Wargaming

This article is a very interesting look at the rise and fall of wargaming. Of especial interest was:

In 1982, the 30,000 subscribers of Strategy & Tactics, SPI's flagship magazine, were the most avid wargame enthusiasts on the globe. More than 50% of them, per SPI's own feedback, owned 100 or more wargames; most of them bought a dozen or more games every year, not counting the games they received as subscribers to the magazine. SPI estimated that perhaps 250,000 people, in the whole of North America, had ever bought a wargame; and the 30,000 subscribers to S&T bought an enormously disproportionate number of the games sold.

They were the hard core, the fundament upon which the whole wargame industry was built.

So naturally, when TSR took over SPI, the first thing it did was give the finger to S&T's subscribers. The first thing it did was say to the best customers of its new subsidiary, "Go take a hike; we don't want your custom; your concerns mean nothing to us."

You see, almost every magazine in the country can declare bankruptcy tomorrow, if it wants to, because every magazine in the country has enormous liabilities: the obligation to provide issues to its subscribers. The subscription money came in long ago, and has been spent, and that liability remains. Magazines continue, and make money, because they sell advertising, and expect their subscribers to resubscribe. But SPI had no money -- and S&T had 30,000 subscribers. Over a thousand were life-time subscribers, owed issues in perpetuity in exchange for no further income.

TSR didn't want the liability. Fulfilling S&T's existing subscriptions would have cost it money.

So, TSR decided, it would not honor any subscriptions.

TSR had taken over SPI's assets, but not its liabilities, so they claimed; therefore, they had no obligation to S&T's subscribers.

Gosh. Guess what happened? Few of S&T's subscribers reupped. Few wanted to send more money to the company that had just ripped them off.

And few of them ever bought any of the wargames TSR began to publish.

And TSR never could figure out why their wargames never sold.

I think that this example is very interesting for a couple of reasons. One, the fact that this was such a large setback to the entire field makes it clear just how important barriers to entry can be in making competition difficult (it would have been infeasible to develop the network that had just been destroyed by another publisher). Two, is the market power of corporations. With their ability to raise equity, they can purchase viable business models but they do not necessarily manage them well.

For a luxury good, like wargames are , it is unfortunate for people who enjoyed them but hardly a tragedy -- other goods will have the chance to thrive in the market instead (and perhaps this is a form of creative destruction?).

But imagine this process for an essential good: like water, electricity or education. I think we should keep examples like this in mind when considering the benefits of privatization. There are massive upsides to capturing the efficiency of a functioning market -- but only if players are allowed to fail.

Funding Cuts

From Dead Dad:

Of course, that refers only to general college reserves. It’s also common for various programs to have reserves of their own, earmarked for specific purposes. The college foundation might have reserves dedicated for certain scholarship awards. Some grant-funded programs will have reserves for specific functions and only for those functions. (In the context of multiyear grants, for example, it’s common to have ‘carryover’ of excess funds from one fiscal year to the next. That’s frequently allowed, but that doesn’t give license to transfer the extra grant money to the general college budget.) In cases like those, money comes with strings attached, and violating the terms of the money involves forfeiting the money. You can’t just move it around.

This lack of flexibility actually highlights one of the difficult issues with cuts in grants. If grants are cut by 10%, you don't have the discretation to eliminate 10% of the ongoing projects to make sure that the rest are successful. In the same sense, going after indirects to try and make up these losses would lead to the defunding of other operations.

The modern university budget looks remarkably inflexible to me, which makes planning for adverse financial circumstances appear to be extremely tricky. Not only do you have to cut but what you can cut can be remarkably constrained. This can lead to very poor optics (where something that looks non-essential is fully funded whereas a core operation simply lacks funding).

It is a tough place to be in!

