two main factors: the state's power to coerce and its need for political legitimacy granted by elites. Importantly, different groups have been the ones to grant legitimacy to the state in different times and places. In the Muslim world, religious leaders primarily played this role, as they did in Europe prior to the Reformation. After the Reformation, however, the power of the Catholic Church was much diminished in many parts of Europe. Rulers in places like England and the Dutch Republic turned to economic elites to grant them legitimacy. This gave the merchant and capitalist classes a seat at the bargaining table, setting the stage for the Industrial Revolution.
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Fri, 27 October 2017
My guest today is Kevin Leyton-Brown, he is a Professor of Computer Science at the University of British Columbia. Kevin's work involves not only computer science topics such as artificial intelligence, but also game theory, and the intersection between the two. Our topic for today is an app that Kevin co-founded called Kudu, which uses double auctions to help Ugandan farmers trade more effectively. Kevin was interested in using his skills to help people in the developing world, so during a sabbatical seven years ago, he resolved to go to a country in sub-Saharan Africa to do just that. He settled on Uganda and, after living there for a time, noticed something peculiar about the market for agricultural goods there. In the city, you would sometimes find vendors selling goods at very high prices, and even running out. Meanwhile, in the countryside, vendors would have so much stock they would be selling at extremely low prices, even rotting before they could be sold. Kevin, along with his partners John Quinn and Richard Ssekibuule, set out to help the locals seize these apparent arbitrage opportunities by constructing a platform to allow buyers and sellers in these markets to trade with one another at competitive prices. Most Ugandans have cell phones. Not fancy smartphones (as I wrongly guessed) but basic flip phones. So Kevin and his partners decided to set up a platform by which people could make bids and asks using a basic text-message system, and that system turned into Kudu. The platform has facilitated $1.5 million USD worth of confirmed trades, and it has made the prices of agricultural goods much more transparent for everyone trading in these markets. Related links: Vickrey–Clarke–Groves mechanism
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