Wednesday, March 29, 2006

Science: the next 100 years


"in the next 100 years in science...

1) There will be more change in the next 50 years of science than in the last 400 years.
2) This will be a century of biology. It is the domain with the most scientists, the most new results, the most economic value, the most ethical importance, and the most to learn.
3) Computers will keep leading to new ways of science. Information is growing by 66% per year while physical production grows by only 7% per year. The data volume is growing to such levels of 'zillionics' that we can expect science to compile vast combinatorial libraries, to run combinatorial sweeps through possibility space (as Stephen Wolfram has done with cellular automata), and to run multiple competing hypotheses in a matrix. Deep realtime simulations and hypothesis search will drive data collection in the real world.
4) New ways of knowing will emerge. 'Wikiscience' is leading to perpetually refined papers with a thousand authors. Distributed instrumentation and experiment, thanks to miniscule transaction cost, will yield smart-mob, hive-mind science operating 'fast, cheap, & out of control.' Negative results will have positive value (there is already a 'Journal of Negative Results in Biomedicine'). Triple-blind experiments will emerge through massive non-invasive statistical data collection--- no one, not the subjects or the experimenters, will realize an experiment was going on until later.
5) Science will create new levels of meaning. The Internet already is made of one quintillion transistors, a trillion links, a million emails per second, 20 exabytes of memory. It is approaching the level of the human brain and is doubling every year, while the brain is not. It is all becoming effectively one machine. And we are the machine."

...Our moral obligation is to generate possibilities, to discover the infinite ways, however complex and high-dimension, to play the infinite game. It will take all possible species of intelligence in order for the universe to understand itself. Science, in this way, is holy. It is a divine trip." makes one wonder, right?

GMU - Daring to be different

I really don't care much about sports.  But as it turns out, my school--George Mason University--just made it to the final four on the NCAA.  That brings more attention to my rather medium-sized university than the two Nobel laureates in its economics faculty.  One good thing is that GMU graduates get to benefit from such positive externalities regardless of their academic or sports origin. 
As time goes by and I meet differnet sorts of scholars, I get to value what I learned in GMU more and more--so yes, I am happy too.  My former teachers are excited and wrote this little sidebar on why GMU succeeds in academia as well:
At GMU we practice Entrepeneurial Economics and we still think there are unexploited profits and oddball geniuses to be found. You can't get much stranger or more brilliant than Robin Hanson, one of the architects of the Defense Department's short-lived "terror futures market." Betting markets are now used to forecast elections and they are starting to gain a foothold in the corporate world. Hanson wants to go further and have policies decided by contests in betting markets. (He calls it "futarchy.") He also has contracted to have his head frozen upon his "death," and has good arguments for why this makes sense at market probabilities and prices. 

Larry Iannaccone's field of expertise is religion. Larry asks, Is a free market in religion good for religion? Kevin McCabe and his co-authors have the first published paper about running brain scans on people while they make economic decisions. Neuroeconomics, as it is called, is now a major trend in the profession. How many economists are as comfortable talking about Michel Foucault, James Joyce, or Cuban artist Tomas Sanchez as they are about Milton Friedman? Tyler Cowen is, and in a series of books—the latest being Good and Plenty: The Creative Successes of American Arts Funding—Cowen has challenged economists to think about art and culture—and aesthetes to think about economics. Other economists at GMU are pushing the boundaries of development economics, studying the politics of rational irrationality, and redesigning electricity markets.

The outsider status of both the GMU economics department and the basketball team contributes to their styles of play. We like to have fun, which is one reason that GMU is well-known outside of academia. Marginal Revolution, Tyler Cowen and Alex Tabarrok's daily blog, is a widely read source of economic insights. Other faculty blogs include Café Hayek, The Austrian Economists, and EconLog. In old school media, Walter Williams is a nationally syndicated columnist and well-known radio personality and Russ Roberts is the author of an economic romance novel (really!).

Wednesday, March 22, 2006

Bribery at the United Nations

This is what I call really interesting evidence... did Mexico get its "fair share"  when we were in the Security Council? (bullets are mine)

How Much is a Seat on the Security Council Worth? Foreign Aid and
Bribery at the United Nations


  • Ten of the fifteen seats on the U.N. Security Council are held by rotating members serving two-year terms. Using country-level panel data, we find that a country’s foreign aid receipts rise substantially when it is elected to the Security Council: on average, U.S. aid increases by 54 percent and U.N. development aid rises by 7 percent.
  • We find that the positive effect of Security Council membership on aid is much greater during years in which key diplomatic events take place, when members’ votes are likely to be especially valuable.
  • Further, the increase in aid is shown to begin the year a country is elected to the council and to disappear after its membership ends.
  • We find evidence that the effect of council membership on U.S. aid is especially large for dictatorships and U.S. allies, suggesting that the United States seeks to form alliances with the council members who are cheapest to bribe.
  • Finally, the connection between U.N. aid and council membership seems to be driven by UNICEF, an aid organization over which the United States has historically exerted much control.

