Matt Nolan

Actors back union out of self-interest

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I agree with Peter Jackson that the Aussie film union is a “bully boy”.  And I find the actors supporting a boycott of the Hobbit highly self-interested.

For one, we know that having the unionisation of the workforce will lead to fewer movies, and the exclusion of potential “actors” who would work for lower wages – but can now not get a job.

Given this though you might say, how are the wealthy actors being self-interested?  After all, these minimum conditions have nothing to do with them!  However, this is just not true.

Since we know that unionisation limits the potential pool of actors, and that the acting skill requires “learning by doing“, we can say that this type of unionisation limits competition for actors roles – and so will push up the wage these actors can demand.

How can we say that labour in the NZ film industry is being exploited?  These people are willing to work for the current wage – and there is an industry here willing to hire them.  The fact that some of the workers want to exclude other workers from the industry to drive up their own wages is abhorrent – and I don’t understand why these big name actors believe they are taking the moral high ground when they are simply acting in their own self-interest

Matt Nolan

Competition for Ecstasy

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Via Dim Post there is an article from the Herald discussing competition in the illicit drug market.  The main point is:

Ecstasy dealers are competing “like Pepsi and Coke” to sell their drug

Now, after reading this statement my first reaction was “good!”

Why?  Well, if their is competition in the industry it will improve quality – ensuring that the current information problem in the market, that leads to a lower quality and possibly more damaging product, are being circumvented by the competitive process!

Of course, the article doesn’t take this tack.  It says something about blah blah blah, people are taking drugs, blah blah blah, drugs are bad, blah blah blah, talking about drugs is immoral, blah – I don’t know, I sort of got bored of the article once I realised it was talking a load of sh*t.

So, in conclusion, competition for the provision of drugs is good – long live sites where people can compare experiences and provide information for future potential drug takers, so that they are fully informed and can make a sensible decision.  Furthermore, long live competition in the industry – ensuring that we get a more efficient allocation of drugs in society.

Matt Nolan

Compulsory taxi cameras: Crampton translates

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Eric Crampton translates a NBR article on the introduction of compulsory cameras in taxis.  My favourite bit:

“In-vehicle cameras are widely supported among the industry as a way of preventing competition by new rivals, and while drivers can never be 100 percent safe, these measures will make a significant reduction to the risks competition that drivers face.”

I cannot understand how the government convinced itself this was good regulation – I suspect the industry told them that it would “look like” they were saving lives, a political win, and so they just went for it.  Fail.

Matt Nolan

Don’t stop limiting our competitors ability to compete say rivals

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That is what the title to this article is suggesting right?

My impression is that Telecoms rivals want two things to continue happening:

  1. Telecom to be ineligible for broadband subsidies that they are getting from government,
  2. Telecom to be regulated in a way that:  Reduces Telecom’s ability to increase downstream costs.  Likely increases Telecom’s marginal costs in retail markets.

As a result, is this really surprising?  By increasing the relative marginal costs of a competitor, you can improve your own profitability in the end.  I wouldn’t really trust Telecom’s competitors as an objective analyst of how telecommunication policy should take place in NZ 😉

Matt Nolan

Excellent example of price discrimination

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Via the Freakonomics blog comes the following picture:

Source.

At first glance this seems weird, they are charging different prices for the same thing!!!  However, as anyone with experience of vending machines and universities knows, these puppies provide a lot of service to students late at night.  In fact, it is typical for sections of the machine to sell out before nightfall.

As we know that the first people to the machine will pay the lower price, we can also say that once the cheap chips sell people will have to pay more.

Now, given that the local tuck shop will be closed by night time we know that the number of substitutes to the vending machine falls at night.  As a result, this pricing system ensures that the owner of the vending machine can charge more for the same chips at night time (assuming of course that the cheaper chips will sell out during the day time when substitutes are available) – when people value them more highly and are willing to pay more.

Excellent stuff.

Matt Nolan

Strategy spaces and monetary policy

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Over at Worthwhile Canadian Initiative, Nick Rowe suggests that central banks should find something else to discuss instead of interest rates.  The analogy provided is that of oligopoly competition: namely how the Cournot-Nash and Bertrand games have exceedingly different outcomes, even though the only superficial difference is that one game involves choosing output and the other game involves choosing price.

However, in the same way I don’t believe the difference in these games is just the product of “framing”, I am not sure if the call to arms against using interest rates as a focal point is necessarily that compelling.

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