Steven D. Levitt's Blog

Economist Tyler Cowen‘s Twitter feed was recently hacked — for the purposes of selling a weight-loss product.  In response, and following in the heels of his successful and hilarious #FedValentines economics meme, our own Justin Wolfers proposed a new project — #tylertweets.  Some of our favorites:

The best Whoppers are to be found at BKs attached to gas stations, but avoid if they advertise clean restrooms. -Art Carden @artcarden
cannibalism is wrong, but not for the reasons its critics say. We ignore the wisdom of cannibals at our peril. -@ModeledBehavior
My  # tylertweets  involve the Gold Standard, two albino goldfish, a braised goat and Paul Krugman in a small town in Mexico. -Justin Wolfers @justinwolfers

(Photo: Artizone)

We’ve noted before on this blog that food receives limited protection from copying. But that doesn’t mean it receives no protection. As we all know, Coca-Cola’s secret formula is still secret. And sometimes food companies patent novel (and not so novel) dishes and techniques.

Patent and “trade secret” (the legal right Coke relies on) present very different economic benefits, however. Trade secret is forever—if the secret can be kept secret. Patent, by contrast, lasts 20 years and protects the invention against any copyist. More importantly, patent is fundamentally based on disclosure: to patent something, you have to explain how it works.

How do firms choose between the two? That’s a big question. But we can get a window on it by looking at something that has been in the news lately—the so-called  “Vegas Strip Steak.”

According to Oklahoma State University, which is claiming the patent, the Vegas Strip Steak is very similar to the New York strip.  The OSU folks are keeping quiet about the precise location of the Vegas Strip Steak – at least until their patent is granted. Which, if the United States Patent and Trademark Office does its job, probably won’t ever happen.

Why?  There’s no way OSU could patent the steak itself. The steak is just a piece of a cow. It is, in other words, a product of nature, which cannot be patented. 

Wisely, OSU’s patent apparently isn’t on the steak itself, but on the knife cuts necessary to extract the steak.  But that approach is dubious as well.  Once you know where the steak is, the cuts necessary to get at it may be obvious to a skilled butcher. Things that are obvious cannot be patented.  

If OSU probably shouldn’t get a patent on the Vegas Strip, can it emulate Coke and use trade secret?  That isn’t too likely either.  People have been eating cows for many thousands of years, and we know the animal pretty well.  If the OSU folks have indeed identified a piece of meat that was previously undervalued, people who know bovine anatomy will probably have a pretty good idea of where in the animal to look once they’ve seen the steak.  And even if somehow the location of the Vegas strip is harder to find than we think it is, the secret will probably get out soon after OSU teaches a slaughterhouse how to extract the steak – someone will talk. 

There is, of course, Coke’s great counterexample Coke discloses its formula only to a few top executives, and it takes extraordinary measures to keep the recipe secret.  So maybe OSU could also exert strict control over their “recipe” for extracting Vegas strips.  To do so, they’d probably have to build their own slaughterhouses, hire just a small number of people to produce the steaks, pay them really well to keep quiet, and bind them to contracts that attempt to punish them if they do not. 

The economics of this strategy are hard to see, which is probably why OSU is not pursuing it. That leaves one last possibility.

OSU’s best strategy is probably to claim a trademark in “Vegas Strip”. That way, even if other producers can sell the same cut of meat, they can’t use the same name for it.  And in a world where many if not most consumers have no idea which part of the cow their steak comes from, the “Vegas Strip” trademark may be very valuable.  If consumers associate a great taste with the “Vegas Strip” name, they’ll pay more for OSU’s steak.  And that can help it to beat its competitors even if other producers are allowed to market the same cut of meat.

All of which shows that, as far as IP goes, there is more than one way to skin a cow.

Al Roth, whom we’ve blogged about in the past, is known (to me, at least) as the King of Repugnance.

Not that Roth is himself in any way repugnant (quite the opposite), but he is masterful at  thinking about the kind of transactions that we find morally or ethically or otherwise disturbing and how the trends of repugnance shift over time.

For a forthcoming book anthology called In 100 Years (inspired, Roth tells us, by a 1930 essay by Keynes called “Economic Possibilities of Our Grandchildren"), Roth has written an essay (PDF here) about the future of repugnance:

“To summarize the predictions I’ve made here about 100 years from now, I think that the trend of increasing prosperity will continue, but that it will not necessarily (as Keynes predicted in 1930) bring us all lives of leisure.  Many will work harder than ever, and some of the things some of us will do to work more efficiently — like taking performance enhancing drugs — will go from being repugnant today to ordinary in the future. Other things we do eagerly today, like use computers for access to more and more data, may become repugnant in some respects, as privacy of personal data moves to the forefront of civil rights issues. And while medical advances will continue on all fronts, and advances in preventive medicine will make medical care and long-lived good health more widely available, some kinds of medicine, including reproductive medicine along with other aspects of reproduction, will become commoditized, while others, such as genetic manipulation of various sorts, may become repugnant. Some kinds of education will become commoditized, but among the matching markets that we see today, selective admissions to elite universities will remain, as will networking and matchmaking for family formation (under a wider variety of marital forms) and perhaps increasingly, for research collaborators and other kinds of business partners.  And there will still be economists, and economic mysteries to unravel, including those that will arise from the increased computerization of markets and marketplaces. Much of market design that we struggle to understand today will have become commoditized and be found in off the shelf software, but understanding how to design novel markets and fix market failures will remain an active concern of our economist grandchildren.