Education reform and the two kinds of knowledge

"Knowledge is of two kinds. We know a subject ourselves, or we know where we can find information upon it. When we enquire into any subject, the first thing we have to do is to know what books have treated of it. This leads us to look at catalogues, and at the backs of books in libraries."
— Samuel Johnson

This came up while I was working on a longer piece but I decided it deserved a short post of its own.

In the two and a half centuries since Dr. Johnson's time, the amount and the value of the second kind of knowledge has increased substantially (as it had in the preceding centuries). Cheap printing, the internet and telecommunications (consulting an expert qualifies as the second kind) have given us ready access to a stunning array of information.

With a few exceptions, the ability to find and manipulate information is far more important than the ability to simply repeat it, but the push for accountability in education often focuses strictly on the first kind.

update: You can find a related discussion here.

Someone finally notices the orphan technology

As I mentioned before, over-the-air broadcasting has been a conspicuous hole in any number of media stories, probably due to the demographics of that market and the lack of interested parties pushing the story. Eventually though, once the market included enough young, photogenic professionals, the New York Times did pick up on the story (from this Sunday):

Many pay TV customers are making the same decision. From April to September, cable and satellite companies had a net loss of about 330,000 customers. Craig Moffett, a longtime cable analyst with Sanford C. Bernstein, said the consensus of the industry executives he had talked to was that most of these so-called cord-cutters were turning to over-the-air TV. “It looks like they’re leaving for the antenna,” he said.

The article has its problems. There are factually challenged passages like this:

The new antennas do pull in more programs than your grandfather’s rabbit ears, because of new channels that broadcasters added during the transition to digital signals. The broadcasters can fit multiple digital channels into the same frequencies that used to carry one analog channel.

In St. Paul, for example, where Ms. Bayerl lives, there are extra channels from ABC and NBC with local news and weather, four public television channels and a music video channel. Big markets like Los Angeles have 40 or more channels, according to Nielsen.

(I live in LA county and, according to my digital converter I get 114 channels. There are at least a half dozen more I could get if I wanted to invest in a better antenna set-up. When you're off by a factor of three, "or more" just doesn't cut it.)

The article also completely overlooks the role that the Hispanic market plays in the over-the-air broadcasting story which is a bit like ignoring the role commuters play in the NPR audience.

Still, compared to what we've seen up till now, this account is almost cutting edge.

Update:

While picking up a printer cartridge this morning I fact-checked the following passage from the NYT story:

Modern antennas, which cost $25 to $150, pick up high-definition signals that can actually be crisper than the cable or satellite version of the same program, because the pay TV companies compress the video data.

Actually HDTV compatible antennas the one I use for my 114 channels are available at Target start at $10.98.

NIH news

From Medical Writing, Editing & Grantsmanship:

According to the AAMC, seems most likely these CRs will be the high-point of FY11:

During debate on the measure, Rep. Jerry Lewis (Calif.), the ranking Republican on the House Appropriations Committee, again expressed opposition to “any potential omnibus spending bill the Democratic leadership may be planning to bring to the House floor before the end of the year.” He also opposed extending the CR for the balance of FY 2011 at current level, which he described as “frankly, too darn high.”

I won't argue the merits or deficits of this view at the policy level except to say that, from a personal point of view, this news doesn't help my plans to start a career in this area.

Perils of studying Small Effects

From Andrew Gelman:

For example, suppose you're a sociologist interested in studying sex ratios. A quick review of the literature will tell you that the differences in %girl births, comparing race of mother, age of mother, birth order, etc, are less than 1%. So if you want to study, say, the correlation between parental beauty and sex ratio, you're gonna be expecting very small effects which you'll need very large sample sizes to find. Statistical significance has nothing to do with it: Unless you have huge samples and good measurements, you can pretty much forget about it, whether your p-value is 0.02 or 0.05 or 0.01.

