Send us a text

What is it that beach parking lots are actually selling? Why do beer bottles cost more than cans? And just what are costs of the thing, as opposed to the costs of selling or buying the thing? Can you really separate them out?

• Mass MOCA: "Wilco's Solid Sound" Music Festival https://massmoca.org/event/solid-sound-2024/
• "To Consumers, ALL Costs are Transaction Costs." AIER, by Michael Munger. https://www.aier.org/article/to-consumers-all-costs-are-transaction-costs/
• Yogi Berra "quotes" (mostly attributed, rather than actual). https://businesscoachingofpa.com/top-100-classic-yogi-berra-quotes/

Book o'da'week: Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age Kindle Edition Michael A. Hiltzik, 2009, Harper-Collins.  https://www.amazon.com/Dealers-Lightning-Xerox-PARC-Computer/dp/0887309895

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

You can throw shade, but can you own the idea of shade? Shibumi's sunshade has become an essential part of the coastal landscape, but that has sparked some fierce legal battles. We'll talk patents, beginning with the evolution of shade solutions from caveman ingenuity to Shibumi's wind-powered marvel. Plus, you'll get the inside scoop on the recent lawsuit where Shibumi defended its designs against Beach Shade LLC, demonstrating the high stakes of protecting intellectual property in today's competitive markets.

But the beach isn't the only place optimization matters. Ever wondered the optimal way to board a plane or fund your education? We dive into the secrets behind efficient airline boarding procedures and the real-world challenges that complicate them. Then, we shift to a heated debate on Income Share Agreements (ISAs) versus traditional student loans, exploring their unique benefits and drawbacks. Get ready to question everything you thought you knew about intellectual property as we discuss Boldrin and Levine's controversial views on innovation and competition. 

Links and Resources:

Shibumi:

• Description of Shibumi v. Beach Shade:  https://www.finnegan.com/en/insights/articles/southeast-litigation-update-december-2023.html
• Primary Shibumi Patent, Granted January 2019:  https://portal.unifiedpatents.com/patents/patent/US-10190330-B2
• List of Patents, From Shibumi Web Site:  https://shibumishade.com/pages/patents
• The Assembly--"Shibumi Has Taken Over NC Beaches" https://www.theassemblync.com/business/shibumi-shade-takes-over-north-carolina-beaches/

• ISA's:  https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2022-03-02/income-share-agreements-and-private-education-loan-requirements

• Michele Boldrin on IP, on Econtalk: https://www.econtalk.org/boldrin-on-intellectual-property/ 

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

Not everyone realizes that the modern financial system has enabled us to end historical practices such as indentured servitude and apprenticeship.  This episode uncovers how financial systems tackled market failures and transaction costs, drawing on insights from Jeffrey Hodgson's "The Wealth of a Nation: Institutional Foundations of English Capitalism." We'll explore the evolution of borrowing against future earnings and how modern financial institutions have streamlined processes that once resembled slavery, fostering the growth of capitalism.

We'll then shift gears to examine Glenn Lowry's groundbreaking views on educational investment, discussed in his book "Late Admissions" and echoed in his 1981 Econometrica paper. Lowry's exploration of intergenerational transfers and parental investments in education reveals significant inefficiencies in the current system, drawing parallels with Michael Hudson's analysis of financial markets. The conversation sheds light on the untapped potential of underprivileged children and the need for better financial instruments to optimize educational funding.

• Geoffrey Hodgson. The Wealth of a Nation: Institutional Foundations of English Capitalism. Princeton University Press.  https://press.princeton.edu/books/hardcover/9780691247014/the-wealth-of-a-nation 
• Glenn Loury, (1981). Intergenerational Transfers and the Distribution of Earnings. Econometrica, 49(4), 843–867. https://doi.org/10.2307/1912506
• What Causes Capitalism? STEPHEN DAVIES. REASON.   https://reason.com/?p=8285302
• Nick Gillespie Interviews Glenn Loury, REASON, https://reason.com/podcast/2024/06/12/glenn-loury-tales-of-sex-drugs-and-capitalism/

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

Bees and Valencia oranges from my family's farm in rural central Florida provide a snapshot of externalities and transaction costs. A local beekeeper wasn't just a boon for our crops but also an illustration of Arthur Pigou's theories on the divergence between supply price and marginal supply price. 

 Real-world practices, such as apple orchard owners paying for pollination services while beekeepers pay for the privilege of orange blossom honey, reveal how market dynamics naturally balance costs and benefits. 

• M.C. Munger. "The Lighthouse Myth." https://www.aier.org/article/the-lighthouse-myth/
• M.C. Munger. "Orange Blossom Special." https://www.econlib.org/library/Columns/y2008/Mungerbees.html
• J.E. Meade, 1952, "External Economies and Diseconomies in a Competitive Situation." https://www.jstor.org/stable/2227173
• Shawn Regan, "How Capitalism Saved the Bees", PERC. https://www.perc.org/2017/07/20/how-capitalism-saved-the-bees/
• SNS Cheung, "Fable of the Bees." https://www.pauldeng.com/pdf/stevencheung/fableofbees.pdf
• Bruce Frohnen and Ted McAllister, Character in the American Experience: An Unruly People.  https://rowman.com/ISBN/9781666914528/Character-in-the-American-Experience-An-Unruly-People

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

Two seemingly similar parking lots at Wrightsville Beach, North Carolina, couldn't be more different in the emergent behaviors they foster. From the orderly lines of the 85-space lot to the chaotic dynamics of the smaller 19-space circular lot, discover how price rationing, queue formation, and transaction costs play critical roles in these everyday systems.