Tuesday, March 21, 2006

Private water saves lives? Yes.

The World Water Forum is coming to an end. Another useless multi-country statement. Thousands of additional frequent flyer miles on globaliphobe crowds, and certainly hundreds of new pages in their "protest diaries".

True premise: Lack of good quality water kills you and your babies.
Passionate conclusion: What kind of person would you be if you oppose water as a human right--ie, code word for "entitlement"?

Econ 101 premise: If you don't charge for the use of goods and services, people will overuse and misuse water--and nobody would be interested in the business of water provision. Well, except the business of drinking water on fancy bottles for ultra-conscious minds who happen to be not-poor.
Common sense conclusion: Maybe privatizing (or something similar to it) water could help expand water provision, and ultimately save lives... including poor babies lives?

"No way! That is just a blackboard dream from a close-minded neoliberal". Ummm, wait... can we look at the evidence before you continue protesting?

Water for Life: The Impact of the Privatization of Water Services on Child Mortality

Journal of Political Economy, Vol. 113, pp. 83-120, February 2005

Abstract: While most countries are committed to increasing access to safe water and thereby reducing child mortality, there is little consensus on how to actually improve water services. One important proposal under discussion is whether to privatize water provision. In the 1990s Argentina embarked on one of the largest privatization campaigns in the world, including the privatization of local water companies covering approximately 30 percent of the country's municipalities. Using the variation in ownership of water provision across time and space generated by the privatization process, we find that child mortality fell 8 percent in the areas that privatized their water services and that the effect was largest (26 percent) in the poorest areas. We check the robustness of these estimates using cause-specific mortality. While privatization is associated with significant reductions in deaths from infectious and parasitic diseases, it is uncorrelated with deaths from causes unrelated to water conditions.

Monday, March 20, 2006

Institutions matter -- evidence #2712

We need more columnists like Tim Hartford and less like __________ (I'll let you fill in the blank with your favorite pundit).

Why Poor Countries Are Poor
The clues lie on a bumpy road leading to the world’s worst library.

Does Development Have a Chance?

Development specialists often focus on helping poor countries become richer by improving primary education and infrastructure such as roads and telephones. That’s surely sensible. Unfortunately, it’s only a small part of the problem. Economists who have pulled apart the statistics, or studied unusual data such as the earnings of Cameroonians in Cameroon and the earnings of Cameroonians who immigrate to the United States, have found that education, infrastructure, and factories only begin to explain the gap between rich and poor. Because of its lousy education system, Cameroon is perhaps twice as poor as it could be. Because of its terrible infrastructure, it’s roughly twice as poor again. So we would expect Cameroon to be four times poorer than the United States. But it is 50 times poorer.

More important, why can’t the Cameroonian people seem to do anything about it? Couldn’t Cameroonian communities improve their schools? Wouldn’t the benefits easily outweigh the costs? Couldn’t Cameroonian businessmen build factories, license technology, seek foreign partners, and make a fortune?

Evidently not. Mancur Olson showed that kleptocracy at the top stunts the growth of poor countries. Having a thief for president doesn’t necessarily spell doom; the president might prefer to boost the economy and then take a slice of a bigger pie. But in general, looting will be widespread either because the dictator is not confident of his tenure or because he needs to allow others to steal in order to keep their support.

The rot starts with government, but it afflicts the entire society. There’s no point investing in a business because the government will not protect you against thieves. (So you might as well become a thief yourself.) There’s no point in paying your phone bill because no court can make you pay. (So there’s no point being a phone company.) There’s no point setting up an import business because the customs officers will be the ones to benefit. (So the customs office is underfunded and looks even harder for bribes.) There’s no point getting an education because jobs are not handed out on merit. (And in any case, you can’t borrow money for school fees because the bank can’t collect on the loan.)