I think that this is correct and ties into a larger narrative: there are a lot of small effects of great theoretical interest that are really hard to show in actual data due to the limitations of realistic sample sizes. Observational epidemiologists often try to handle this by looking at prescription claims databases (for example). But these studies create a new problem: there is a serious concern of unmeasured confounding due to factors that are not measured in these data sources (e.g. smoking, alcohol use, diet, exercise). It's not really a big step forward to replicate lack of power with potential bias due to confounding.

I think the real issue is simply that small effects are difficult to study, no matter how interesting that they are. So I think that Andrew Gelman is right to call for the interpretation of these studies to done in the context of the larger science.

Yikes!

This is pretty bad. I was surprised at just how inexpensive the organ transplant program really was . . .

Nice Observation

Matt Ygelsias makes a good point:

Today’s report, which is being called bad numbers, we learned of 50,000 new private sector jobs and the loss of 11,000 more public sector jobs.

To me, this really does seem like a bad result. But conservatives in the audience need to recognize that we’re getting what they say they want. The private sector is growing and the public sector is shrinking. If you’re disappointed in the results, you can perhaps consider reviving your view of the desirability of executing this shift in the middle of a collapse in aggregate demand. But what you can’t do is say that the bad economy is somehow being caused by an Obama-era slide toward socialism. The slide isn’t happening. The explosion in government isn’t happening. The public sector is shrinking.

The precise balance between public and private employment is tricky. But I think it is good to recognize what the actual direction of change is.

Lottery based admissions

From the Harvard Crimson:

For one thing, “excellence” in the Harvard admissions process—and at Harvard—has a lot less to do with virtuous character traits than with an ability to game the system. By placing a premium on students who go above and beyond in extracurricular realms, Harvard has attracted a number of truly incredible people but has also encouraged a high school arms race wherein kids cram their schedules with activities in an attempt to attract admissions officers.

By selecting for this kind of behavior, the admissions process doesn’t encourage real excellence, but, to use the novelist Walter Kirn’s term from his hilarious book and essay “Lost in the Meritocracy,” “aptitude for showing aptitude.” This may well be of use in students’ careers after college, but it is orthogonal if not antithetical to the goals of a liberal arts education.

I think that these factors are also an issue when you evalaute education at any level. People compete hard to get into top schools -- the same skills that they use to "game the system" also tend to ensure decent post-Harvard outcomes.

This makes evaluating the actual contribution of the education at Harvard, itself, tricky (to say the least).

h/t: Felix Salmon

More on owning preperty to vote

Commenter David made the point:

This criticism always sounds a little hollow--when people talk about interpreting the constitution 'as the framers intended', I'm pretty sure they don't mean the parts that later amendments changed.

What is difficult is that it is pretty clear from his quote that Judson Phillips really does believe this; go look. Now it could be that this is a minority view and not very typical.

But I jumped on it because this comment seemed to open a lot of issues:

But one of those was you had to be a property owner. And that makes a lot of sense, because if you’re a property owner you actually have a vested stake in the community.

So what happens if you have a mortgage on a property? Do you own it? What about a lien? How do you easily keep track of who has successfully sold their house (and thus lost the right to vote). When does this count? What if you buy a house right before election day?

Furthermore, how much property is enough? Do we value it by space? What about by value? In a country as diverse as the United States, either Wyoming or Manhattan is going to be complicated.

How would this interact with eminent domain? If the state seizes your house are you disenfranchised? Could this interact in unexpected ways with the idea of equal protection?

If you own land in city X but live (by renting) in city Y, where do you vote? What if you rent your house but own a cottage? Or a garden plot?

Finally, I wonder if the act of owning land really leads to stability given how liquid houses are. It might become more of a marker of wealth; arguing that only the wealthy should vote is a dangerous position.

So I was mostly struck by how badly this proposal seemed to be thought out and how complicated it would be to implement.

What happens if you have a mortgage?

Jon Chait talks about a new idea from Tea Party Nation:

Tea Party Nation Judson Phillips thinks the franchise should be taken away from renters

Of course, the complexities in trying to operationalize such a plan are, shall we say, staggering.