Which of Roth’s predictions do you find most outlandish?

(Photo: David Cohen)

I have a friend named Barry Singer, an author who also runs a bookshop that specializes in Churchillania.

He has now combined all these passions to write a book called Churchill Style: The Art of Being Winston Churchill. It seems at first glance to be mainly a guide to what Churchill ate, drank, smoked, and wore but it truly is a phenomenal book in that it also brings us deeply into how Churchill thought, struggled, and persevered in his personal and political lives.

Here’s a Wall Street Journal excerpt that focuses mainly on the softer stuff. Even if you’ve read a small mountain of Churchill bios including the magisterial Martin Gilbert edition, I’d still recommend giving the Singer book a shot.

It can be hard to read books by friends because you fear being disappointed and having to handle that disappointment. In this case, I am pleased to report there wasn’t an ounce of disappointment.

Oh, internet, how I do love thee!

You deliver things daily to my doorstep that I didn’t know I wanted, that I didn’t even know existed, but which instantly put a lapidary glow on a humdrum day.

The latest example concerns my father. His name was Solomon Paul Dubner; he died when I was 10; he was a newspaperman; I wrote about him at length in my first book, for which I thought I’d read everything he wrote.

But the internet — or, really, a blog post on the Schenectady County (N.Y.) Historical Society Library site — delivered this nugget about a fascinating place called the Dialogue Coffee House in Schenectady. It is described as:

“[A] non-profit organization aimed at creating dialogue among members of the local community. The organization’s coffee house hosted presentations and open dialogues about a number of topics, including social, economic, and political issues, local politics and government, civil rights, the war in Vietnam, visual and performing arts, health, religion and spirituality, psychology, labor issues, education, morality, and the nature of dialogue. While controversial topics were often featured at the Dialogue Coffee House, the atmosphere tended toward conversation rather than debate. In addition to open discussions and presentations, the coffee house also provided a space for underground films, musical performances, and plays as an impetus for dialogue.” 

The post includes a couple of great vintage photographs from the Dialogue Coffee House records, courtesy of the Schenectady County Historical Society’s collection:

Leonard Miller asks a question during a session of the Dialogue Coffee House about a series of tape recordings written and produced by Rev. Malcolm Boyd about civil rights. This dialogue was held January 14, 1966, at the First Methodist Church in Schenectady. Photograph from the Dialogue Coffee House Records. (Photo: From the collection of the Schenectady County Historical Society)

This photograph shows the second location of the Dialogue Coffee House at 121 S. Ferry Street. The Dialogue was located on the second floor. Photograph from the Dialogue Coffee House Records. (Photo: From the collection of the Schenectady County Historical Society)

And the post also includes an excerpt from an article my father wrote but which I’d never encountered:

“Political protagonists seem to lay down their arms when they go to the house. Persons from all major political parties gather at this Schenectady night spot to talk and listen. Those of opposite political camps – liberals and conservatives – find they can hold dialogue with each other with feelings of tolerance and understanding.”

– Paul Dubner, in a 1967 Schenectady Gazette article, writing about the Dialogue Coffee House.

I had three immediate responses to reading that paragraph:

The visceral Proustian rush that accompanies this sort of encounter with one’s own past.
Pride in the fact that my father found such an interesting place to write about, and appreciated what was so interesting about it.
Sadness over the fact that this kind of public dialogue between opposing minds is practically nowhere to be found today.

We are working on a Freakonomics Radio episode about the management-consulting profession. It was inspired in part by a Robin Hanson blog post about the industry and the fact that Steve Levitt worked as a consultant between undergrad and grad school and has lately rekindled the flame, starting up a firm called The Greatest Good.

We are looking to interview an experienced consultant, preferably with a top firm, who can freely talk about the industry broadly and his or her work specifically.

If you are that person or can recommend such a person, please shoot us an e-mail here. Many thanks.

