But I also disagree: why is it necessarily disagreeable for Viacom to be able to raise their rates arbitrarily?
The problem would be if Viacom had decided to raise their rates for one cable TV provider and not others (providing service in the same geographic area). For example, if Viacom decides to play nice with the local cable TV company (Time Warner, Cox, etc) but not the Echostar (Dish)... then I would find the rate increase very troublesome for its anti-competitive implications. This is why some of us are concerned about cross-ownership and media integration (i.e. content providers owned by same company as content distributors)
However, if Viacom decides to raise their rates unilaterally for all cable TV providers in that market, what is the problem? This is the same as any other product. The cost that the firm must face for raising its price is reduced sales. Arbitrary price increases are a problem only if you have no choice but to buy the product (e.g. diabetic and insulin)
Viacom has the right to raise its rate. Similarly, Echostar (Dish) has the right to refuse to carry the Viacom programming on basic service. And, similarly, consumers have the right to refuse to subscribe to cable TV at the higher retail rates.
Why don't EMI sign the guy, or at least come to some kind of arrangement to get commission from the sales? From the reviews (and prices on eBay) the albums been getting they could certainly make a good profit.
In the same spirit, Danger Mouse could have approached EMI after he created the remix but before he released it to the general public.
Granted, I think this is yet another example of the knee-jerk reaction created by our "modern" litigous society. But given that there are copyrights (I, like many, believe that copyright on 'artistic work' is counterproductive), it's not necessarily fair for Danger Mouse to negotiate with EMI after he released his music to the public.
Let me make the point obvious: suppose some unscrupulous advertiser decided he wanted the Beatles 'Let it Be' used for his commercial. He releases the commercial before getting permission and gets rave reviews/consumer reaction. Even though the band/EMI may not have wanted the song used to promote that particular product (say a political ad), they are in a bind: they can no longer prevent the action, only haggle over the appropriate 'payment.'
That said, EMI should go after the people who explicitly profit-ed from the "sale" of the remix. If all Danger Mouse did was release the music to the public (presumably for free), then he should be afforded the same protection as garage "cover" bands performing at the local bar (for free) and student artists practicing by recreating past masterpieces.
[ Yes, I know, Beatles songs get used for commercials all the time even though the living Beatles members hate the practice... that's what you get for letting Michael Jackson outbid you for the catalog... given Micahel's legal and financial woes... maybe Paul can buy it back? ]
Currently in both academic and policy discussions, there is some debate as to whether it is better to put the "burden of proof" for patents in the application process or the infringement/interference litigation process.
The current U.S. system is arguably set toward "easier" application and "harder" enforcement - with the idea being that a court room has more flexibility and resources to tackle difficult intellectual property rights issues than the patent office. Moreover, this type of system avoids a bias against inventors: a more "front-loaded" system that applies burden at the application process would delay the patent and perhaps even shorten the patent life significantly (similar to the argument pharmaceuticals make regarding how rigorous FDA testing effectively halves the patent life of new drugs)
So it's nice to see cases like Machine Vision. Of course, for every successful court ruling against a harmful/irrational patent, there are several more that survive the litigation process... hence the ongoing debate...
As many wine enthusiast already know, most of the appreciation of a wine/champagne comes from its aroma/smell rather than its "taste" per se.
Biologically speaking, although our sense of smell pales in comparison to many other mammals, our olfactory capability (in our nose) is still superior to our "tasting" capability (taste buds on our tongue).
This is the main reason why some wine drinkers swirl/gurgle their wine in their mouth when tasting. The swirl/gurgle allows the aroma to develop in the mouth cavity (leading eventually to our nose). So, yes, there is a "scientific" rationale for that otherwise boorish behavior...
While I think the original post makes a good point, it should be noted that other traditionally "scientific" studies also use fairly arbitrary measures.
Take the case of (new) drug-testing: the statistical tests used are often arbitrary, both in the chosen significance level and the statistic itself. The former is well discussed (why is 5% or 1% necessarily the proper cut-off point for rejecting a null hypothesis) but the latter receives much less attention. Many of these statistics have known distributional properties only under assumptions that are either unverfiable or, worse, not bothered to be verfied by the researcher. I have seen statistics conducted on results from experiments where the underlying phenomena can only take positive values yet the researcher assumes it is governed by a Normal distribution (whose support is the entire real line)
Lastly, I think the researchers on the top 2004 recordings should be commended for following the spirit of science. They clearly explain their objective, the data they used, and their chosen method of analysis. Their work can be replicated from what they publish on their website. This is something that cannot be said of many experiments conducted in the finest university/industry labs by Ph.D. researchers! Truly in the spirit of scientific discovery, if one has problems with their "arbitrary choice"... all the tools are there to adopt different choices and see how the results change.
[ That said, I wish the researchers had spent a bit more time explaining the motivation underlying some of their "arbitrary" choices. ]
Most ideas exist in the world before they are formalized by theorists. Certainly -- as the legend goes -- apples were falling from trees before Newton "discovered" gravity. But this does not make Newton's contribution (nor von Neumann's) trivial.
If you read carefully, you will realize that my comment was referring to the fact that von Neumann helped formalize the study of zero sum games (e.g. chess). Although his work was not definitive or comprehensive, von Neumann's contribution did lay out the path for future, formal studies of games. As you allude, many games are non-zero sum. In fact, the study of non-zero sum games was the primary pursuit of many of the later game theorists, such as Nash. The famed Nash equilibrium is a equilibrium concept that applies to non-zero sum games.
Lastly, note that the idea of zero sum game in the Spanish conquest sense is still prevalent in some parts today: consider our obsession with oil (well, some countries more than others...). Furthermore, most systems of intellectual property rights create incentives ("winner-takes-all") akin to those in zero-sum games.
Along with modern computer science, Von Neumnann also made contributions in several other areas of applied mathematics that are currently major areas of research and development.
For example -- although Nash got the book and movie treatment as well as the Nobel -- the pioneering work on the modern mathematical treatment of games ("game theory") is considered to be "Theory of Games and Economic Behavior" (1944) written by Von Neumann and economist Oscar Morgenstern. Among their contribution include the concept of a zero sum game and the "minimax theorem."
Much closer to computer science... von Neumann, along with Dantzig and Kanotorovich, helped develop the field of linear/mathematical programming and, more generally, operations research.
