I fear that bad management is a recurring problem with those teams. So perhaps no system of incentives can fix that.

I am not sure that bidding and superstar teams are so unpopular with the fans, especially as the NBA has become more international. Maybe ten superstars sell the league in any case, and you want them to be on very good teams.

…The incentives system also has to be palatable and explicable to the very casual fan, which I think rules out some of the more complex options. If the fans are asking “is my team trying to win or to lose now?” the system is maybe already broken.

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2. How much is a badly damaged Gentileschi worth?

3. Sabine Hossenfelder on UAP evidence.  And a bit more.

4. New record as Indian painting auctions for $17.9 million.

5. On African urbanization.

6. South Africa banned TV until 1976.

7. Ping Pong Park, in France.

8. How do AI models respond to direct authoritarian requests?

9. Lynne Kiesling on which parts of economics will be repriced, as a result of AI.

10. How replaceable am I?  An agent takes on that question.  And another Karpathy idea.

The post Friday assorted links appeared first on Marginal REVOLUTION.

       

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…Today a given number of autoworkers can make, according to my calculations, three times as many cars in a year as they could 50 years ago.

The problem is that consumers do not want three times as many cars. Even as people get richer, they increase their spending on manufactured goods only modestly, preferring instead to spend more on services like travel, health care and dining out. There are only so many cars a family can own, but that’s not the case for expensive vacations or fancy meals. As a result we have fewer people working in auto factories and more people working in luxury resorts and the like.

These forces — rising productivity but steady demand — explain why the United States was losing manufacturing job share as far back as the 1950s and 1960s, long before trade became a major factor.

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I document a sudden, sharp and historically unprecedented decline in self-reported happiness in the US population. It occurred during 2020, the year of the Covid pandemic, and mainly persists through 2024. This happiness crash spread across nearly all typical demographics and geographies. The happiest groups pre-Covid (e.g., whites, high income, well-educated and politically/ideologically right-leaning) tend to show the largest happiness reductions. The glaring exception is marital status, which has consistently been an important marker for happiness. The already wide happiness premium for marriage has, if anything, become slightly wider. With both married and unmarried reporting large declines in happiness the country has become segregated: slightly over half-the married adults-remain happy on balance; the unmarried, nearly half, are now distinctly unhappy. I also show that across a number of aspects of personal and social capital post-Covid deterioration is the norm, including a collapse of belief in the fairness of others and of trust in the US Supreme Court.

Here is the paper, via the excellent Kevin Lewis.

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2. Nic von Wielligh and Lydia von Wielligh-Steyn, The Bomb: South Africa’s Nuclear Weapons Programme.  I had been looking for a book on this topic for a long time, and finally I found the right one in a South African bookshop.  They did build six atomic bombs, almost seven, and this is the story of how that started and was later reversed.  Hundreds of pages of substantive detail, and I had not realized how much the conflict in Angola, and Cuban/Soviet involvement, was a major factor in the whole episode.

3. David Stuart, The Four Heavens: A New History of the Ancient Maya.  We keep on learning lots about the Maya, and this is the best book to follow what has been going on.  Well-written and clear, and it does not numb your mind with details you may not care about.

4. Mark B. Smith, Exit Stalin: The Soviet Union as a Civilization 1953-1991.  I am seeing an increasing number of excellent books on what the Soviet Union really was.  This one is well written, broad in scope, and yet rich in detail, treating the covered era as a living, breathing time in human history.  It makes the time and place imaginable.  The book also goes a long way toward disaggregating different Soviet eras, rather than just the end of Stalinism.

5. Kevin Hartnett, The Proof is in the Code: How a Truth Machine is Transforming Math and AI.  A very useful book about the history of proving math theorems by computer.

The post What I’ve been reading appeared first on Marginal REVOLUTION.

       

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2. Incentives matter?  Dealing with Iranian scientists (New Yorker).

