a blog

by Josh Nicholas

Is Google a monopolist?

competition should not be defined by some arbitrary number of producers, but by whether other firms are free to enter the market. Ultimately, market entry is the key prerequisite of innovation. If the state imposes constraints on that freedom in such a way as to establish or maintain a single private or public producer’s market dominance, then it has created a harmful monopoly, by severely limiting opportunities for innovation.

Not sure I agree with this... This may be true for most goods but does not factor in the global, network effects of online spaces.

Let us return to the EU’s recent actions. The Commission levied its June 2017 fine because Google prioritized its own “comparative shopping service” over those of its competitors. And yet, anyone who uses Google and its various services does so freely, not because Google is somehow forcing them. They could just as well use other services, so their decision to use Google must mean that Google provides the service most useful to them.

Pascal Salin at Project Syndicate

The importance of local news

Following a newspaper closure, we find municipal borrowing costs increase by 5 to 11 basis points in the long run. Identification tests illustrate that these results are not being driven by deteriorating local economic conditions. The loss of monitoring that results from newspaper closures is associated with increased government inefficiencies, including higher likelihoods of costly advance refundings and negotiated issues, and higher government wages, employees, and tax revenues.

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Skin colour and wages

...we focus on individuals who “passed for White,” an important social phenomenon at the time. To do so, we identify individuals coded “Mulatto” as children but “White” as adults. Passing meant that individuals changed their racial affiliation by changing their social presentation while skin color remained unchanged. Comparing passers to their siblings who did not pass, we find that passing was associated with substantially higher earnings, suggesting that social presentations of race could have significant consequences for economic outcomes...

We find that about 10–13% of 1910 Mulattoes were classified as White in 1940, and Mulattoes who passed for White earned 31–42% more than non-passers. Because passers tended to be more educated than non-passers, the increase in earnings from being classified as White decreases when we control for education, though it remains considerable at 20–31%... Passers earned 14–21% more than their brothers who did not pass.

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The cost of affirmative action

We evaluate the effect of introducing a gender quota in an environment where high-performing women fail to enter competitions they can win. We show that guaranteeing women equal representation among winners increases their entry. The response exceeds that predicted by the change in probability of winning and is in part driven by women being more willing to compete against other women. The consequences are substantial as the boost in supply essentially eliminates the anticipated costs of the policy..

Prior to affirmative action, women, including high-performing women, fail to enter the competition. Despite there being no discrimination, very few women win the tournaments...Although some high- performing men drop out of the competition, many women come in, and the overall number of high- performing participants in the entry pool is barely affected.

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Legalising prostitution increases human trafficking?

Our quantitative empirical analysis for a cross- section of up to 150 countries shows that the scale effect dominates the substitution effect. On average, countries with legalized prostitution experience a larger degree of reported human trafficking inflows.

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