Of course, all three of these fields are related, with many of the same basic tools applicable to all three. But the fact that one man found so many seemingly different applications for the same basic matheamtical tools is still amazing. Regardless of whether Von Neumann was the father of modern computer science (personally, I lean toward Turing), I think we should follow the spirit of the original post and remember the birth of one of 20th Century's trule great thinkers.
Given the difficulty the US is having of not only enforcing but also legally maintaining the "Do-Not-Call" Phone Registry federal initiative, I have doubts that the US would ever be able to implement an effective anti-spam law
While spammers don't have the political clout of telemarketers, it is easier to enforce laws aimed at telemarketing than spam as the major customers of telemarketers tend to be large corporations (long distance phone companies) and phone calls are easier to trace back to source than e-mail.
The amazing thing about this whole debate is that there is no clear constitutional right for privacy (at least in the U.S.).
Consequently, it is not clear what the basis will be for any Supreme Court judgement in this case. Usually the Supreme Court rules when two or more Constitutional rights are at odds with each other (e.g. 10th vs. 16th... usually State's Rights (10th) is involved)... or when a particular phrasing in the Constitution is deemed "ambiguous" (1st Amendment... what is "speech")... but neither is the case for privacy.
So a key question is whether the Supreme Court, through its judgement(s), can establish such an expliit right... or do we require Congressional action?
Personally, I think we need more federal legislation and/or Constitional Amendments safe-guarding our privacy rights. In recent years, we've seen a piece-meal movement toward achieving such a goal (most notably, rights protecting student/criminal records) but it should be a concerted agenda. This will become a much more pressing need as the availability of sophisticated, cost-effective information technology increases. Can you imagine *physical* stores creating databases based on security camera recordings? It's not far-fetched (Vegas casinos already do it)
There are some major misconceptions spread on this site in the name of basic economics. Often, the arguments are a partial application of economics, creating misleading conclusions.
For this article, the misleading economic argument is that piracy has lead to lower prices and that this is a justifiable result of piracy as competition.
First off, there are two basic types of costs driving the gaming industry: fixed and marginal. Fixed cost is the development and marketing cost incurred by Sony and the developers whose value roughly does not vary with the number of sales they make (obviously, the fixed cost differs if you plan to sell 1 million copies as opposed to 100.. but the cost does not differ for 100,001 compared to 100,000). Marginal cost is the pure production cost, the incremental cost of pressing and retailing an additional copy of the game.
For most console games (if successful), the fixed cost are recovered during the initial sales in fully developed countries with defined property rights, namely U.S., Japan, and Western Europe. Economics shows that once fixed costs are recovered, competition can drive prices such that they reflect only marginal cost... this is the famous P=MC result.
However, at P=MC, fixed costs cannot be recovered. While P=MC may be a competitive outcome in the short-run, with the fixed costs of existing games already sunk, it is not a long-run equilibrium as no firm would continue to operate under the prospect of not fully recovering it's fixed cost. Note: the fixed cost is often referred to as "capital cost" in some popular press... this is what people usually refer when they say that they need to earn a reasonable rate of return on their capital... they need to earn enough to cover the f ixed cost and the opportunity cost associated with sinking the fixed cost in this endeavor as opposed to another.
Of course, this applies to other published products such as movies, books, CDs. This is why we see reduced prices for these items later on, after their initial release (bargain bin books/paperbacks, "budget price CDs," and second-run films): the idea here is that firms can charge closer to marginal price now because they had already largely recovered their fixed costs earlier with the more expensive first-run products.
So the lesson for console games and China? Sony and Nintendo are willing to charge lower prices in China precisely because they were able to charge higher prices in the U.S., Japan, Europe earlier. This is also the same reason why pharmaceuticals are (sometimes) willing to offer drugs to Africa at a much reduced price (they're much less worried about drug "piracy"... although it does happen to a much lesser extent in the form of generics).
That said, are prices in these traditional publishing industries "too high" ? Absolutely. But let's use the right arguments instead of simply trying to legitimize piracy.
"Business has changed fundamentally since the dot-com boom even if investing hasn't. To be successful in the business world today, you absolutely have to incorporate some sort of technology."
One of the most common of human fallacies is to overemphasize the events of today (losing the forest for the trees, in some sense). The success of business has always depended upon technology. The current computer/network-based IT is only just the most recent iteration of critical technologies for business.
Ask the buggy-whip producer of old. Did technology change his industry? Heck, he got wiped out when Ford popularized the assembly line, enabling him to produce cost-effective horse-less carriages.
Ask the scribe. Didn't Gutenberg's press put a lot of them out of business (not to mention change drastically the information technology scenario)?
More recently (but pre-dotcom), ask Xerox. When Japanese (and later Chinese) firms figured out reverse engineering and combined it with innovative production processes (e.g. just-in-time inventory, statistical quality control), Xerox went from being the leader to the laggard of the industry.
Examples are abundant. In one of the more humorous articles in the academic economics literature, some authors shed doubt on some sensational estimates other economists found on the productivity gains (as reflected in wages) due to the introduction of the personal computer (Quarterly Journal of Economics, February 1997, pp.291-303, available online at www.jstor.org). How did they do it? They used a similar empircial exercise to show how whopping the gain of the *pencil* was!
While it's good to keep the awareness of the role of technology in business high, let's not go overboard.
Suppose MSN ranking is based largely on the search queries / web-surfing of MSN.com users?
Given the presumption that Windows enthusiasts and users predominantly make-up MSN.com users, searches for "Linux," "open source," etc. would lead to the types of bias we see now... without an explicit sinister agenda by Microsoft.
Moreover, as an earlier poster noted, a search on "Windows" reveals articles on the recent Virus/Worm problems as top results. This would also be consistent with the view that MSN Search is fueled largely by the actual web surfing/query behavior of MSN.com users.
While Microsoft is clearly a strategic firm, it's not clear that *everything* they do (or their products do) is meant to be strategic.
Full disclosure: I submit this article from a laptop primarily running Windows. But my main workstation runs Linux.
The main problem I have with the article is that it ignores the basic principle of choice . As in some first person shooters, I imagine MMORPGs would come with the option to disable voice... so you can choose not to broadcast/receive real-time voice communication.
This option would keep most parties happy: the newbies who are drawn to the promise of trash-talking, the tight-knit group of friends who like to chat while they explore and conquer, and the veterans who would rather not have voice interfere with their virtual world immersion.
