Tyler Cowen's Blog, page 5
May 1, 2015
Patent Trolls are Only the Symptom
I was going to write a post on how trolls aren’t the fundamental problem with the patent system but Timothy Lee has it covered:
…trolls aren’t the primary problem with the patent system. They’re just the problem Congress is willing to fix. The primary problem with the patent system is, well, the patent system. The system makes it too easy to get broad, vague patents, and the litigation process is tilted too far toward plaintiffs. But because so many big companies make so much money off of this system, few in Congress are willing to consider broader reforms.
A modern example is Microsoft, which has more than 40,000 patents and reportedly earns billions of dollars per year in patent licensing revenues from companies selling Android phones. That’s not because Google was caught copying Microsoft’s Windows Phone software (which has never been very popular with consumers). Rather, it’s because low standards for patents — especially in software — have allowed Microsoft to amass a huge number of patents on routine characteristics of mobile operating systems. Microsoft’s patent arsenal has become so huge that it’s effectively impossible to create a mobile operating system without infringing some of them. And so Microsoft can demand that smaller, more innovative companies pay them off.
… In effect, the patent system is acting as an innovation tax, transferring wealth from companies that are creating successful technologies today to companies that acquired a lot of patents a decade ago.
A more fundamental change would be to offer patents of varying length, say 3, 7, and 20 years with the understanding that 3 year patents will be approved quickly but 20 year patents will be required to leap a high hurdle on non-obviousness, prior art and so forth. See my paper Patent Theory versus Patent Law.
My video on patents is a quick and fun introduction.
Prosperity Notes
ABC: The Treasury Department recently sold 44,000 one-dollar bills to one person — at a price of $5.95 apiece.
The bills weren’t even all that special — they weren’t very old, and they didn’t have any major flaws that made them valuable to collectors.
What they did have though, was four number eights in a row in their serial numbers — a sign of luck to many people of Asian descent.
And that’s made the bills popular. The Treasury’s Bureau of Engraving and Printing says it has sold over 70,000 such “prosperity notes” to thousands of people around the world — not including the huge sale to one individual.
Now that is a high rate of seigniorage. You can buy your own lucky bills from the Treasury. Westerners may prefer the 777 series. There is a discount for bulk orders, but you will still be paying more than a dollar for a dollar. That doesn’t feel lucky to me.
Hat tip: The Blacklist.
April 30, 2015
Can cheap wine taste great?
And not just if you are drunk:
When consumers taste cheap wine and rate it highly because they believe it is expensive, is it because prejudice has blinded them to the actual taste, or has prejudice actually changed their brain function, causing them to experience the cheap wine in the same physical way as the expensive wine? Research in the Journal of Marketing Research has shown that preconceived beliefs may create a placebo effect so strong that the actual chemistry of the brain changes.
Related experiments were run with milkshakes, by Hilke Plassmann and Bernd Weber. There is more here, of considerable interest, hat tip goes to Samir Varma. Do any of you know of an ungated copy?
This new article asks how much placebos are affected by your DNA.
Arrived in my pile
Gary B. Gorton, The Maze of Banking: History, Theory, Crisis. This volume collects his best articles.
Arnold Thackray, David C. Brock, and Rachel Jones, Moore’s Law: The Life of Gordon Moore, Silicon Valley’s Quiet Revolutionary. Appears to be the most thorough and comprehensive treatment to date.
Vishaal Kishore, Ricardo’s Gauntlet: Economic Fiction and the Flawed Case for Free Trade.
The road that is Bolivian
Yes, Yungus:
For decades, the road had its own rules. The most important was to drive on its left side. That allowed down-bound motorists to peer out their windows and get a better look at how close their wheels were to the abyss.
Amid fog, rain and landslides, accidents killed 200 to 300 people per year.
You can read more about it here. I was once in La Paz, and unwilling to leave because it would have meant traversing this road. Nor did I have enough time to fly somewhere and back.
Thursday assorted links
1. 12 Communist buildings that are still standing; I like most of them. A lot.
2. Where should you give to help Nepal?
3. Partisan nudge bias (pdf).
4. An argument that TPP isn’t so good for the global poor. I would note a few points: first, trade diversion arguments, if applied consistently, would in practice leave us with pretty high levels of protectionism. There are plenty of estimates TPP will lead to more trade, not just diverted trade. Also, if Vietnam doesn’t gain that much from this trade, how can the trade diversion effect be so significant? Second, to the extent “trade” is not so important, bad IP law should not be so costly either. I find many trade skeptics suddenly start gushing over the benefits of trade once the topic of trade-limiting IP comes up. A lot of the critics wish to have their cake and eat it too.
5. Do black mayors produce better outcomes for black residents?
6. Commentisweird.
April 29, 2015
*Universal Man: The Lives of John Maynard Keynes*
That is the new Keynes biography by the renowned Richard Davenport-Hines. It’s not like most biographies I know. The font is fairly large, and the presentation is non-comprehensive and fairly subjective. It is more like reading the transcript of some very good talks on Keynes, and less of a trudge than many bios. There is even a chapter on Keynes as lover, but actually quite serious and good, as it helps set the man in context. For Davenport-Hines, Keynes was most of all a Cambridge Apostle. This book will help you get inside the mind of Keynes, definitely recommended.
My favorite things Baltimore
I’m passing through Baltimore on the train today (a talk at U. Penn and chatting with Ashok Rao), so I have license to do this. Here goes:
1. Author: There is plenty to choose from here, including Poe, James Cain, Dashiell Hammett, Frank O’Hara, and H.L. Mencken. I do not love F. Scott Fitzgerald as many do, same with Upton Sinclair, but they deserve mention. I’ll opt for Poe, with Gold-Bug as my favorite story. Hammett’s Red Harvest I also enjoy and have taught a few times, delicious incoherence. Anne Tyler has a few good books, but stop reading after one or two of them.
2. Philosopher: John Rawls, though since we’re talking about Baltimore I feel I should call him Jack.
3. Painter: Morris Louis or Grace Hartigan? I feel I can do better, help out people.
4. Popular music: Tori Amos grew up in Baltimore, I like her Little Earthquakes and various singles, live cuts, and cover versions, available only in scattered form as far as I know. Is Dan Deacon popular? Frank Zappa is a remarkable musical talent, but I don’t actually enjoy listening to him.
5. Jazz: Eubie Blake, there is also Bill Frisell and Billie Holiday.
6. Classical music: Philip Glass was born there, though I associate him with NYC.
7. Baseball: I still remember that old Orioles rotation with Cuellar, McNally, Palmer, and Dobson, all twenty-game winners in the same year.
8. Soviet spy: Alger Hiss.
9. Movie, set in: I don’t love Diner or Avalon, how about The Accidental Tourist, or Twelve Monkeys? The first half of Silence of the Lambs is excellent.
For good measure toss in Thurgood Marshall, Tim Page, Babe Ruth, The Wire, Walters Art Museum, the underrated BSO, and Brooks Robinson. Who or what else am I forgetting?
The bottom line: Lots for one city! Let’s hope it gets better soon.
My China questions for you, yes you
Which VPNs are working these days? What other advice do you have for me, when it comes to accessing the internet? Is accessing some sites easier with a Mac? Can GMU email be accessed without a VPN? WordPress? MR? Is there a difference between iPhones and iPads and laptops in these regards?
I thank you all in advance for your assistance.
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