Higher education and resource allocation

It is a powerful argument to reduce the concerns of your opposition by reframing their views into something that seems absurd.

Dean Dad writes:

Administrators may be the bearers of bad news, and sometimes the people who have to choose among terrible options. But to assume that we’re sitting on piles of money, cackling with glee while exploiting adjuncts and pocketing the savings for ourselves, is just otherworldly. It assumes a context completely out of keeping with anything I can recognize as reality. It’s so far afield that the only truly fitting rebuttal is a sigh.

I think that the issue is not that anybody is sitting on piles of cash. I think that there are two legitimate concerns. One, is the redistribution of resources (which is always going to be a feature of any organization that is not experiencing enough growth for all parties to "win" simultaneously). Two, is the concern about the growth of adminsitrative costs. Some of this growth is beyond the control of the administration (unfunded federal reporting mandates come to mind). But I think that it is a fair position to want to open a dialogue on this issue.

To dismiss these concerns out of hand doesn't seem to be the best way to encourage an open dialogue.

All costs are linked

From Austin Frakt:

It’s convenient to think about health care costs and expenditure organized in two sectors, public and private. But one deceives oneself in thinking they’re independent. A principle problem with control of public health care spending is that public prices can’t deviate too far from private ones. If they do, Medicare beneficiaries will experience access problems, as Medicaid beneficiaries already do.

I think that this is entirely correct. Presuming that the same procedure is being done, it is reasonable to expect that people would prefer to be paid more. When the cost differential is low then it isn't worth putting a lot of effort into trying to attract the higher yield business. But as soon as prices deviate enough, you would expect doctors to compete on non-financial grounds. Speed of access comes immediately to mind.

I still find it odd that the United States socializes the medical care that is the most expensive (end of life care) and not that of inexpensive groups (like 20-something adults). Perhaps that is simply needed due to issues of poverty and ill health in old age. But these sorts of tensions cannot be good.

Tyler Cowen appears to agree:

The differential payment rates across Medicare, Medicaid, and private insurance are becoming unsustainable more quickly than I had anticipated; see for instance the link in #4. Further reforms will be required more quickly than had been anticipated, but it's not obvious how such reforms should proceed. It's hard to either upgrade the Medicaid (and Medicare) rates or to downgrade the private insurance rates. Monitor this one closely, because it is likely to prove the breaking point of our health care status quo, with or without the Obama plan. (This is our version of the ticking time bomb within the eurozone, namely that natural rates of growth split apart a distortion, increasingly, over time.)

I think that these arguments mean that private health care costs will move back into the debate sooner rather than later. Add in the fast growth of health insurance costs and you can immediately see that pressure is going to come from many directions.

Of course, the idea of the Bowles-Simpson Deficit Plan to tax health insurance plans would actually accelerate the tensions here by making private plans even less affordable (which could have a huge impact on the lower middle class).

It's a complicated system with a lot of moving parts. But I think economists are right to worry about these costs diverging as much as they currently are.

A point to ponder

From Worthwhile Canadian Initiative:

Indeed, this is the fatal attraction of socio-biology - it's too easy to come up with untestable explanations for just about anything.

I think that this quote is exactly right. A lot of really interesting stories can be told that are not empirically testable. This approach can lend a veneer of respectability and scientific rigor to what is merely a form of "educated guessing".

Comments on Grants

Professor in Training mentions here recent experience of good comments and yet bring triaged by a granting agency. I think that this type of triaged is at least partially a consequence of the modern funding environment. A lot of people work very hard to submit good ideas and well written grants. As paylines shrink (and the endowments of a lot of foundations shrink due to market turmoil), I suspect that many fundementally sound research proposals will suffer this fate. It no longer needs to be great, it needs to be actively exciting.

Or maybe the real comments are coded. But I think the former suggestion of limited funding has a lot of explanatory power.