While Marx (maybe Lennin? I get the modern Socialists mixed up) complained about the tyranny of choices, I think most contemporary people find choices to be a good thing.
There is an important distinction that needs to be made in all of these "alternative music distribution" discussions. What seems to work - even perhaps optimally - in the short run, may not be feasible in the long-run.
In many of these discussions, we take as given the current stock of music. Artists have already produced (and largely been compensated) for their music. But in the long-run, we need to consider how our proposed distribution system would support the creation of new music.
The standard argument offered by RIAA and other pro-industry parties is that while price does not reflect production cost, this apparent "outrageous" mark-up can be attributed to [1] a risk premium (the "for every one group that succeeds, we invest in 100s that fail" argument... think ventue capital for an analogy) and [2] marketing/development costs. Of course, this is just a claim, the verity of which is debatable . But it should be debated.
A Quick Economics Lesson
on
LCD Price Fixing?
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· Score: 4, Interesting
Every instance of a good being sold above its cost (or, more precisely, its marginal cost) is *not* an example of price fixing. In general, such mark-ups occur when supply is inadequate to cover existing demand. In the textbook models, it is always assumed that there are competitors with no real capacity constraints who are willing to undercut the imcumbent firms when prices are higher than cost.
But in real life, especially in electronics markets, firms can face binding capacity constraints. A mark-up in the LCD market is an example of price-fixing only if the existing firms are creating an artificial shortage: i.e. they are explicitly or tacitly colluding to keep supply artificially low. The classic example of such efforts is OPEC and oil. However, if all firms are providing their capacity *and* the price at which quantity demanded equals quantity supplied is greater than cost... this is not price-fixing; it's just the firms earning a short-run rent until more capacity is added.
Like many posters before me, I've had first hand experience of this sort.
But I think we're jumping the gun: I once miscited a paper that I had actually read several times. I copied the citation from the reference section of a different paper I had on hand. [I got the name of the "lesser" co-author wrong; the article was very strongly identified with the lead author]
This is not that uncommon among my academic colleagues: we usually keep one article around (typically a survey article) purely as a citation reference. A citation error in that article can lead to many similar citation errors in other articles... even when the original article had been read! Moreover, academics who use LaTeX and BibTeX often share their BibTeX file... so citation errors can propogate that way as well...
The UCLA study assumes that people who propogate similar citations errors failed to read the actual article when in fact we can only infer that they had copied that citation from the original faulty article.
Although this is an interesting study, I think the citation problem is still of a lower order of magnitude than the "let's fudge some experimental results" problem.
I wonder how the "Evercrack" stories will contribute to the current calls for more explicit regulation of the computer/video game industry?
While I do have problems with some titles which (I believe) explicitly market to an inappropriate segment of our population (much like rated R movies during the 1980s/90s... before movie companies realized they could make more money selling non-R rated movies)... I'm not sure we can regulate MMORPG based on the "addiction" argument.
I keep thinking about the lessons thus far from the "Drug War" -- there are significant (unintended) costs to such regulation/criminalization. If we put an age limit, I think we make MMORPG a more subversive activity. This opens the door for kids to engage in other, more harmful subversive activities -- similar in the way some people are introduced to drugs through "underground" music scenes or serious alcoholism from weekend binge drinking during college. Can you imagine if we criminalized MMORPG for youths... we'd have "Evercrack houses" in major urban (and even some suburban) communities. Imagine what else people would be providing in these Evercrack houses... shudder.
Like many of the other posters, I agree that many Evercrack addicts would have fallen into some other pitfall even if they had never played MMORPGs. Addictions in general often are a manifestation of some other problem... social life difficulties, non-satisfactory career, self-image issues, etc. This does not mean that these people should not get help. But it does mean that we should be treating the underlying illness and not just the synmptoms (addiction).
As a consumer of the end product, I'm all for game programming education. But why universities? There are many skills that are useful and in demand in the world but not all are provided within the ivy towers.
The purpose of an university education tends to be more general and less industry specific: universities are not meant to replace trade schools but rather produce people who have skills that are more widely applicable. Even people who end up getting B.S. degrees (which were initially a controversial innovation) in the sciences tend to have an education that makes them suited for a large array of technical positions in multiple industries. (e.g. a B.S. in ChemE doesn't mean you necessarily have to work in the Petroleum industry)
I think game programming education can be better provided by a technical institute. By this, I don't necessarily mean the DeVry's and ITTs of the world. The institute can be of exceptionally high quality but focused on serving a particular industry. Think high end culinary schools, architectural & engineering programs, and even, to some extent, medical schools (many of which are not universtiy affiliated per se... and even those that are, are affiliated mostly just in name).
This would benefit students: those who know for sure they want to be game programmers can focus solely on courses designed to achieve those ends (no "distributional" requirements) and those who realize later on that they want to be game programmers can get a game programming education without having to re-apply and re-enroll at an university (not an easy thing to do).
Lastly, it should be noted that this path has worked fairly well (okay, open to debate) in the IT industry. Many of the IT professionals (especially entry-level SysAdmins) in the Silicon Valley were trained at local technical institutes and not universities like Berkeley/Stanford or even San Jose State.
I know as denizens of Western civilization (especially the U.S.), our first reaction is
[1] Sue them!
and then...
[2] How much can I get?
But I think it pays to think about your situation first. There may be some dynamics you might otherwise overlook.
Case A: Laid Off, Unemployed
If you're having problems finding a job, it may pay not to incite your former boss. You never know when your old firm may get a large project and decide to bring aboard some consultants.
While it hasn't happened to me, I have friends who were laid off, provided some occasional support at reasonable rates (this is *key*... the golden goose lesson)... and then were hired as outside consultants later. They ended up making a lot more money as a consultant than as an employee (for the same basic work). One is even getting frequent inquiries by the client about possibly joining them full-time.
Case B: Laid off, Employed Now
You have some incentive to maintain cordial ties with your old firm. But the incentives are definitely reduced by having current employment. If you hated your old firm and want to maintain loyalty with your current one, I'd just pass or agree under some pretty restrictive terms (i.e. define the total # of hours and compensation). Consulting money is nice but, clearly, your long term prospects are not tied with your old firm, better to focus on your current firm.
Case C: Quit
If you were the one who quit the job, I'd consider providing some support especially if you either [1] really left the firm holding the bag or [2] still have friends at the firm who would otherwise suffer. But make sure to get paid... but don't scalp them... fair market wage.
