You are sitting in a cinema. The movie sucks. Do you go out now or do you stay till the end of the film? A rational actor would choose to leave immediately because the price of the ticket is sunk cost and it should not affect his decision about the future. Even though he has spent money on getting in the theatre if he could have better time doing something else he should not try to get some bang for his bucks out of a crappy film.
The Bulgarian minister of economy appears not to pay much attention to the concept of sunk cost when discussing whether the country should build a second nuclear power plant in Belene. Traycho Traikov says “We should decide whether to lose the already invested in Belene if we decide to cancel the project” (in Bulgarian via Dnevnik). The question is not whether the country would lose 1-2 billion euro - those are already deep in the ground (or pockets if you believe some really believable rumors) but rather if the cost of finishing the construction and operating a second plant makes economics sense. I have yet to see a convincing analysis in support of that.
A somewhat lengthy profile of Larry Summers - National Economic Council chairman and former president of Harvard. I tried to speed read through some bits of it but almost every time there was a phrase that would actually make me reread the passage. It was worth it without a fail. This says enough about the quality of the piece.
Greg Mankiw calls it Larry Summers: A Hagiography. I say GREAT! You know that Beatles song - All you need is love. Well, that was in the sixties. Now all you need is confidence. And what better way to gain some but by idolizing the people who are supposed to fix the economy. I am looking forward to similar stuff about Ben Bernanke and Tim Geithner.
The TruthThroughAction.org video above is fun to watch but as Will Wilkinson puts it,
simultaneously reduces politics to fashion and elevates fashion to morality. To fail be a Democrat is depicted as something like an embarrassing fashion faux pas so egregious that it deserves a response of moralized disgust. To back the wrong political coalition is to become an untouchable, worthy of contempt. And to extend love, to extend pleasure, to those on the wrong team is beyond the pale.
1. Whether it would be a faux pas to ask Bush what nickname he had given me. I decided that it would.
2. What a great job my wife had done in making small talk about her childhood in Texas (her father had been a Republican precinct captain, and he had once hosted George H.W. Bush in his living room).
we have a very special guest judge: Nobel Laureate Paul Krugman has agreed to pick the winning entry.
I wonder whether they asked President George Bush as well. Whose ego would have given up when determining the best caption winner? I am so excited I will not drink any more coffee today.
The Bush-congratulates-Krugman photo that started it all was first spotted on The Economistblog. You can submit your ideas to the first two links above.
Right, but if your name is not Alex T. and you have a reasonable belief that your vote is highly unlikely to change the outcome of the election then why vote? A taste of Levitt/Dubner intro on the subject:
Within the economics departments at certain universities, there is a famous but probably apocryphal story about two world-class economists who run into each other at the voting booth.
“What are you doing here?” one asks.
“My wife made me come,” the other says.
The first economist gives a confirming nod. “The same.”
After a mutually sheepish moment, one of them hatches a plan: “If you promise never to tell anyone you saw me here, I’ll never tell anyone I saw you.” They shake hands, finish their polling business and scurry off.
