Marginal Revolution

Richard Feynman’s formula for the best holiday restaurant

Tyler Cowen — Wed, 03 Jun 2026 15:59:03 +0000

According to Feynman’s approach, in this context, people should try a different restaurant each night until they find one that exceeds a particular threshold that reflects a desired quality.

In Feynman’s equations this threshold is not fixed. Instead it declines more and more rapidly as the number of days left in the city reduces. In other words, as the days go by there is increasingly less motivation to hunt for an amazing dining spot, because the time you will have to enjoy it has decreased.

“The thresholds are being guided by the best thing you might be able to find if you kept looking,” said Griffiths. “If you have a long time to look, finding something amazing has a lot of value because you can go back many times.”

Feynman’s approach assumed there is equal possibility of finding any restaurant within a fixed range of quality. However the researchers also explored other scenarios.

“We showed that if the distribution of restaurants varies, then the strategy you should follow will change too,” said Griffiths.

Here is the full story, and here is the PNAS article. I think of that as a pretty pessimistic approach to the problem. In most locales you should be able to find lots of very good restaurants, so if you find a quality place early on you do not return to it, rather you keep looking for more, in fact feeling emboldened by your early success. Maybe this algorithm applies to Cuba?

Via both Adam K. and Mike Doherty.

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Sentences to ponder

Tyler Cowen — Wed, 03 Jun 2026 07:24:54 +0000

In 2019, there were about 150,000 people working in autism therapy. Six years later, there were 654,000—more than the number of people who work in mining and logging, or telecommunications, or at the US Postal Service.

That is from Derek Thompson. And here is the seven-minute nap story from the NYT:

At Compleat Kidz, a fast-growing chain of autism clinics based in North Carolina, the policy is firm: Naps cannot be longer than seven minutes before children are awakened to resume therapy. The company says this is necessary to prevent fraud since clinics can be paid only when children are awake and getting services. But it also allows the clinic to bill insurers or Medicaid for more hours.

I do not even need to say “model this.”

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Consent-based laws and aggregate fertility

Tyler Cowen — Wed, 03 Jun 2026 05:15:17 +0000

This paper examines how expanding the legal definition of sexual assault affects fertility and sexual behavior, using a panel of European countries. I find that switching to tacit consent-based legislation reduces fertility by about 4% relative to the mean. This effect is driven by a decrease in couple formation and an increase in abortion rates. Supporting evidence is consistent with a behavioral channel in which more risk-averse individuals withdraw from dating and partner markets following the reform, altering the composition of those who remain active toward a pool that is less precautionary. Consistent with this compositional shift, contraceptive use rises among younger women but declines among older age groups, while condom use falls among young men. Finally, an analysis of appeals court verdicts in Sweden following the adoption of consent-based legislation shows a decline in unanimous guilty verdicts, indicating challenges in assessing tacit consent. These results are consistent with a simple framework in which heterogeneity in risk perceptions and precautionary behavior in dating and partner markets, including reduced participation by some individuals, helps explain the observed decline in fertility following the reform.

That is by Adrian Mehic in the Journal of Health Economics. tekl.

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Big if true

Tyler Cowen — Tue, 02 Jun 2026 18:27:52 +0000

Several important questions — such as the possibility of debt-rollover without primary surpluses — turn on whether the present value of the aggregate endowment is finite, i.e., whether the economic growth rate under the “risk-neutral” measure, lies below the risk-free rate. It is tempting to argue that the endowment must be finitely valued, since there exist finitely-valued, non-depreciating assets whose cash flows are cointegrated with aggregate output. This paper shows why this argument is incorrect. A remarkable historical episode in which French government bonds were indexed to aggregate growth allows direct measurement of the risk-adjusted growth rate, which is found to exceed the risk-free rate.

That is from a new NBER working paper by Stavros Panageas.

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Tuesday assorted links

Tyler Cowen — Tue, 02 Jun 2026 15:47:03 +0000

1. Chaucerian John Fleming has passed away.

2. Can we agree to disagree?

3. The viral Wemby video.

4. New dark output from AI?

5. Should Florida eliminate property taxes for most residents?

6. Observations on quantum computing and its progress.

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The US Exports Intelligence

Alex Tabarrok — Tue, 02 Jun 2026 11:18:39 +0000

Most Americans work in the service sector so it’s not surprising that most export-related jobs are in the service sector (The U.S. exports about $2.2 trillion of goods and $1.2 trillion of services, but services are more labor intensive than manufacturing so they support more export jobs per dollar.)