It is not news that corruption and perverse incentives matter. But perhaps it is news that the problem of twisted rules and institutions explains not just a little bit of the gap between Cameroon and rich countries but almost all of the gap. Countries like Cameroon fall far below their potential even considering their poor infrastructure, low investment, and minimal education. Worse, the web of corruption foils every effort to improve the infrastructure, attract investment, and raise educational standards.

We still don’t have a good word to describe what is missing in Cameroon and in poor countries across the world. But we are starting to understand what it is. Some people call it “social capital,” or maybe “trust.” Others call it “the rule of law,” or “institutions.” But these are just labels. The problem is that Cameroon, like other poor countries, is a topsy-turvy place where it’s in most people’s interest to take actions that directly or indirectly damage everyone else. The incentives to create wealth are turned on their heads like the roof of the school library.

Tim Harford, a columnist for the Financial Times, is the author of The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor—and Why You Can Never Buy a Decent Used Car! (Oxford University Press)

Saturday, March 18, 2006

The Selfish Gene 30th anniversary

It's Richard Dawkins'--The selfish-gene-- 30th anniversary. For economists, being selfish is just as human as being able to communicate or trade. Lots of people (including social scientists) get passionate about how selfishness is the root evil of mankind. Lots of people (including highly educated people) get confused into thinking that "changing human nature from selfish to altruistic" is not only possible, but a worthwhile solution to mankind's problems.

Being obnoxiously normative (hey, aren't we all?), I would recommend two simple things to them: you should read Dawkins and then take a good introductory economics class.

But wouldn't life be miserable and purpose-less if we are nothing but a bunch of cells accidentaly put together by self-selection in a god-less world? Dawkins replies:

"Presumably there is indeed no purpose in the ultimate fate of the cosmos, but do any of us really tie our life's hopes to the ultimate fate of the cosmos anyway? Of course we don't; not if we are sane. Our lives are ruled by all sorts of closer, warmer, human ambitions and perceptions. To accuse science of robbing life of the warmth that makes it worth living is so preposterously mistaken, so diametrically opposite to my own feelings and those of most working scientists, I am almost driven to the despair of which I am wrongly suspected."

Friday, March 17, 2006

Getting into a top economics Ph.D.

Los comentarios a esta divertida especulación pueden ser de gran utilidad los estudiantes avanzados de economía...
Could Steve Levitt get into a top Ph.d. program today?
Posted by Tyler Cowen

Read the debate.  Steve says U. Chicago would nix him for lack of undergraduate mathematics classes.  He believes that Harvard or MIT "might still take a chance on me today." 

I am a strong believer in having at least one top school -- Chicago once played this role -- which accepts virtually everybody and lets competition sort them out in brutal fashion.  I am also a strong believer in having more graduate students at top schools know economic history than real analysis.  I don't expect either of these wishes to come true anytime soon.

Esta es la respuesta de Levitt:

"I think the answer is that MIT and/or Harvard might still take a chance on me today, but not the other top places including the University of Chicago. At U of C, my application would be thrown out before ever getting to a faculty member, just as would have been the case 15 years ago.

I am lucky that MIT was willing to roll the dice."