In our latest podcast “You Eat What You Are, Part 1,” Tyler Cowen talked about the relationship between immigration and food. Gustavo Arellano, author of Taco USA: How Mexican Food Conquered America, has written in Reason a more sentimental account (with historic nuggets) of how Mexican food went mainstream:

Food is a natural conduit of change, evolution, and innovation. Wishing for a foodstuff to remain static, uncorrupted by outside influence — especially in these United States — is as ludicrous an idea as barring new immigrants from entering the country. Yet for more than a century, both sides of the political spectrum have fought to keep Mexican food in a ghetto. From the right has come the canard that the cuisine is unhealthy and alien, a stereotype dating to the days of the Mexican-American War, when urban legend had it that animals wouldn’t eat the corpses of fallen Mexican soldiers due to the high chile content in the decaying flesh. Noah Smithwick, an observer of the aftermath of the Battle of San Jacinto in 1836, claimed “the cattle got to chewing the bones [of Mexican soldiers], which so affected the milk that residents in the vicinity had to dig trenches and bury them.”

Arellano thinks that people who want to protect Mexican food’s authenticity are on the wrong track:

I’m not claiming equal worth for all American interpretations of Mexican food; Taco Bell has always made me retch, and Mexican food in central Kentucky tastes like … well, Mexican food in central Kentucky. But when culinary anthropologists like Rick Bayless and Diana Kennedy make a big show out of protecting “authentic’ Mexican food from the onslaught of commercialized glop, they are being both paternalistic and ahistorical. 

(Photo: photosteve101)

Our latest Freakonomics Radio on Marketplace podcast is called “Playing the Nerd Card.”

(You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)

It’s about the rise in basketball players (and other athletes) showing up at press conferences wearing the kind of eyeglasses usually associated with Steve Urkel and Buddy Holly. Among the practitioners: LeBron James, Dwyane Wade, Kevin Durant and Russell Westbrook, Carmelo Anthony, and Robert Griffin III.

What’s going on here? Has the rate of myopia exploded, even among premier athletes?

We talk to Susan Vitale, a research epidemiologist with the NIH’s National Eye Institute, who worked on a large study on myopia in the U.S. There has indeed been a huge spike in recent decades, and it’s especially pronounced among blacks:

So does that mean that all these ballplayers are simply part of the Rise of the Nearsighted?

Um … no. In the podcast, you’ll hear LeBron and D-Wade tell us why they wear their glasses. Hint: It isn’t to see better. And some of their former NBA brethren think the trend has already gone too far.

You’ll also hear from Harvard economist Roland Fryer, a familiar presence to Freakonomics readers. Fryer talks about whether the “acting white phenomenon” comes into play here, and he discusses all this glasses-wearing as a “two-audience signaling” situation:

FRYER: “These guys are saying to one audience, ‘Hey, I’m here, I’m an athlete, I’m a Heisman Trophy winner.’ To the other one, ‘Look at the glasses.  Look at how I’m dressed.  Look at how I carry myself.  I can promote your product.’”

FWIW, we put out another podcast about myopia among rural Chinese schoolchildren and how some kids turned down an offer of free eyeglasses because of the stigma associated with poor vision.

Isn’t it interesting that what’s stigmatic in one setting can be so desirable in another?

From the shy and retiring (not!) Austan Goolsbee:

Note: updated headline reflects new understanding of “Retweet” volume.

(Photo: Richard Reeve)

An editorial in Nature argues that geoengineering needs a charter if research on the topic is to move forward. The journal cites the recent cancellation of the Stratospheric Particle Injection for Climate Engineering (SPICE) experiment due to concerns about “intellectual-property rights, public engagement and the overall governance regime for such work.” Nature argues that resolving the intellectual-property concerns may be the easiest part:

More troubling is the lack of an overarching governance framework. Although the SPICE trial has been cancelled, other tests of geoengineering technology will surely follow. Other work, such as fiddling with clouds to make them more reflective or to try to bring on rain, touches on both climate-change mitigation and weather modification.

Geoengineers should keep trying. They should come together and draft detailed, practical actions that need to be taken to advance governance in the field. Regulation in these cutting-edge and controversial areas needs to be working before the experiments begin, rather than racing to catch up.

We touched on the very tricky governance questions in our SuperFreakonomics chapter about geoengineering:

As of this writing, there is no regulatory framework to prohibit anyone — a government, a private institution, even an individual — from putting sulfur dioxide in the atmosphere. (If there were, many of the world’s nearly eight thousand coal-burning electricity units would be in a lot of trouble.)

Still, [Nathan] Myhrvold admits that “it would freak people out” if someone unilaterally built the thing. But of course this depends on the individual. If it were Al Gore, he might snag a second Nobel Peace Prize. If it were Hugo Chávez, he’d probably get a prompt visit from some U.S. fighter jets.

One can also imagine the wars that might break out over who controls the dials on Budyko’s Blanket. A government that depends on high oil prices might like to crank up the sulfur to keep things extra cool; others, meanwhile, might be happier with longer growing seasons.

(HT: Eric M. Jones)