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Boeing plays tough

This article from Reuters is an account of Boeing's reaction when union leaders reject Boeing's offer of a contract that would have eliminated pensions; Boeing announced that it is drawing up a short list of possible locations in which to build the 777x. The article illustrates bargaining and game theory. The short list raises the disagreement outcome for Boeing and reduces the disagreement outcome for the union. The short list also could be viewed as a threat or signal in sequential game.

Tax rates over the last 10 years

This posting is a good description of statistics about the effective average federal tax and transfer payment rates for various income classes since 2001. It would be a good introduction to a discussion on vertical equity. 

A positive review of "modest" increases in the minimum wage

This opinion from the NYT supports Obama's proposal to increase the minimum wage. It states that the evidence shows that the impact of modest increases in the minimum wage is insignificant and describes recent studies that provide a series of possible explanations. 

I wish that the effect was not limited to modest increases in the minimum wage. I wonder if, given the variations in employment driven by technological change, the business cycle, and demographics, statistical tests may not be able to identify the small change in employment that a modest increase in the minimum wage might cause. 

The evidence claiming that the minimum wage reduces employment opportunities suffers flaws as well. Opponents of minimum wage legislation often cite the high rates of unemployment of young people and African-Americans and the increase in these rates relative to our history before minimum wages. Perhaps other factors explain these rates and their increase.

PPACA v. markets

This article in the NYT describes why some professional living in New York will have to pay more under PPACA than they do when left to their own devices and free market exchanges. They have formed associations and purchased health insurance through the associations rather than as individuals. PPACA forces them to enroll as individuals. On the plus side, they will be able to children on their policies longer, face no consequences if they have or develop preexisting conditions, and not worry about how much insurance companies have paid in benefits over their lifetimes.  

The article is a good example of the effects of asymmetric information and a potential solution to it, the ingenuity of individuals and how they respond to incentives, and an unintended consequence of public policy.

Coke's experiment with vertical integration

Here is an article that I use when talking about vertical integration being motivated by a combination of relationship-specific investments and contracting costs. However, maybe the example was not good. Here is an update.

Pricing at Amazon

This article from the WSJ is a good introduction to pricing, the trade-off between volume and margins, and price discrimination on the Internet.