You'd be surprised how this type of action can result in good karma. I had a friend who quit his job for a higher paying position at a high profile company. Unfortunately, lay-offs happened and, as a high-salary newbie, he was one of the first to go. His boss at the old firm - he couldn't rehire my friend - went out of his way to call a few of his competitors to recommend my friend - he did this primarily because he appreciated how my friend provided support (many times for gratis) for several months after he left. My friend got a job based on one of these recommendation.
Case D: Fired
No way in hell. Or make sure it's enough to pay for your big screen plasma TV, your sizable tab at the local watering hole, and possibly a year's rent...
I think many of us are protesting the wrong crime.
Allowing Comcast to buy AT&T Broadband is not a major crime. This is just replacing one bad monopolist with another -- the two firms weren't explicitly competing against each other so there is no serious concern that the merger will lead to higher prices, lower quality. Ask yourselves: what was preventing AT&T or Comcast from unilaterally offering more expensive, crummy service? It sure wasn't the "threat" of competition from each other. If anything, it was the threat that consumers would get fed up and revolt or the government would actually be forced to respond to consumer outrage. A merger doesn't affect either constraints - if anything, the merger makes the joint firm more vulnerable to such outrage and government scrutiny.
The real crime is the fact that we tolerate and allow these regional monopolies to prosper under government protection.
I'm trying to figure out why people think computerized betting is any more vulnerable to fraud than the non-computerized variety.
The Breeder's Cup incident was an inside job! There have been numerous Casino incidents where employees have tried to scam their employers. A security system is only as good as the people with whom the system is entrusted. This is true for physical security as well as computer security.
Lastly, criminals are not, inherently, stupid. It only seems like that as the stupid ones are the ones that usually get caught. Borrowing from Kaiser Sousay (Kevin Spacey) in Usual Suspects : the greatest trick a master criminal has ever pulled is convincing the world that a crime has not been committed.
"International Business Machines Corp. chief executive Samuel J. Palmisano said yesterday that his company is investing $10 billion in a business strategy aimed at getting corporate customers to pay for their computing power in much the way they now buy power from utilities: as they use it."
Presumably, IBM plans to charge a higher rate during times when processing power is in high demand (regular business hours) and a lower rate during "off-peak" times (wee-hours of the day... then again, that's when I do most of my work...). This would allow corporations to most fully utilize their computing capacity, minimizing idle time for computer processors. (Of course, for people who have been in the computer industry, this isn't a new idea... we're just returning to our roots, in some sense).
This is not the way power is sold for most residential and commercial customers in the U.S. and abroad.
Electricity is currently sold at a fixed per-unit rate, regardless of when it is used. The cost of running that server farm during Noon on the hottest day of the year (when everyone is turning on their air conditioning) is the same as the cost of running it at 2:00 a.m. on a modest Spring evening.
Many experts have pointed out that it is this lack of "real-time" pricing of electricity that has been one of the major contributors to the recent electricity crisis in California: http://www.sen.ca.gov/sor/Energy/Realtimememo1.htm
Whether this strategy will succeed is questionable. People have forgotten that one of the failed bets that contributed to the Enron downfall was their investment in "bandwidth trading." In a market with ample capacity, there is very little incentive to trade. Unless there is a serious processor capacity constraint, I can't see how IBM will be able to make an effective market for processing time.
"When the airlines were deregulated, prices skyrocketed and became more mysterious, new aircraft types became fewer, meals and perks got skimpier, and share value was decreased."
I am not going to argue against his general premise. But the particular statement above about airlines is misleading and, in some ways, incorrect. (His comments about cable are, however, right on the money).
[1] Prices did not skyrocket: in fact, within a few years, the prices on most airline flights decreased. Under regulation, airline prices were regulated and most flights flew half-empty. Airlines had no discretion: even if they wanted to sell the empty seats at cheaper fares, they couldn't. The price decrease is the main reason why flying has become such a popular mode of transportation in the U.S.
[2] More flights: The poster forgets this benefit from deregulation; almost all industry participants and experts agree that the number of flights have increase dramatically since deregulation. The "Hub-and-Spoke" system has significantly increased the number of possible routes and the regulator barriers that prevent upstart firms from entering routes were largely decreased. Southwest Airlines, the airline most often credited as being the msot consumer friendly, was one of the major beneficiaries of deregulation.
[3] Aircraft types, meals... one of the things foreign companies have learned about the U.S. market is that the most important product characteristic to an American consumer is... price. (This is the main reason why Japanese electronics companies such as Sony sell only a small portion of their catalog in the U.S.) We would rather have the airline reduce our airfare than offer us a more fancy meal. Again, Southwest figured this out early and have benefitted immensely. Note also that Southwest is the airline with the fewest number of aircraft types. Why? By focusing on a few aircraft types, they reduce their maintenance/service/training costs substantially: the benefits of standardization. This then allows them to offer very competitive airfare... which is what most consumers want.
[4] Share Value: remember that in any economic transaction, the total surplus generated from that product/service is split between the firm (shareholder) and the consumer. A low share value is not necessarily a bad thing. This, if anything, shows the competitive nature of the industry and suggests that consumers are doing well. Again, note that currently the most valuable U.S. airline (market value wise) is Southwest. (No, I don't work for Southwest and my frequent flyer miles are with a competing airline)
Blind faith in deregulation is bad. But deregulation in of itself generally does tend to be a good thing. More often than not, the problem is with the particular implementation of deregulation.
"...I see this current phase as being a departure from the normal boom and bust cycles that rule any kind of capitalist economic model."
Just a point of clarification: boom-bust cycles are not an idiosyncratic symptom of capitalist systems or capital markets in general. Take the Five-year Plans implemented by the Soviet Union and the People's Republic of China during the middle of the 20th Century. The quotas were set years in advance and remained fairly inflexible (especially if the quota erred on the side of being "too much"). Plants would work like mad to meet their all important quota only to find that their output wouldn't / couldn't all be used. Worse were the cases where the plants would salvage their own machinery in order to meet their all important quotas.
These "command" style economies also suffered boom-bust cycles as well.
Karl Marx was one of the first scholars to warn us of the dangers of "overproduction"... but he too wrongly assumed this was a solely capitalist problem
Slashdot Mirror
I read the headline "Russian Mock Mars Mission" and was all ready to fire up a "Red, White and Blue" post!
... I almost started another international incident!
How dare the Russians mock U.S. Mars missions!!!