Wednesday, March 15, 2006

EDOMEX: All politics is local politics

¿Quién ganó y quién perdió en el EdoMex?
Como todas las cosas, depende de cómo medimos el éxito y contra qué punto de referencia lo comparamos.  Un par de horas consolidando datos del IEEM permiten una lluvia de cifras interesante.
  • En votos totales, el PAN perdió más votos, comparado con los votos obtenidos en 2003.  Medido en porcentaje pasa lo mismo.  Sin embargo, el PAN consiguió 3 ayuntamientos adicionales. Con todo, el principal daño para el PAN es el impacto en el resto de las campañas de los encabezados que rezan: "PAN es tercera fuerza en el Estado de México".  La consolación del PAN es que gobierna municipios urbanos altamente poblados: 32% del padrón con sólo 26% de los votos.
  • Por otro lado, aún sin haber perdido muchos votos ni mucho porcentaje, el PRI perdió 23 ayuntamientos respecto a 2003.  Y si comparamos la votación para gobernador vs. la votación municipal total de 2006, el PRI dejó de obtener más de 600 mil votos.  La maquinaria local del PRI parece desvanecerse: con 34% de los votos sólo gobierna al 24% de la población empadronada.
  • El PRD obtuvo el mayor aumento en votos y en porcentaje entre 2003 y 2006, además de conseguir 14 ayuntamientos adicionales.  El impacto de sus votos no es menor: con 30% de los votos consiguió gobernar ahora 43% del padrón estatal. 
  • Cabe destacar que la gran mayoría de los ayuntamientos que perdió el PRI pasaron al PRD--lo cual tiene un significado muy relevante: conforme el voto del PRI se desploma, el PRD consigue más votos y más victorias.  Si esto ocurriese en la elección federal, Madrazo acabaría haciéndole un favor a AMLO.
Elecciones en el Estado de México
Resultados recientes, 2000 - 2006
Votos para Presidente 2000 y Gobernador 2005
Presidencial 2000 2,239,750 1,637,714 961,876 5,124,572
  43.7% 32.0% 18.8%  
Gobernador 2006 936,615 1,801,530 918,347 3,786,929
24.7% 47.6% 24.3%
Votos en Elecciones Municipales, 2000-2006
  PAN PRI PRD Votos Totales
2000 1,835,965 1,623,997 974,441 4,831,002
2003 990,187 1,187,596 834,673 3,468,254
2006 919,971 1,186,326 1,058,259 3,520,531
Votos en Elecciones Municipales, 2000-2006 (porcentajes)
2000 38.0% 33.6% 20.2%
2003 28.6% 34.2% 24.1%
2006 26.1% 33.7% 30.1%
Número de municipios ganados, 2000-2006
2000 30 69 21 1
2003 25 76 24
2006 28 53 38 5 3
Población Gobernada (% de lista nominal)
2006 32.7% 23.7% 43.0% 0.9% 0.5%
Lista Nominal          8,533,881

Monday, March 13, 2006

Untestable beliefs

Here are two excerpts from a new book on my wish-list:
What We Believe but Cannot Prove: What We Believe but Cannot Prove:
Today's Leading Thinkers on Science in the Age of Certainty
Also, listen to the NPR presentation here:

Martin Rees

Sir Martin Rees is a professor of cosmology and astrophysics and the master of Trinity College at the University of Cambridge. He holds the honorary title of Astronomer Royal and is also a visiting professor at Imperial College London and Leicester University. He is the author of several books, including Just Six Numbers, Our Cosmic Habitat, and Our Final Hour.

I believe that intelligent life may presently be unique to our Earth but has the potential to spread throughout the galaxy and beyond it -- indeed, the emergence of complexity could be near its beginning. If the searches conducted by SETI (the Search for Extra-Terrestrial Intelligence) continue to come up with nothing, that would not render life a cosmic sideshow; indeed, it would be a boost to our self-esteem. Terrestrial life and its fate would be seen as a matter of cosmic significance. Even if intelligence is now unique to Earth, there's enough time ahead for it to permeate at least this galaxy and evolve into a teeming complexity far beyond what we can conceive.

There's an unthinking tendency to imagine that humans will be around in 6 billion years to watch the sun flare up and die. But the forms of life and intelligence that have by then emerged will surely be as different from us as we are from a bacterium. That conclusion would follow even if future evolution proceeded at the rate at which new species have emerged over the past 3.5 or 4 billion years. But posthuman evolution (whether of organic species or artifacts) will proceed far faster than the changes that led to human emergence, because it will be intelligently directed rather than the gradual outcome of Darwinian natural selection. Changes will drastically accelerate in the present century -- through intentional genetic modifications, targeted drugs, perhaps even silicon implants in the brain. Humanity may not persist as a single species for longer than a few more centuries, especially if communities have by then become established away from Earth.

But a few centuries is still just a millionth of the sun's future lifetime -- and the universe probably has a much longer future. The remote future is squarely in the realm of science fiction. Advanced intelligences billions of years hence might even create new universes. Perhaps they'll be able to choose what physical laws prevail in their creations. Perhaps these beings could achieve the computational ability to simulate a universe as complex as the one we perceive ourselves to be in.

My belief may remain unprovable for billions of years. It could be falsified sooner -- for instance, we or our immediate posthuman descendants may develop theories that reveal inherent limits to complexity. But it's a substitute for religious belief, and I hope it's true.

Ray Kurzweil

Ray Kurzweil is an inventor, entrepreneur, and principal developer of (among a host of other inventions) the first print-to-speech reading machine for the blind, the first text-to-speech synthesizer, the first CCD flat-bed scanner, and the first commercially marketed large-vocabulary speech recognition system. Recipient of the National Medal of Technology among many other honors, he is the author of several books, including The Singularity Is Near: When Humans Transcend Biology.

We will find ways to circumvent the speed of light as a limit on the communication of information.