Richard Baldwin writes:

In 2022, US service exports supported 8.9 million American jobs.

US manufacturing exports supported 2.2 million.

That’s four-to-one in favour of services. Yet in the national narrative, ‘export jobs’ almost always means things done in steel mills and factories.

…When a household in Germany pays for Netflix, that is an American export. When a Brazilian retailer buys Microsoft cloud capacity, that is an American export. When JPMorgan structures a financial deal in London, or an American consulting firm advises a company in Singapore, those are American exports too.

None of these is shipped in a container. No customs official records them as they clear the customshouse. Yet they are exports since they earn foreign income for America just as surely as the ‘Boeings, Beans and Beef’ that President Trump sold on his recent China trip.

Need I remind you that when OpenAI sells intelligence to people abroad, that is a US export? N.B. this is the future.

World trade in goods expanded roughly five-fold between 1990 and 2020. Trade in digitally enabled services expanded more than eleven-fold over the same period. These are the modern services.

The trade debate is fixated on manufacturing—where America is doing fine—while largely ignoring services, where America is crushing. Increasingly, our most valuable exports travel not on container ships but at the speed of light over fiber.

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The Republic of Love

Tyler Cowen — Tue, 02 Jun 2026 05:25:46 +0000

The author is Martha C. Nussbaum, and the subtitle is Opera & Political Freedom. Martha decided she did not wish to do a podcast after all, so since I put some real prep time in I thought I would offer some thoughts on the book directly, in part because it is not receiving substantive reviews elsewhere. I suspect the number of people qualified to review the book, on the musical and philosophical and historical fronts, is pretty small.

Overall the book is very good, and if you think you might be interested you should buy and read it. It shows a significant knowledge of opera, in part from Nussbaum’s own efforts as performer and singer. Some of the operas considered at length include the major Mozart pieces, Verdi’s Don Carlo, Beethoven’s Fidelio, Benjamin Britten (Albert Herring, for one), and John Adams’s Nixon in China. For Nussbaum, “political freedom” is not exactly that of the classical liberal kind, but for at least eighty percent of the book those differences do not matter.

I do have some objections to her points. While each seems to be a smaller matter, I fear they reflect a larger reality where Nussbaum subordinates her understanding of the operas to her broader political and social agenda.

She is highly suspicious of Don Giovanni, considering it a “problem opera,” which for her I suppose it is. She cannot bring herself to admit that fair numbers of women might actually be attracted to the Don, instead suggesting it is their baleful economic plight that leads them into such liasions. That seems to me a grossly rigid misunderstanding of the work, at variance with centuries of high-level commentary on the piece. Kierkegaard’s understanding remains ahead of hers, as does that of the ordinary theatergoer.

More generally, she is highly suspicious of romanticism, and she works hard to resist the notion that romanticism was a natural and perhaps even inevitable outgrowth of the classical spirit in music. Not surprisingly, Tristan is anathema to her — “I think Tristan is a tedious opera and that the view of love in it — all unsatisfied longing and no reciprocity — is adolescent and boring.” I would agree that virtually all Wagner operas, except perhaps Das Rheingold, are too long and thus have an element of tedium. Yet that is hardly an accurate understanding of the libretto or the love connection (no reciprocity??).

One would do well to supplement Nussbaum with Wayne Koestenbaum’s The Queen’s Throat. GPT Pro had a good summary of some of Koestenbaum’s quite contrasting perspectives:

“The operatic voice exceeds ordinary speech: it is too loud, too stylized, too bodily, too artificial, too emotional. That excess makes it politically charged because it disrupts norms of restraint, masculine self-control, realism, and “proper” social identity. Opera gives form to things that respectable culture often requires people—especially queer people—to hide: longing, hysteria, theatricality, shame, glamour, grief, fantasy, and desire……it is a place where identity is unstable, theatrical, mediated, and excessive. Opera is full of secrecy, codes, hidden meanings, displaced passions, and voices that say indirectly what cannot be said directly.”

By no means are those entirely illiberal tendencies, but they complicate any identifications of opera with liberalism or indeed any other foundational political set of views. In some fundamental fashion, opera is usually going a bit askew from strictly classical principles.

I take Beethoven to be modestly less liberal than she does, as I am concerned with the repeated sense of “culmination” in his work, and the implied notion of total communal integration as the final good. It is not Beethoven’s fault that even the Nazis staged Fidelio, but it does point to the poliitically Romantic strand in his music, a strand that Nussbaum pushes off center stage.