I must be channelling GW
I agree: MTV is evil.
... then I would find the rate increase very troublesome for its anti-competitive implications. This is why some of us are concerned about cross-ownership and media integration (i.e. content providers owned by same company as content distributors)
But I also disagree: why is it necessarily disagreeable for Viacom to be able to raise their rates arbitrarily?
The problem would be if Viacom had decided to raise their rates for one cable TV provider and not others (providing service in the same geographic area). For example, if Viacom decides to play nice with the local cable TV company (Time Warner, Cox, etc) but not the Echostar (Dish)
However, if Viacom decides to raise their rates unilaterally for all cable TV providers in that market, what is the problem? This is the same as any other product. The cost that the firm must face for raising its price is reduced sales. Arbitrary price increases are a problem only if you have no choice but to buy the product (e.g. diabetic and insulin)
Viacom has the right to raise its rate. Similarly, Echostar (Dish) has the right to refuse to carry the Viacom programming on basic service. And, similarly, consumers have the right to refuse to subscribe to cable TV at the higher retail rates.
This is how supply and demand works in a market.
Why don't EMI sign the guy, or at least come to some kind of arrangement to get commission from the sales?
... that's what you get for letting Michael Jackson outbid you for the catalog ... given Micahel's legal and financial woes ... maybe Paul can buy it back? ]
From the reviews (and prices on eBay) the albums been getting they could certainly make a good profit.
In the same spirit, Danger Mouse could have approached EMI after he created the remix but before he released it to the general public.
Granted, I think this is yet another example of the knee-jerk reaction created by our "modern" litigous society. But given that there are copyrights (I, like many, believe that copyright on 'artistic work' is counterproductive), it's not necessarily fair for Danger Mouse to negotiate with EMI after he released his music to the public.
Let me make the point obvious: suppose some unscrupulous advertiser decided he wanted the Beatles 'Let it Be' used for his commercial. He releases the commercial before getting permission and gets rave reviews/consumer reaction. Even though the band/EMI may not have wanted the song used to promote that particular product (say a political ad), they are in a bind: they can no longer prevent the action, only haggle over the appropriate 'payment.'
That said, EMI should go after the people who explicitly profit-ed from the "sale" of the remix. If all Danger Mouse did was release the music to the public (presumably for free), then he should be afforded the same protection as garage "cover" bands performing at the local bar (for free) and student artists practicing by recreating past masterpieces.
[ Yes, I know, Beatles songs get used for commercials all the time even though the living Beatles members hate the practice
Currently in both academic and policy discussions, there is some debate as to whether it is better to put the "burden of proof" for patents in the application process or the infringement/interference litigation process.
... hence the ongoing debate ...
The current U.S. system is arguably set toward "easier" application and "harder" enforcement - with the idea being that a court room has more flexibility and resources to tackle difficult intellectual property rights issues than the patent office. Moreover, this type of system avoids a bias against inventors: a more "front-loaded" system that applies burden at the application process would delay the patent and perhaps even shorten the patent life significantly (similar to the argument pharmaceuticals make regarding how rigorous FDA testing effectively halves the patent life of new drugs)
So it's nice to see cases like Machine Vision. Of course, for every successful court ruling against a harmful/irrational patent, there are several more that survive the litigation process
As many wine enthusiast already know, most of the appreciation of a wine/champagne comes from its aroma/smell rather than its "taste" per se.
...
Biologically speaking, although our sense of smell pales in comparison to many other mammals, our olfactory capability (in our nose) is still superior to our "tasting" capability (taste buds on our tongue).
This is the main reason why some wine drinkers swirl/gurgle their wine in their mouth when tasting. The swirl/gurgle allows the aroma to develop in the mouth cavity (leading eventually to our nose). So, yes, there is a "scientific" rationale for that otherwise boorish behavior
While I think the original post makes a good point, it should be noted that other traditionally "scientific" studies also use fairly arbitrary measures.
... all the tools are there to adopt different choices and see how the results change.
Take the case of (new) drug-testing: the statistical tests used are often arbitrary, both in the chosen significance level and the statistic itself. The former is well discussed (why is 5% or 1% necessarily the proper cut-off point for rejecting a null hypothesis) but the latter receives much less attention. Many of these statistics have known distributional properties only under assumptions that are either unverfiable or, worse, not bothered to be verfied by the researcher. I have seen statistics conducted on results from experiments where the underlying phenomena can only take positive values yet the researcher assumes it is governed by a Normal distribution (whose support is the entire real line)
Lastly, I think the researchers on the top 2004 recordings should be commended for following the spirit of science. They clearly explain their objective, the data they used, and their chosen method of analysis. Their work can be replicated from what they publish on their website. This is something that cannot be said of many experiments conducted in the finest university/industry labs by Ph.D. researchers! Truly in the spirit of scientific discovery, if one has problems with their "arbitrary choice"
[ That said, I wish the researchers had spent a bit more time explaining the motivation underlying some of their "arbitrary" choices. ]
Most ideas exist in the world before they are formalized by theorists. Certainly -- as the legend goes -- apples were falling from trees before Newton "discovered" gravity. But this does not make Newton's contribution (nor von Neumann's) trivial.
...). Furthermore, most systems of intellectual property rights create incentives ("winner-takes-all") akin to those in zero-sum games.
If you read carefully, you will realize that my comment was referring to the fact that von Neumann helped formalize the study of zero sum games (e.g. chess). Although his work was not definitive or comprehensive, von Neumann's contribution did lay out the path for future, formal studies of games. As you allude, many games are non-zero sum. In fact, the study of non-zero sum games was the primary pursuit of many of the later game theorists, such as Nash. The famed Nash equilibrium is a equilibrium concept that applies to non-zero sum games.
Lastly, note that the idea of zero sum game in the Spanish conquest sense is still prevalent in some parts today: consider our obsession with oil (well, some countries more than others
Along with modern computer science, Von Neumnann also made contributions in several other areas of applied mathematics that are currently major areas of research and development.
... von Neumann, along with Dantzig and Kanotorovich, helped develop the field of linear/mathematical programming and, more generally, operations research.
For example -- although Nash got the book and movie treatment as well as the Nobel -- the pioneering work on the modern mathematical treatment of games ("game theory") is considered to be "Theory of Games and Economic Behavior" (1944) written by Von Neumann and economist Oscar Morgenstern. Among their contribution include the concept of a zero sum game and the "minimax theorem."
