Reputation systems work because people are mostly good

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Economist Tim Harford writes about holidaying in prosperous Bavaria, where hotels let you run up bills of €1000+ without a credit-card and all room-keys are stored in a cupboard where any guest can get at them, and asks how this can all work without being destroyed by dishonesty? Read the rest

John Oliver on subprime auto-lending and its killswitches

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We've been following the trade in remote kill-switches for cars sold to subprime borrowers since 2009, and watched in dismay as they got worse and worse: though John Oliver's report on the billions inflating the subprime auto-lending bubble touches on these, he focuses on the economic factors -- sleaze, corruption, moral hazard -- driving the tech. Read the rest

Scalpers drive Harry Potter play prices from £140 to £8,327

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What do you get when you combine fantastic wealth-inequality with winner-take-all entertainment economics and high-speed trading algorithms? The Viagogo marketplace, where botmasters who've harvested every available ticket for the new Harry Potter play, Harry Potter & the Cursed Child are auctioning them off to the war-criminals and financiers who've colonized London since the Blair years -- with Viagogo trousering a healthy £1,772.53 transaction fee on each ticket. Read the rest

Luna's prime real-estate and how to seize it

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Though 1967's Outer Space Treaty says no country can lay claim to the moon (and thus no person can get a deed to lunar territory), the treaty does allow for commercial and scientific installations on Luna, and there are some very small, very valuable bits of crater rim that could be squatted in this way, to the enormous benefit of whomever gets there first (and the detriment of all others). Read the rest

Cash grants to people with unexpected bills successfully prevents homelessness

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In The impact of homelessness prevention programs on homelessness (Scihub mirror), a group of academic and government economists show that giving an average of $1,000 to people in danger of losing their homes due to unexpected bills (for example, emergency medical bills) is a successful strategy for preventing homelessness, which costs society a lot more than $1,000 -- more importantly, these kinds of cash grants do not create a culture of "dependency" that leads to recklessness, nor does it have a merely temporary effect. Read the rest

Monopoly power and the decline of small business: big business vs democracy, growth & equality

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In the 15 years between 1997 and 2012: 72,000 small US manufacturers shut down; as did 108,000 local retailers and 13,000 community banks (fully half of America's complement of small banks!). The number of US startups has dropped by 50% since 1970. These statistics are not the result of the changing times: they're due to massive, monopolistic corporations stacking the deck against small competitors through unfair and corrupt practices, to the detriment of American growth, equality and democracy. Read the rest

How racist traffic stops criminalize black people, and what to do about it

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When Philando Castile was killed by a Minneapolis cop after a traffic stop, we learned that he had been stopped 46 times before and had been fined for driving without a license. Read the rest

Stiglitz quits Panama's official money-laundering panel over internal sabotage

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Nobel prize-winning economist Joseph Stiglitz has resigned from the Panamanian committee set up to probe the country's money-laundering industry in the wake of the Panama Papers leak, because the Panamanian government has reneged on its promise to publish the committee's findings and now says it will keep them secret. Read the rest

Dark Patterns: why do companies pursue strategies that make their customers regret doing business?

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In this 30 minute video, Harry Brignull rounds up his work on cataloging and unpicking "Dark Patterns," (previously) the super-optimized techniques used by online services to lure their customers into taking actions they would not make otherwise and will later regret. Read the rest

Highest-paid CEOs generate lowest shareholder returns

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In Are CEOs paid for performance? Evaluating the Effectiveness of Equity Incentives, a new study from MSCI, researchers compared the salaries of 800 US CEOs of large and medium-sized companies to the returns to their shareholders during their tenure. Read the rest

A catalog of weird-ass corners of game theory research

Game theory is the place where politics, economics, psychology and math meet, and it offers the seductive promise of being able to quantify empirically optimal outcomes from thorny problems ranging from whether to go to war to how to split the tab at a restaurant. Read the rest

Study: top bank execs saw the crash coming and sold off shares in their own institutions

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In a new working paper from the Center for Economic Policy Research, scholars look at the trading records of shareholders, directors and top executives of major financial institutions in the runup to the crash of 2007, and find that the sell-offs by the top five executives at a bank strongly correlated with that bank's losses in the crash, but that other stakeholders' trading do not correlate: in other words, the very top brass of banks knew that they were sitting on piles of worthless paper and sold before anyone else knew about it, and kept their shareholders, direct reports, and the board of directors in the dark. Read the rest

Negative Swiss 50-year bond yields just shattered the global insecurity barometer

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National treasury bonds are the safe option in times of global turmoil, and the more uncertain things are, the more people buy them, and the higher their prices go. Read the rest

Brexit's other shoe drops: austerity, deregulation, climate nihilism

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As Conservative grandees jostle each other in the looming contest to become Prime Minister of the UK, we're starting to learn more about their plans for governing UK without the constraint of the European Union's human rights, environmental and labour rules. Read the rest

White House contends with AI's big social challenges, July 7/NYC

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Meredith from Simply Secure writes, "Artificial Intelligence is already with us, and the White House and New York University’s Information Law Institute are hosting a major public symposium to face what the social and economic impacts might be. AI Now, happening July 7th in New York City, will address the real world impacts of AI systems in the next next 5-10 years." Read the rest

Low income US households get $0.08/month in Fed housing subsidy; 0.1%ers get $1,236

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America is in the grips of one of the worst housing crises in its history, with 1 in 3 households spending more than 30% of their income on mortgage or rent payments; the US government has two kinds of housing subsidy, one for poor renters and the other intended for middle-income mortgage payers, but guess who gets most of the money? Read the rest

Elizabeth Warren on monopolies in America, including Apple, Google, and Amazon

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Elizabeth Warren is on fire in this speech at a New America Open Markets conference on monopolies this week in DC; Senator Warren is pitiless, lucid and laser focused on the way that corruption creates monopolies, and monopolies suborn corruption. Read the rest

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