Why so little Rossini in this book? (He gets a brief mention on pp.303-304). He is arguably the essence of opera, and the carrier of the Mozartean tradition, yet he also was a supporter of the French monarchy and its restoration. Even Verdi was a conservative and monarchist, which puts his Don Carlo in a slightly different light. I am reminded of Carl Schmitt’s critique of Romanticism, namely that it could transfer loyalties so readily from revolutionary republicanism to reactionary monarchism. 19th century opera is not altogether innocent of this charge, and a deeper look at the material would have confronted this issue. Mazzini wrote a whole book on opera and saw it as supportive of nationalism above all else. A look at the history of Auber’s La Muette de Portici, the performance of which spurred Belgian nationalism and a revolt in 1830, is consistent with this view.

Nussbaum is too concerned with her own classificatory impulses, and insufficiently aware of how much opera itself — most of all the music — keeps on diverting our attention in other directions.

Overall, this is a very thought-provoking book, full of deep knowledge of both opera and philosophy. If it is afraid to follow down the path of where the music itself — and most of its major purveyors — were leading us, that makes it thought-provoking all the more.

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The chimera of universal coverage in a large, diverse country

Tyler Cowen — Mon, 01 Jun 2026 18:18:34 +0000

Our findings suggest that policies intended to subsidize health insurance of higher income groups, for example, the enhanced premium subsidies, are far less efficient than policies intended to further expand public insurance to low-income groups, for example, in non-expansion states.

That is from a new NBER working paper by Anuj Gangopadhyaya & Robert Kaestner.

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Monday assorted links

Tyler Cowen — Mon, 01 Jun 2026 16:17:59 +0000

1. Progress Ireland.

2. Some new results on tatonnement?

3. The new Paul McCartney album is his best since the 2004 Chaos and Creation in the Backyard. Here is a song by song analysis. For an 83-year-old, it is an astonishing and I think unparalleled achievement.

4. “Our findings suggest that the aggregate value of data is about 1.5% of GDP.”

5. Turkmenistan notes.

6. Seminar teaching rich kids how to manage their wealth (WSJ).

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Europe Demands Family Dynasties

Alex Tabarrok — Mon, 01 Jun 2026 11:17:12 +0000

In the US, someone with wealth is free to give it away more or less as they see fit (spousal claims excepted, which partly reflect marital co-ownership). In much of Europe, however, there is forced heirship–a large fraction of wealth must be handed down to children which makes it harder to direct large portions of wealth to charities, foundations, or non-family causes compared to the US. (Louisiana, with its French-Spanish civil law roots, is the one state with forced heirship and even it mostly gutted it in 1995.)

Here is an excellent post by John Arnold who, if he were European, would be required to give 75% of his wealth to his three children instead of spending it on philanthropy as he and his spouse are now doing.

America’s cultural ideal has been the self-made entrepreneur while Europe’s was rooted in aristocracy, with status inherited rather than earned. Europe’s inheritance laws show this divide.

Many European countries have “forced heirship” laws that require people to leave 50-75% of their estates to their children. Want to leave the majority of your wealth to charity? not allowed. Your kids are estranged from you, struggling with addiction, or irresponsible? still required to give them the money. Want your kids to avoid a life of entitlement? tough.

Incredibly, these laws look back at transfers made during your lifetime. If you have 3 children in France, you’re required to bequeath them a minimum of 75% of your estate. Because French law calculates this based on your assets at death plus all lifetime gifts, giving away more than 25% of your wealth while alive means your heirs can legally sue to force charities or foundations to return the funds. This has limited the development of the nonprofit sector on the continent.

The cultural gap between an entrepreneurial society and one shaped by dynastic wealth is enormous. If you make it yourself, you tend to want your kids to do the same. If you inherit it, the primary goal is protecting the estate for the next gen.

Countries like Spain, France, and Italy legally entrench family dynasties, while America has historically sought to limit them through estate taxes. The result is not only a weaker culture of philanthropy and civil society in Europe, but also less economic dynamism.

It’s interesting that in Capital Piketty discusses required equal division to children as an egalitarian legacy of the revolution but, as far as I recall, never reflects on the fact that forced heirship prevents a French entrepreneur from giving his fortune away to charity. A case for laissez-faire, no?