We are expanding our computers and communication systems both inwardly and outwardly. Our chips' features are ever smaller, while we deploy increasing amounts of matter and energy for computation and communication. (For example, we're making a larger number of chips each year.) In one or two decades, we will progress from two-dimensional chips to three-dimensional self-organizing circuits built out of molecules. Ultimately we will approach the limits of matter and energy to support computation and communication.

As we approach an asymptote in our ability to expand inwardly (that is, using finer features), computation will continue to expand outwardly, using materials readily available on Earth, such as carbon. But we will eventually reach the limits of our planet's resources and will expand outwardly to the rest of the solar system and beyond.

How quickly will we be able to do this? We could send tiny self-replicating robots at close to the speed of light, along with electromagnetic transmissions containing the needed software. These nanobots could then colonize faraway planets.

At this point, we run up against a seemingly intractable limit: the speed of light. Although a billion feet per second may seem fast, the universe extends over such vast distances that this appears to represent a fundamental limit on how quickly an advanced civilization (such as we hope to become) can spread its influence.

There are suggestions, however, that this limit is not as immutable as it may appear. Physicists Steve Lamoreaux and Justin Torgerson of the Los Alamos National Laboratory have analyzed data from an old natural nuclear reactor that 2 billion years ago produced a fission reaction lasting several hundred thousand years in what is now West Africa. Analyzing radioactive isotopes left over from the reactor and comparing them with isotopes from similar nuclear reactions today, they determined that the physics constant a (alpha, also called the fine structure constant), which determines the strength of the electromagnetic force, apparently has changed since 2 billion years ago. The speed of light is inversely proportional to a, and both have been considered unchangeable constants. Alpha appears to have decreased by 4.5 parts out of 108. If confirmed, this would imply that the speed of light has increased. There are other studies with similar suggestions, and there is a tabletop experiment now under way at Cambridge University to test our ability to engineer a small change in the speed of light.

Of course, these results will need to be carefully verified. If they are true, it may hold great importance for the future of our civilization. If the speed of light has increased, it has presumably done so not just because of the passage of time but because certain conditions have changed. . . .

The foregoing is excerpted from What We Believe but Cannot Prove by John Brockman. All rights reserved.


Saturday, March 11, 2006

(Ir)rational models for (ir)rational people

More by training than for any sense of conviction, I belong to the rat choice and quant camp. My training as an economist gave me a set of analytical tools, which I use as often as I can to make sense of the world. A lot of things remain beyond the grasp of those tools--but they are helpful tools on any case.

Every now and then I face four kinds of charges--actually, so often that I almost have instant replies. Let's see:

1. They (we) are irrational! Your ratchoice models are useless because people are not/not always/not very rational.

Granted, for every definition of rationality you have one can find 100 people behaving irrationally. My preferred definition of rationality implies either cost-minimizing or consistent (ie, transitive) behavior or both. But the strength of the rationality assumption and that of ratchoice theories is a matter of a) degree and b) consistency.

Degree: As long as people behave relatively more in cost-minimizing ways than in haphazard ways, rat choice models will be useful to explain such behavior. Consistency: even if we admit/assume that people are irrational, any decent explanation of such behavior has to be consistent/logic/rational. If not, how could you distinguish between an "irrational theory" of any behavior and a "bogus/just-so" story about that same behavior?

Actually, a favorite hobby of mine is to read or listen supposedly anti-rat choice people offer their theories and evidence, and then try to find the devilish little ratchoice model implicit in their argumentation... and guess what, it is always there more often than you (or they) think.

The typical shape of the anti-rat choice argument goes like this: "well, ratchoice theory A predicts outcome Y1... but as it turns out outcome Y2 ocurred, why? Because silly-theory A neglected the role of key missing/unobservable variable X. Once you consider my theory, which includes a subjective/qualitative valuation of variable X, it is obvious that outcome Y2 had to occur..." What this line of argument forgets to mention is that "ratchoice theory A + mysterious variable X" (call it theory A') still is (or can be construed as) a ratchoice theory.

I am NOT saying that any theory is a ratchoice theory, just that a lot of supposedly non-ratchoice theories are actually pretty close to ratchoice theories--with different keywords and no equations. The fear of using mathematical or even functional language to make theoretical arguments is dumbfounded: math is just another language, a strict and picky one indeed. Some arguments are easier to make with math and some others with prose... but they are not mutually excludable. Ok, there is an exception: it is easier to spot logical inconsistencies in a simple math model than in a 100 page narrative.