Things take s a quirky turn with the arrival of a man in a pork pie fedora who disrupts these parking norms, buying spaces directly from beachgoers. This unconventional behavior prompts a deeper discussion on the breakdown of social rules and the challenges of maintaining order when outsiders intervene. 

• Wrightsville Beach Parking Information
• Locke and Property 
• Porkpie Fedoras, if you NEED one now!
• Elinor Ostrom and Property Norms
• To Consumers, ALL Costs are Transaction Costs (AIER)
• Economic Benefits of Beach Access Points
• (Parking) Life Is A Beach

Book o'da'week:  Jonathan Haidt, The Anxious Generation: How the Great Rewiring of Childhood is Causing an Epidemic of Mental Illness. 2024, Penguin Press. 

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

The method of much of social science is "comparative statics." There's an amazing natura experiment going on, after Hurricane Maria changed the environment for the rhesus macaques of Cayo Santiago. Sometimes, you need a simulation to understand something is only obvious after the fact. These primates, known for their fierce competition and rigid hierarchies, expanded their social networks and reduced aggression to endure the island's new, harsh environment.

Plus, a politically incorrect TWEJ, and an interesting letter. 

• NYT Cayo Santiago story
• A short piece on "anti-market atavisms" and Hayek's insights.
• Why you can't get a reservation at a restaurant...
• News story about "Monkey App"
• Book'o'da week: Peter Boettke, Erwin Dekker, and Chad Van Schoelandt, editors, Toward a Hayekian Theory of Social Change. https://rowman.com/ISBN/9781666937138/Toward-a-Hayekian-Theory-of-Social-Change

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

Why would a baseball stadium limit the number of $1 hot dogs per customer on Dollar Hot Dog Night? Find out as we work on this intriguing question posed by a curious high school student named HJ. Through the lens of transaction costs, we reveal how these promotional events are less about selling hot dogs and more about enhancing the overall (cheap!) game experience to attract new fans. Using a real-life example from a recent Mets game, we explore how such promotions can change the crowd dynamics, boost attendance, and ensure a positive atmosphere for everyone, even when things get a bit rowdy.

And the TWEJ:  A dad joke, because of course it is

Three apple pie prices (for one pie!)

• Andy Anand $70 
•  Publix $7.75 
•  Joe’s Stone Crab $130

Samuel Bagg's book The Dispersion of Power (Oxford)

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

I have been interested lately in a paper Bill Keech and I were working on a decade ago,

It was called "The Anatomy of Government Failure."

Was AC Pigou the first "Public Choice" theorist?

There are two transaction costs problems in the background:
1.  Information asymmetries and the problem of ignorance
2. Incentive problems and institutional design

Market failure is actually a thing. And it can be complicated: Kleinman and Teles, "Market and Non-Market Failures."

But so is government failure.  There is no reason to expect government action to be Pareto Optimal. 

The problem is that every flaw in consumers is worse in voters!

It could even be argued (I did!) that a "good" industrial policy is impossible in a democracy.

Book o'da week:  The Next American Economy: Nation, State, and Markets in an Uncertain World . 2022, Encounter Books.  by Samuel Gregg. 

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

What if crossing a mere corner of private land could land you in legal hot water? This episode tackles the thorny issue of corner crossing, where public and private lands meet at a single point, creating potential trespassing conflicts. We'll dissect Dave Schmitz's insights on the limits of property rights and the Roman law doctrine of ad coelum, which extends property rights from the heavens to the earth's core. Through landmark cases like Hinman v. Pacific Air Transport and Jacques v. Steenberg Homes, you'll gain a deeper understanding of how airspace and land use rights have evolved.

Links:

• Corner-crossing  https://www.casebriefs.com/blog/law/property/property-law-keyed-to-singer/trespass-and-public-rights-of-access-to-property/jacque-v-steenberg-homes-inc/ 
•  Corner-crossing update https://wyofile.com/ranch-owner-corner-crossing-would-erase-billions-in-private-property-value/
•  More on corner-crossing https://oilcity.news/crime/court/2024/05/14/who-are-the-judges-hearing-tuesdays-corner-crossing-appeal/#:~:text=The%20panel%20for%20the%2010th,property%20in%202020%20and%202021. 

• Hinman v. Pacific Air Transport https://casetext.com/case/hinman-v-pacific-air-transport 
• Jacques v. Steenberg Homes: https://www.wicourts.gov/sc/opinion/DisplayDocument.html?content=html&seqNo=17010 

Book:  Jeffrey Rosen, The Pursuit of Happiness: How Classical Writers on Virtue Inspired the Lives of the Founders and Defined America. Simon Schuster. 

https://www.simonandschuster.com/books/The-Pursuit-of-Happiness/Jeffrey-Rosen/9781668002476

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz

Send us a text

Can a single $100 bill solve an entire town's debt crisis? This riddle is a window into transaction costs. I rely on Jeffrey Rogers Hummel's insights, adding a few thoughts of my own. 

And a cool letter: Ever wondered why you haggle for a car but not for your morning Starbucks's coffee?  

Plus, a book recommendation: Nobel Prize-winning economist Edmund Phelps' "My Journeys in Economic Theory," a compelling read that blends economic insights with political theory.

Links:

• David Henderson gives a statement of "the riddle"
• J.R. Hummel's web site
• Similar story, from LvMI

Haggling:

Sebastian Schweighofer-Kodritsch, "The Bargaining Trap," Games and Economic Behavior, November 2022, v. 136, pp. 249-54.

Book recommendation:

• Edmund Phelps, My Journeys in Economic Theory.  Columbia University Press.  https://cup.columbia.edu/book/my-journeys-in-economic-theory/9780231207300 

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz