Johnson/Weld 2016 You In?


Anti-competitive mergers make little sense to me

There are two main arguments against mergers and acquisitions. The first of these is that they are paper shuffling with little in the way of cost advantages. The second is they allow the combined firm to raise its prices because it faces less competition.

I find these arguments to be in direct contradiction. Anti-competitive mergers must be high risk venture if there is little in the way of cost savings. Two previously efficient firm sizes are disturbed permanently in the hope of some ability to raise prices in the future without provoking too much new entry or expansion from the competitive fringe.

It is far better just to keep on colluding or just compete rather than risk permanently damaging the efficient operation of both firms.

Wellington Airport: a factual high level summary

I puzzle over the proliferation of spillover effects despite fully specified property rights for all those concerned

croaking cassandra

This morning’s Dominion-Post features a full page advert, notionally inviting people to make submissions on the resource consent application to extend the runway at Wellington Airport.

In fact, the advert is mainly an opportunity to tout the case for the hugely-expensive proposed extension –  in what must be one of the most expensive locations in the world in which one could add 300 metres to a runway (and still not comfortably meet international safety guidelines).  The pretty graphic highlights 20 Pacific Rim cities which planes could reach from Wellington –  without ever mentioning that the most likely outcome, if the project succeeds at all, is flights once or twice a week to one or two of them.

All one really needs to know about the proposal is that the owners of the airport think the project is sufficiently unattractive that there is no way they would proceed with the extension if…

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Obesity and Genetics, Ctd

Modeled Behavior

To emphasize, I do not actually believe that assortative mating is the cause of the obesity epidemic.

A major challenge to any theory, however, is that it has to operate as a multiplier. The heritability of obesity is seemingly constant. That is, what we mean when we say “Whatever is happening, its seems to be happening to all of us”

If that were not true then presumably some people would be protected not only by their genes but by their environment. In which case heritability would fall.

For example, suppose that it is fast food. Well some people may be adopted into families which don’t eat fast food. This person should have a large degree of protection that is not genetic. Yet, the data don’t bear that out. Environment has not become more important.

Suppose it was watching TV, or drinking Soda, or any of those things. Then some sort…

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The ‘hollowing’ of the American middle class