Much closer to computer science
Of course, all three of these fields are related, with many of the same basic tools applicable to all three. But the fact that one man found so many seemingly different applications for the same basic matheamtical tools is still amazing. Regardless of whether Von Neumann was the father of modern computer science (personally, I lean toward Turing), I think we should follow the spirit of the original post and remember the birth of one of 20th Century's trule great thinkers.
Given the difficulty the US is having of not only enforcing but also legally maintaining the "Do-Not-Call" Phone Registry federal initiative, I have doubts that the US would ever be able to implement an effective anti-spam law
While spammers don't have the political clout of telemarketers, it is easier to enforce laws aimed at telemarketing than spam as the major customers of telemarketers tend to be large corporations (long distance phone companies) and phone calls are easier to trace back to source than e-mail.
The amazing thing about this whole debate is that there is no clear constitutional right for privacy (at least in the U.S.).
... usually State's Rights (10th) is involved) ... or when a particular phrasing in the Constitution is deemed "ambiguous" (1st Amendment ... what is "speech") ... but neither is the case for privacy.
... or do we require Congressional action?
Consequently, it is not clear what the basis will be for any Supreme Court judgement in this case. Usually the Supreme Court rules when two or more Constitutional rights are at odds with each other (e.g. 10th vs. 16th
So a key question is whether the Supreme Court, through its judgement(s), can establish such an expliit right
Personally, I think we need more federal legislation and/or Constitional Amendments safe-guarding our privacy rights. In recent years, we've seen a piece-meal movement toward achieving such a goal (most notably, rights protecting student/criminal records) but it should be a concerted agenda. This will become a much more pressing need as the availability of sophisticated, cost-effective information technology increases. Can you imagine *physical* stores creating databases based on security camera recordings? It's not far-fetched (Vegas casinos already do it)
There are some major misconceptions spread on this site in the name of basic economics. Often, the arguments are a partial application of economics, creating misleading conclusions.
.. but the cost does not differ for 100,001 compared to 100,000). Marginal cost is the pure production cost, the incremental cost of pressing and retailing an additional copy of the game.
... this is the famous P=MC result.
... this is what people usually refer when they say that they need to earn a reasonable rate of return on their capital ... they need to earn enough to cover the f ixed cost and the opportunity cost associated with sinking the fixed cost in this endeavor as opposed to another.
... although it does happen to a much lesser extent in the form of generics).
For this article, the misleading economic argument is that piracy has lead to lower prices and that this is a justifiable result of piracy as competition.
First off, there are two basic types of costs driving the gaming industry: fixed and marginal. Fixed cost is the development and marketing cost incurred by Sony and the developers whose value roughly does not vary with the number of sales they make (obviously, the fixed cost differs if you plan to sell 1 million copies as opposed to 100
For most console games (if successful), the fixed cost are recovered during the initial sales in fully developed countries with defined property rights, namely U.S., Japan, and Western Europe. Economics shows that once fixed costs are recovered, competition can drive prices such that they reflect only marginal cost
However, at P=MC, fixed costs cannot be recovered. While P=MC may be a competitive outcome in the short-run, with the fixed costs of existing games already sunk, it is not a long-run equilibrium as no firm would continue to operate under the prospect of not fully recovering it's fixed cost. Note: the fixed cost is often referred to as "capital cost" in some popular press
Of course, this applies to other published products such as movies, books, CDs. This is why we see reduced prices for these items later on, after their initial release (bargain bin books/paperbacks, "budget price CDs," and second-run films): the idea here is that firms can charge closer to marginal price now because they had already largely recovered their fixed costs earlier with the more expensive first-run products.
So the lesson for console games and China? Sony and Nintendo are willing to charge lower prices in China precisely because they were able to charge higher prices in the U.S., Japan, Europe earlier. This is also the same reason why pharmaceuticals are (sometimes) willing to offer drugs to Africa at a much reduced price (they're much less worried about drug "piracy"
That said, are prices in these traditional publishing industries "too high" ? Absolutely. But let's use the right arguments instead of simply trying to legitimize piracy.
"Business has changed fundamentally since the dot-com boom even if investing hasn't. To be successful in the business world today, you absolutely have to incorporate some sort of technology."
One of the most common of human fallacies is to overemphasize the events of today (losing the forest for the trees, in some sense). The success of business has always depended upon technology. The current computer/network-based IT is only just the most recent iteration of critical technologies for business.
Ask the buggy-whip producer of old. Did technology change his industry? Heck, he got wiped out when Ford popularized the assembly line, enabling him to produce cost-effective horse-less carriages.
Ask the scribe. Didn't Gutenberg's press put a lot of them out of business (not to mention change drastically the information technology scenario)?
More recently (but pre-dotcom), ask Xerox. When Japanese (and later Chinese) firms figured out reverse engineering and combined it with innovative production processes (e.g. just-in-time inventory, statistical quality control), Xerox went from being the leader to the laggard of the industry.
Examples are abundant. In one of the more humorous articles in the academic economics literature, some authors shed doubt on some sensational estimates other economists found on the productivity gains (as reflected in wages) due to the introduction of the personal computer (Quarterly Journal of Economics, February 1997, pp.291-303, available online at www.jstor.org). How did they do it? They used a similar empircial exercise to show how whopping the gain of the *pencil* was!
While it's good to keep the awareness of the role of technology in business high, let's not go overboard.
Does anyone know exactly how MSN Search works?
... without an explicit sinister agenda by Microsoft.
Suppose MSN ranking is based largely on the search queries / web-surfing of MSN.com users?
Given the presumption that Windows enthusiasts and users predominantly make-up MSN.com users, searches for "Linux," "open source," etc. would lead to the types of bias we see now
Moreover, as an earlier poster noted, a search on "Windows" reveals articles on the recent Virus/Worm problems as top results. This would also be consistent with the view that MSN Search is fueled largely by the actual web surfing/query behavior of MSN.com users.
While Microsoft is clearly a strategic firm, it's not clear that *everything* they do (or their products do) is meant to be strategic.
Full disclosure: I submit this article from a laptop primarily running Windows. But my main workstation runs Linux.
The main problem I have with the article is that it ignores the basic principle of choice . As in some first person shooters, I imagine MMORPGs would come with the option to disable voice ... so you can choose not to broadcast/receive real-time voice communication.