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UK facts of the day

Tyler Cowen — Mon, 01 Jun 2026 06:30:45 +0000

At the peak, the year to March 2023, almost 1.5m immigrants came. The Office for National Statistics thinks that far fewer people left, so net migration amounted to 944,000.

…Net migration to Britain last year amounted to 171,000—the lowest level since 2012, if the pandemic years are excluded. The human haul will probably be even lower this year, largely because the number of economic migrants continues to fall fast…James Bowes of Warwick University thinks net migration might even turn negative in 2026…

The government’s attempt to filter for highly desirable immigrants is not working in practice. As expected, the number of visas given to care workers has plunged. But the number of visas given to IT professionals has also fallen, from about 28,000 in 2022 to 10,000 last year.

According to The Economist, most Britons still think immigration to the country is rising. And it seems economically productive immigrants are being restricted too?:

Regardless of whether he or she arrived with a work visa or by other means, the average India-born employee in Britain earns £32,400 a year, whereas the average Nigeria-born employee earns £34,000. British-born people lag behind both, with average earnings of £30,900…

The Migration Observatory, a think-tank, has shown that people who arrive from outside the EU often earn little at first. Yet the wages of recent migrants have quickly exceeded the national average…

One of my fears is that, for informational and public choice reasons, it is unduly hard to crack down on unproductive immigrants only.

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The political right continues to gain ground in Latin America

Tyler Cowen — Mon, 01 Jun 2026 04:43:20 +0000

A leftist senator and a rightwing populist outsider who calls himself “The Tiger” will go to a run-off presidential election in Colombia this month after no candidate won outright in the first round of voting on Sunday.

Iván Cepeda, a close ally of outgoing leftist president Gustavo Petro, will face Abelardo de la Espriella, a combative former criminal defence lawyer who won the largest share of the vote on Sunday with 10.3mn votes, a 43.7 per cent share, though he fell short of the 50 per cent plus one required to win outright.

Cepeda came in second with 9.6mn votes, a 40.9 per cent share, with 99.9 per cent of ballots counted on Sunday evening. No other candidate reached 7 per cent of the vote.

Here is more from the FT. Note the right-wing candidate was not expected to do this well, though at current margins I am not sure why people keep ending up surprised.

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The returns to good data are rising

Tyler Cowen — Sun, 31 May 2026 18:55:46 +0000

When we want A.I. to solve real problems for real people, we need to make sure the data exists. That means cleaning up government data sets that are currently in a shambles (a project that the province of Alberta’s government found A.I. could make much faster and easier). It may also mean funding the creation of novel data sets that could eventually give A.I. systems traction on scientific problems that are currently beyond our capability to solve. Those data sets — like the Protein Data Bank — would be public goods, and so would need to be funded by the public.

Here is a longer NYT column on AI from Ezra Klein. And this:

But much of the A.I. capacity will remain in the private sector. So a public agenda for A.I. should also give the private sector reason to work on public problems. Like in Operation Warp Speed, the government could define the outcomes it wants — a drug, a solution — and guarantee a market if it’s found and distributed equitably.

Negativism is not going to win in this sphere.

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A new American exceptionalism?

Tyler Cowen — Sun, 31 May 2026 15:51:11 +0000

From Paul Krugman:

Let me be clear: I am not arguing that European productivity is mismeasured, and never said that. I am, instead, arguing that standard measures of productivity do not have the implications for cross-country comparisons of living standards and economic welfare that many people – including many economists – think they have. To put it a slightly different way: people are using data that is unsuited for the kinds of comparisons that they are trying to make. Thus, the conclusions that they are drawing from the data are misguided. But this is not to say that the data are wrong.

The apparent misunderstanding by Aghion et al of what I am trying to say is also reflected in their discussion. Their presentation mostly centers on arguing that European productivity growth is in fact lower than US productivity growth. This is puzzling, because I am not arguing that European productivity growth matches or exceeds US productivity growth. Like Aghion et al, I am fully aware that European productivity growth is lower than in the U.S. But this is not the actual issue that I am trying to address. My question is whether the standard comparison of European and US productivity growth rates is a good indicator of what is actually going on in the two economies over time.

OK, but if U.S. innovation drives global living standards, is that not a very strong argument for modest capital taxes in the United States, weak labor union privileges, high U.S. pharma prices, and so on? Imagine a mix of the libertarian and corporatist agendas, rather than the social democratic policies Krugman typically has argued for. I doubt however if Krugman sees it that way, but I am no longer sure why not.

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