Climate update

• NPR explains cap-and-trade with a fun story about limiting use of the word "dude".
  
• Alan Durning of Sightline explains why he (mostly) loves Waxman-Markey.
  
• The Breakthrough Institute folks explain why they don't.
  
• The U.S. has restarted a pilot project for CCS (carbon capture and sequestration).
• And House speaker Nancy Pelosi comes back from China with a worrisome thought about a climate change trap:

Ms. Pelosi found herself greatly encouraged by the dialogue but deeply afraid that the two countries would fall into an old trap: hiding behind each other so that neither would have to do anything difficult or expensive.

• Finally, a good reminder from the fisheries world that caps can be changed too.
  

Elasticities and monopoly pricing

David Pogue talks about what he calls the App Store Effect:

The App Store Effect says this: if you cut a software program's price in half, you sell far more than twice as many copies. If you cut it to one-tenth, you sell far more than 10 times as many. And so on.

In other words, buyers are very responsive to price changes, i.e., the price elasticity of demand is less than -1. In these situations cutting prices will increase revenue, and for a product like software that has zero marginal cost, an increase in revenue means an increase in profit.

The question is whether this is really true, or whether it's just Pogue's wishful thinking, as with the Laffer Curve.

Health care update

Big debate about having a "public option", and bad news from a Congressional Budget Office review of health care proposals.

More depressing articles on the budget

The federal government is trying to bring back budget rules that embody some sort of common sense:

Mr. Obama announced he was sending legislation to Congress to restore the 1990s-era “pay as you go” law, known as Paygo. The law, in effect from 1990 to 2002, required that tax cuts or new entitlement spending — like the health care overhaul that Mr. Obama hopes will be a signature domestic achievement — be paid for through budget cuts or tax increases.

But that will only stop the hole from getting bigger... and the hole is already plenty big. No wonder there's talk about legalizing (and then taxing) marijuana.

PS. Supposedly the Democrats are also near consensus on a health care plan.

Wiki editing battles and economics

A funny NYT article on the "long tail" articles on Wikipedia that become the disputed ground in edit battles (hint: think Scientology) has a link to a Wikipedia entry on "lamest edit wars", and guess what's featured?

Nobel Prize in Economics

Should this article (and other articles and templates that mention this award) use the common name of the award, the official name, Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, the even more official name, Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne, or perhaps a compromise name, Nobel Memorial Prize in Economics? The ignoble debate has involved endless discussions, requested moves, revert wars, blocks, and strangely, two (N/n)obel Prizes.

Laughter: 10-16 million years old

According to Wired magazine. (Hat tip to AP.)

Efficient market hypothesis under attack

Note how this article confuses two "definitions" of the efficient market hypothesis:

• You can't beat the market.
• The market is "rational".

I don't even know what the second definition really means, so it's not surprise that I subscribe to the former definition. So does the author of the article:

Unless you’re Warren Buffett, an index fund is where you should put your money. Even people who don’t follow that advice know they should.