This option would keep most parties happy: the newbies who are drawn to the promise of trash-talking, the tight-knit group of friends who like to chat while they explore and conquer, and the veterans who would rather not have voice interfere with their virtual world immersion.
While Marx (maybe Lennin? I get the modern Socialists mixed up) complained about the tyranny of choices, I think most contemporary people find choices to be a good thing.
There is an important distinction that needs to be made in all of these "alternative music distribution" discussions. What seems to work - even perhaps optimally - in the short run, may not be feasible in the long-run.
... think ventue capital for an analogy) and [2] marketing/development costs. Of course, this is just a claim, the verity of which is debatable . But it should be debated.
In many of these discussions, we take as given the current stock of music. Artists have already produced (and largely been compensated) for their music. But in the long-run, we need to consider how our proposed distribution system would support the creation of new music.
The standard argument offered by RIAA and other pro-industry parties is that while price does not reflect production cost, this apparent "outrageous" mark-up can be attributed to [1] a risk premium (the "for every one group that succeeds, we invest in 100s that fail" argument
Every instance of a good being sold above its cost (or, more precisely, its marginal cost) is *not* an example of price fixing. In general, such mark-ups occur when supply is inadequate to cover existing demand. In the textbook models, it is always assumed that there are competitors with no real capacity constraints who are willing to undercut the imcumbent firms when prices are higher than cost.
... this is not price-fixing; it's just the firms earning a short-run rent until more capacity is added.
But in real life, especially in electronics markets, firms can face binding capacity constraints. A mark-up in the LCD market is an example of price-fixing only if the existing firms are creating an artificial shortage: i.e. they are explicitly or tacitly colluding to keep supply artificially low. The classic example of such efforts is OPEC and oil. However, if all firms are providing their capacity *and* the price at which quantity demanded equals quantity supplied is greater than cost
Like many posters before me, I've had first hand experience of this sort.
... even when the original article had been read! Moreover, academics who use LaTeX and BibTeX often share their BibTeX file ... so citation errors can propogate that way as well ...
But I think we're jumping the gun: I once miscited a paper that I had actually read several times. I copied the citation from the reference section of a different paper I had on hand. [I got the name of the "lesser" co-author wrong; the article was very strongly identified with the lead author]
This is not that uncommon among my academic colleagues: we usually keep one article around (typically a survey article) purely as a citation reference. A citation error in that article can lead to many similar citation errors in other articles
The UCLA study assumes that people who propogate similar citations errors failed to read the actual article when in fact we can only infer that they had copied that citation from the original faulty article.
Although this is an interesting study, I think the citation problem is still of a lower order of magnitude than the "let's fudge some experimental results" problem.
I wonder how the "Evercrack" stories will contribute to the current calls for more explicit regulation of the computer/video game industry?
... before movie companies realized they could make more money selling non-R rated movies) ... I'm not sure we can regulate MMORPG based on the "addiction" argument.
... we'd have "Evercrack houses" in major urban (and even some suburban) communities. Imagine what else people would be providing in these Evercrack houses ... shudder.
... social life difficulties, non-satisfactory career, self-image issues, etc. This does not mean that these people should not get help. But it does mean that we should be treating the underlying illness and not just the synmptoms (addiction).
While I do have problems with some titles which (I believe) explicitly market to an inappropriate segment of our population (much like rated R movies during the 1980s/90s
I keep thinking about the lessons thus far from the "Drug War" -- there are significant (unintended) costs to such regulation/criminalization. If we put an age limit, I think we make MMORPG a more subversive activity. This opens the door for kids to engage in other, more harmful subversive activities -- similar in the way some people are introduced to drugs through "underground" music scenes or serious alcoholism from weekend binge drinking during college. Can you imagine if we criminalized MMORPG for youths
Like many of the other posters, I agree that many Evercrack addicts would have fallen into some other pitfall even if they had never played MMORPGs. Addictions in general often are a manifestation of some other problem
As a consumer of the end product, I'm all for game programming education. But why universities? There are many skills that are useful and in demand in the world but not all are provided within the ivy towers.
... and even those that are, are affiliated mostly just in name).
The purpose of an university education tends to be more general and less industry specific: universities are not meant to replace trade schools but rather produce people who have skills that are more widely applicable. Even people who end up getting B.S. degrees (which were initially a controversial innovation) in the sciences tend to have an education that makes them suited for a large array of technical positions in multiple industries. (e.g. a B.S. in ChemE doesn't mean you necessarily have to work in the Petroleum industry)
I think game programming education can be better provided by a technical institute. By this, I don't necessarily mean the DeVry's and ITTs of the world. The institute can be of exceptionally high quality but focused on serving a particular industry. Think high end culinary schools, architectural & engineering programs, and even, to some extent, medical schools (many of which are not universtiy affiliated per se
This would benefit students: those who know for sure they want to be game programmers can focus solely on courses designed to achieve those ends (no "distributional" requirements) and those who realize later on that they want to be game programmers can get a game programming education without having to re-apply and re-enroll at an university (not an easy thing to do).
Lastly, it should be noted that this path has worked fairly well (okay, open to debate) in the IT industry. Many of the IT professionals (especially entry-level SysAdmins) in the Silicon Valley were trained at local technical institutes and not universities like Berkeley/Stanford or even San Jose State.
I know as denizens of Western civilization (especially the U.S.), our first reaction is
...
... the golden goose lesson) ... and then were hired as outside consultants later. They ended up making a lot more money as a consultant than as an employee (for the same basic work). One is even getting frequent inquiries by the client about possibly joining them full-time.
... but don't scalp them ... fair market wage.
...
[1] Sue them!
and then
[2] How much can I get?
But I think it pays to think about your situation first. There may be some dynamics you might otherwise overlook.
Case A: Laid Off, Unemployed
If you're having problems finding a job, it may pay not to incite your former boss. You never know when your old firm may get a large project and decide to bring aboard some consultants.
While it hasn't happened to me, I have friends who were laid off, provided some occasional support at reasonable rates (this is *key*
Case B: Laid off, Employed Now
You have some incentive to maintain cordial ties with your old firm. But the incentives are definitely reduced by having current employment. If you hated your old firm and want to maintain loyalty with your current one, I'd just pass or agree under some pretty restrictive terms (i.e. define the total # of hours and compensation). Consulting money is nice but, clearly, your long term prospects are not tied with your old firm, better to focus on your current firm.