3. “In the months that followed, US tariff policy changed more than 50 times, spanning rate increases, rate decreases, new product exemptions, and new product inclusions.”

4. The British minimum wage.

5. The next generation of books and publishing?

6. More Scott Sumner movie reviews.

7. How people actually use ChatGPT.  A massive new dataset from OpenAI.

8. They added a baby to the end of Tristan!???

9. Results on reproducibility.  And a simple visual, comparing different fields.  “Education” does not do great.  And the Nature link.  None of this should come as a surprise.

10. Resilient societies: a Mercatus call for proposals.

11. “There are now ten toilets in space.” (And the aliens?)

12. The anti-data center coalitions and their squabbles.

Lots to read and ponder in today’s links…

The post Thursday assorted links appeared first on Marginal REVOLUTION.

       

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From his house in Los Angeles, Mr. Gallagher, 41, used A.I. to write the code for the software that powers his company, produce the website copy, generate the images and videos for ads and handle customer service. He created A.I. systems to analyze his business’s performance. And he outsourced the other stuff he couldn’t do himself.

His start-up, Medvi, a telehealth provider of GLP-1 weight-loss drugs, got 300 customers in its first month. In its second month, it gained 1,000 more. In 2025, Medvi’s first full year in business, the company generated $401 million in sales.

Mr. Gallagher then hired his only employee, his younger brother, Elliot. This year, they are on track to do $1.8 billion in sales.

Here is more from Erin Griffith at the NYT.   Maybe Sam said “one person” running a billion dollar company, but if the two are closely genetically related still I will count this.

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China’s share in US imports at 9% is back down to what it was right before China joined the WTO (2001).

From Gita Gopinath.

Addendum: If you are curious, here is GPT on how much is now shipped through third countries.

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New Penn-Wharton study shows per-capita federal spending on each age group:

Seniors: $43,700

Children and young adults: $4,300.

Here is more from Jessica Riedl.

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Tyler and Arthur cover how scarcity makes savoring possible and why knowing you’ll die young sharpens the mind, what twin studies tell us about the genetics of well-being and why that’s not actually depressing, the four habits of the genuinely happy, the placebo theory of happiness books, curiosity as an evolved positive emotion, the optimal degree of self-deception, why Arthur chose Catholicism rather than Orthodoxy, what the research says about accepting death, how he became an economist via correspondence school, AI’s effect on think tanks, the future of classical music, whether Trumpism or Reaganism is the equilibrium state of American conservatism, whether his views on immigration have changed, what he and Oprah actually agree on, which president from his lifetime he most admires, Barcelona versus Madrid, what 60-year-olds are especially good at, why he’s reading Josef Pieper, how he’ll face death, and much more.

Excerpt:

COWEN: What do you think of the view that books on happiness or the meaning of life, they’re a kind of placebo? They don’t help directly, but you feel you’ve done something to become happier, and the placebo is somewhat effective.

BROOKS: I think that there’s probably something to that, although there’s some pretty interesting new research that shows that the placebo effect is actually not real. Have you seen some of that new research?

COWEN: Yes, but I don’t believe it. Nocebos also seem to work in many situations.

BROOKS: I know. I take your broader point. I take your broader point. I think that the reason for that is that when people read most of the self-improvement literature, not just happiness literature, what happens is that they get a flush of epiphany, a new way of thinking. That feels really good. That feels really inspirational. The problem is it doesn’t take root.

It’s like the seeds that are thrown on a path in the biblical parable. They don’t go through the algorithm that I just talked about, and so not all of these things can be compared. I would not have gotten into this line of research and this line of teaching if I thought that it was just going to add another book to a long line of self-improvement books that make people feel good but don’t ultimately change their lives.

COWEN: Say a person reads a new and different book on happiness once a year at the beginning of the year. Now, under the placebo view, that’s a fine thing to do. It’ll get you a bit happier each year. Under your view, it seems there’s something wrong. Isn’t the placebo view doing a bit better there? You should read a book on happiness every year, a different one. It’ll revitalize you a bit. Whether or not it’s new only matters a little.

