Why do bands allow scalpers? (Hint: Dynamic Efficiency)

Mankiw recently posted about ticket prices and scalpers, and this reminded me that a while ago I thought of a reason why performers might allow some people to make so much money in their stead. It works more for music groups and football teams, but is more relevant for theater performances. Say you are a music band who has just had a string of hits. You have two options: sell concert tickets for $60, in which case about half of them will go to lucky fans who have been following you since yours early days, and half will go to scalpers who will resell them for $500 to wall street traders that will use them to impress their dates. Or you can sell all of them for $400, and they will all go to wall street types. It seems a no brainer, but what happens if the next album flops? In the first case, the guys that followed the band from the garage days will still go to the concerts to hear the old songs, and maybe your next effort has a better reception. Even if you never have another hit,

What Genghis Khan, but Elizabeth Can't

One of my ongoing research projects is on the Mongol invasions. Doing some background research, I realized there's an interesting asymmetry between male and female rulers, in terms of available imperial sexual strategies. Say that the Mongol hordes have just finished annexing another city along their ever expanding frontier. Let's call it Elbonia . In this case the local elite had the good sense to surrender peacefully, and accept the Mongols as their rightful overlords. Everybody knew that if they put up a fight, the Mongols would typically exterminate a significant proportion of the local population, and enslave the rest. What did the Mongols want from Elbonia? Well first of all, obviously they didn't want the inhabitants to ever attack their other dominions, regardless of any preexisting local feuds which may have existed. Secondly, they wanted them to send them money or tradable goods regularly. And thirdly, they wanted them to furnish soldiers for use in their next

First LA impressions

I'd actually been in LA very shortly before, but this time I'm with Ana, and I always notice more stuff when I have someone to comment it with (especially her). I rented a car with Dollar from LAX. I show up at the place, they give me some paperwork and point me towards a row of compact cars. As I am walking towards them, I am trying to find the license plate in the paperwork and fail to do so. I ask which car I am supposed to take and the answer is: anyone I want from that particular section. This is genius. Every single time I rented a car in the past, they gave me the keys in the office and that was it. This way instead I can choose whichever model I want, from the class I paid for. In our case we wanted to have a large trunk, so we got a car that had one, but if we had preferred a more compact car, we could have had that too. Just to get around LA the GPS inevitably directs you to a bunch of roads that are famous from movies (often movie titles). Sunset Boulevard, Mulho

A consistent measurement system for photography

Everybody who starts with photography must eventually come to grapple with f/numbers, shutter settings, focal lengths and ISO values. The problem with the current system is that they are all on different measurement systems. Focal length and ISO are linear, shutter speeds are expressed as fractions, and apertures are proportional to the square root of the amount of light. The end result of these different scales is that the actual values are just about useless for any practical calculation a photographer might need to do. For example let's say that you are wondering what ISO you will need to photograph a stationary object lit by streetlights, using a 28mm f/2.8 on a full frame DSLR. Street lighting is usually around 15 lux, which is about LV 2. LV 0 is defined as the amount of light that requires 1 second exposure at f/1 and ISO 100, and LV 2 is two stops brighter than that. Let's see, f/2.8 is - f/1,  f/1.4, f/2, f/2.8... Three stops darker than f/1.  Three minus two is

Nikon AF-S NIKKOR 28-300mm f/3.5-5.6G ED VR Lens Review

I just upgraded from a D90 to a D750, and I decided to buy a superzoom to use when I don't want to carry around the full bag of primes. It was a tossup between the 24-120 and the 28-300 , but in the end I picked the latter since I already had a 24mm f/2.8D which had been collecting dust during my decade of using DX-sized sensors. In fact I might trade the 24mm with a 20mm if the opportunity comes along. Anyway, there's a lot of controversy surrounding this lens, so I thought I would make some tests to decide whether to keep the lens or not, and since I have them, I figured I'd post them online. So here they are. The first one are 200x200pixel crops (roughly) from the center of a resolution target. I took every marked focal length, and every full stop of aperture. I put a green dot next to the combinations that I considered satisfactory. For comparison, the "Optimal" square was obtained by taking a photo much larger version of the same pattern and scaling it

Was any other car company gaming emission standards?

As most of you already know, Volkswagen was recently caught cheating on emission tests. But were they really alone in doing so? The EPA data shows some suspicious patterns. Without getting too technical (in any case, the specifics are still unclear), there's a tradeoff between fuel efficiency, and NOx emissions. So for a given level of performance, the software that controls a modern diesel engine can be tuned so that it is more fuel efficient, but produces more NOx, or it can be tuned so that it is less fuel efficient, but produces less NOx. Since Volkswagen had problems meeting the NOx standards in the US, they decided to introduce software that detected when an emission test was being performed, and tuned the engine so as to decrease NOx production, in the process potentially worsening fuel economy relative to regular driving conditions. One possible outcome of this procedure is that the cars involved might actually have better fuel economy in real life conditions, tha

Why can't consumers buy fuel futures?

The average american family consumed about 4% to 6% of pre-tax income on gasoline, which probably means about 7% to 10% of after tax income. After you factor in mortgage payments, insurance copayments and other fixed expenses, I'm guessing that a lot of families give their local gas station about a fifth of their monthly cash in hand. Given that in the short run consumers are stuck with the car, workplace and home that they have, short run price elasticity of gasoline is famously low, or around -0.25 (for non-economists: that means a 10% increase in gas prices reduces consumption by only 2.5%). As the graph above shows, between 2002 and 2008, increases in the price of gasoline ate over  $1,500 from the budget of the average US family. Gasoline price volatility is thus a major source of risk to the finances of US families. It is therefore surprising that a prudent consumer in the US (or in any other country I'm aware of) has essentially no ability to protect himself from the