Case C: Quit
If you were the one who quit the job, I'd consider providing some support especially if you either [1] really left the firm holding the bag or [2] still have friends at the firm who would otherwise suffer. But make sure to get paid
You'd be surprised how this type of action can result in good karma. I had a friend who quit his job for a higher paying position at a high profile company. Unfortunately, lay-offs happened and, as a high-salary newbie, he was one of the first to go. His boss at the old firm - he couldn't rehire my friend - went out of his way to call a few of his competitors to recommend my friend - he did this primarily because he appreciated how my friend provided support (many times for gratis) for several months after he left. My friend got a job based on one of these recommendation.
Case D: Fired
No way in hell. Or make sure it's enough to pay for your big screen plasma TV, your sizable tab at the local watering hole, and possibly a year's rent
I think many of us are protesting the wrong crime.
Allowing Comcast to buy AT&T Broadband is not a major crime. This is just replacing one bad monopolist with another -- the two firms weren't explicitly competing against each other so there is no serious concern that the merger will lead to higher prices, lower quality. Ask yourselves: what was preventing AT&T or Comcast from unilaterally offering more expensive, crummy service? It sure wasn't the "threat" of competition from each other. If anything, it was the threat that consumers would get fed up and revolt or the government would actually be forced to respond to consumer outrage. A merger doesn't affect either constraints - if anything, the merger makes the joint firm more vulnerable to such outrage and government scrutiny.
The real crime is the fact that we tolerate and allow these regional monopolies to prosper under government protection.
I'm trying to figure out why people think computerized betting is any more vulnerable to fraud than the non-computerized variety.
The Breeder's Cup incident was an inside job! There have been numerous Casino incidents where employees have tried to scam their employers. A security system is only as good as the people with whom the system is entrusted. This is true for physical security as well as computer security.
Lastly, criminals are not, inherently, stupid. It only seems like that as the stupid ones are the ones that usually get caught. Borrowing from Kaiser Sousay (Kevin Spacey) in Usual Suspects : the greatest trick a master criminal has ever pulled is convincing the world that a crime has not been committed.
The Washington Post article writes:
."
... then again, that's when I do most of my work ...). This would allow corporations to most fully utilize their computing capacity, minimizing idle time for computer processors. (Of course, for people who have been in the computer industry, this isn't a new idea ... we're just returning to our roots, in some sense).
m
"International Business Machines Corp. chief executive Samuel J. Palmisano said yesterday that his company is investing $10 billion in a business strategy aimed at getting corporate customers to pay for their computing power in much the way they now buy power from utilities: as they use it
Presumably, IBM plans to charge a higher rate during times when processing power is in high demand (regular business hours) and a lower rate during "off-peak" times (wee-hours of the day
This is not the way power is sold for most residential and commercial customers in the U.S. and abroad.
Electricity is currently sold at a fixed per-unit rate, regardless of when it is used. The cost of running that server farm during Noon on the hottest day of the year (when everyone is turning on their air conditioning) is the same as the cost of running it at 2:00 a.m. on a modest Spring evening.
Many experts have pointed out that it is this lack of "real-time" pricing of electricity that has been one of the major contributors to the recent electricity crisis in California: http://www.sen.ca.gov/sor/Energy/Realtimememo1.ht
Whether this strategy will succeed is questionable. People have forgotten that one of the failed bets that contributed to the Enron downfall was their investment in "bandwidth trading." In a market with ample capacity, there is very little incentive to trade. Unless there is a serious processor capacity constraint, I can't see how IBM will be able to make an effective market for processing time.
"When the airlines were deregulated, prices skyrocketed and became more mysterious, new aircraft types became fewer, meals and perks got skimpier, and share value was decreased."
... one of the things foreign companies have learned about the U.S. market is that the most important product characteristic to an American consumer is ... price. (This is the main reason why Japanese electronics companies such as Sony sell only a small portion of their catalog in the U.S.) We would rather have the airline reduce our airfare than offer us a more fancy meal. Again, Southwest figured this out early and have benefitted immensely. Note also that Southwest is the airline with the fewest number of aircraft types. Why? By focusing on a few aircraft types, they reduce their maintenance/service/training costs substantially: the benefits of standardization. This then allows them to offer very competitive airfare ... which is what most consumers want.
I am not going to argue against his general premise. But the particular statement above about airlines is misleading and, in some ways, incorrect. (His comments about cable are, however, right on the money).
[1] Prices did not skyrocket: in fact, within a few years, the prices on most airline flights decreased. Under regulation, airline prices were regulated and most flights flew half-empty. Airlines had no discretion: even if they wanted to sell the empty seats at cheaper fares, they couldn't. The price decrease is the main reason why flying has become such a popular mode of transportation in the U.S.
[2] More flights: The poster forgets this benefit from deregulation; almost all industry participants and experts agree that the number of flights have increase dramatically since deregulation. The "Hub-and-Spoke" system has significantly increased the number of possible routes and the regulator barriers that prevent upstart firms from entering routes were largely decreased. Southwest Airlines, the airline most often credited as being the msot consumer friendly, was one of the major beneficiaries of deregulation.
[3] Aircraft types, meals
[4] Share Value: remember that in any economic transaction, the total surplus generated from that product/service is split between the firm (shareholder) and the consumer. A low share value is not necessarily a bad thing. This, if anything, shows the competitive nature of the industry and suggests that consumers are doing well. Again, note that currently the most valuable U.S. airline (market value wise) is Southwest. (No, I don't work for Southwest and my frequent flyer miles are with a competing airline)
Blind faith in deregulation is bad. But deregulation in of itself generally does tend to be a good thing. More often than not, the problem is with the particular implementation of deregulation.
"...I see this current phase as being a departure from the normal boom and bust cycles that rule any kind of capitalist economic model ."
... but he too wrongly assumed this was a solely capitalist problem
Just a point of clarification: boom-bust cycles are not an idiosyncratic symptom of capitalist systems or capital markets in general. Take the Five-year Plans implemented by the Soviet Union and the People's Republic of China during the middle of the 20th Century. The quotas were set years in advance and remained fairly inflexible (especially if the quota erred on the side of being "too much"). Plants would work like mad to meet their all important quota only to find that their output wouldn't / couldn't all be used. Worse were the cases where the plants would salvage their own machinery in order to meet their all important quotas.
These "command" style economies also suffered boom-bust cycles as well.
Karl Marx was one of the first scholars to warn us of the dangers of "overproduction"