BROOKS: Yes. It might remind you of some things that you knew to be the truth that you had fallen away from. One of the things that I like to do is I like to read a good book by one of the church fathers, for example. They’re more or less saying the same thing. It reminds me of something that I learned as a boy and that I’ve forgotten as an adult. It might actually remind me to come back to many of these practices and many of these views.

I think that there are real insights. There’s real value that can come from science-based knowledge about how to live a better life. I think that you and I are both dedicated to science in the public interest and also science in the private interest as well. I think there is some good to be gotten through many of these ideas. Not all. Once again, not all happiness literature is created equal.

And:

COWEN: Why not cram all that contemplation of death into your last three months rather than your last 18 months? Do intertemporal substitution, right? Accelerate it. Ben Sasse probably is facing a pretty short timeline, but he’s done a remarkable job, even publicly, of coming to terms with what’s happening. Isn’t that better than two years of the same?

And:

COWEN: I think it’s fair to say what we call the right wing in America, it’s become much, much more Trumpy. Does this shift you to the left or make you question what the right wing was to begin with, or do you just feel lost and confused, or do you say, that’s great, I’m more Trumpy, too? How have you dealt with that emotionally and intellectually?

BROOKS: Yes. I’ll answer, but you’re going to have to answer after me, will you?

COWEN: Sure.

Interesting throughout.

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And yet a path to the top remains.

First, he has not lost any of his first four games (all are draws), so he is hardly a weakie.

Second, and for my purposes more importantly, the tournament has winner-take-all rewards.  So many players will be taking chances to try to move into the lead.  Yet in chess positive expected value big chances are hard to come by, so often players, in their determination to top the standings, will take modestly negative expected value big chances, especially in the opening phase of the game.

Now, if you are willing to take a negative expected value big chance, will you prefer to do so against the top players in the tourney, such as Caruana, or the lower-rated players, such as Blübaum?  The answer is obvious.

So he will have his chances.

The post How Matthias Blübaum can win it all appeared first on Marginal REVOLUTION.

       

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2. Transcript and video of Cass Sunstein lecture on Hayek at Mercatus.

3. Baseball cards for talents.

4. Why Scotland succeeded.

5. Regulating AI agents.  And traps for AI agents.

6. How the Iranian government uses patronage to stay in power (WSJ).  And how the Iranian economy is surviving wartime pressures (FT).

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I agree that judges should face stronger incentives to make good decisions, but the obvious problem with penalizing judges who release people who later commit crimes is that judges would then have very little incentive to release anyone—and that too is a bad decision. Steven Landsburg solved this problem in his paper A Modest Proposal to Improve Judicial Incentives, published in my book Entrepreneurial Economics.

Landsburg’s solution is elegant: we must also pay judges a bounty when they release a defendant.

Whether judges would release more or fewer defendants than they do today would depend on the size of the cash bounty, which could be adjusted to reflect the wishes of the legislature. The advantage of my proposal is not its effect on the number of defendants who are granted bail but the effect on which defendants are granted bail. Whether we favor releasing 1 percent or 99 percent, we can agree that those 1 percent or 99 percent should not be chosen randomly. We want judges to focus their full attention on the potential costs of their decisions, and personal liability has a way of concentrating the mind.

One might object that a cash bounty will cost too much, but recall that the bounty is balanced by penalties when a released defendant commits a future crime. The bounties and penalties can be calibrated so that on average the program is budget-neutral. The key is to get the incentives right on the margin.

The structure of this problem is quite general. Ben Golub, for example, writes:

There should be a retrospective reputational penalty imposed on referees who vote no on a paper because the paper is too simple technically — if that paper ends up being important. It’s an almost definitional indicator of bad judgment.

Quite right, but a penalty for rejection needs to be balanced with a bonus for acceptance. Get the marginal incentive right and quality will follow!

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