An extreme version is harder to tackle: "See, people are irrational, hence the world is unpredictable. Want evidence? Just look how Y1 happens sometimes while Y2 also happens other times! I am telling you those ratchoice empiricists know nothing!" The most extreme case: "Why are you so deterministic? Why do you want to explain anything at all to begin with?" I have not figured out a reply to any of these...

These are the other three typical charges:

1) It's a qualitative-world! Your quantitative methods are useless because not everything is measurable nor observable.
Quick reply: Granted, everything is up for grabs in the quali-land. But why should I give more credit to your subjective interpretation of the world than the one you give to my subjective choice of variables to measure it?

3) Nothing new! Ok, you measured something but you are only proving something that "everybody knew already".
Quick reply: I am pleased that my findings corroborate your priors, and I hope you update them accordingly. By the way, did you have an estimate of the magnitude of this impact in this particular context too? Did you know the particular cases where this correlation does/does not hold? I didn't before, but I do now.

4) No causality! Ok, you found a significant correlation but you have not demonstrated causality.
Quick reply: Stats will never prove causality--that is not its job. Sensible theory + evidence based on decent research design = closer to causality. What is your rival theory? What kind of evidence would you like to see to convince you? Is that evidence feasible at reasonable cost? Do you apply those same standards to your own work?

More later.

Friday, March 03, 2006

Caveat Emptor and Ghosts

Among the many things I learned over the weekend, this is a gem: What happens if you buy a Victorian House and it happens to be haunted?  Can you get equitable relief from the seller?  Yes, if in New York...

Jeffrey M. Stambovsky, Appellant,


Helen V. Ackley et al., Respondents.


Supreme Court, Appellate Division, First Department, New York


July 18, 1991


 Appeal from a judgment of the Supreme Court (Edward H. Lehner, J.), entered April 9, 1990 in New York County, which dismissed the complaint pursuant to CPLR 3211 (a) (7).



 Equity--Rescission--Contract to Purchase House Reputed to be Haunted--Estoppel to Deny House is Haunted--Inability to Learn of Condition of House Prior to Executing Contract

 (1) In an action seeking rescission of a contract to purchase a house widely reputed to be possessed by poltergeists, a grant of equitable relief is warranted where the buyer, not a "local" and unfamiliar with the local folklore, could not readily have learned that the home he had contracted to purchase was haunted. Whether the source of the spectral apparitions seen by defendant seller is parapsychic or psychogenic, having reported their presence in both a national publication and the local press, defendant is estopped to deny their existence and, as a matter of law, the house is haunted. It was defendant's promotional efforts in publicizing her close encounters with the spirits which fostered the home's reputation in the community, and the impact of that reputation goes to the very essence of the bargain between the parties, greatly impairing both the value of the property and its potential for resale. Moreover, the extent of that impairment may be presumed on a motion to dismiss and represents merely an issue of fact for resolution at trial.


 Fraud--Factual Misrepresentation--Duty of Real Estate Broker to Disclose to Buyer That House is Reputed to be Haunted

 (2) A real estate broker, as agent for the seller, is under no duty to disclose to a potential buyer that the premises in question has a reputation for being haunted, and a buyer may not pursue a legal remedy for fraudulent misrepresentation against the seller on the grounds that the premises is haunted. New York law fails to recognize any remedy for damages incurred as a result of the seller's mere silence, applying instead the strict rule of caveat emptor.


 Equity--Rescission--Contract to Purchase House Reputed to be Haunted--Inability to Determine if Premises is Haunted upon Reasonable Inspection

 (3) In an action seeking rescission of a contract to purchase a house widely reputed to be haunted, a grant of equitable relief may be warranted since a haunting is a condition which cannot be ascertained upon a reasonable inspection of the premises. For the purposes of the instant motion to dismiss pursuant to CPLR 3211 (a) (7), plaintiff purchaser is entitled to every favorable inference which may reasonably be drawn from the pleadings, viz., that he met his obligation to inspect the premises and search the title, and, therefore, there is no sound policy reason to deny plaintiff relief for failing to discover a state of affairs which the most prudent purchaser would not be expected even to contemplate, defendant being estopped from denying that the house is haunted.


 Equity--Rescission--Contract for Sale of Real Property--Merger Clause--House Reputed to be Haunted

 (4) In an action seeking rescission of a contract to purchase a house widely reputed to be haunted, nondisclosure of that reputation constitutes a basis for relief as a matter of equity where the condition was created by the seller, it materially impairs the value of the contract, and it is peculiarly within the knowledge of the seller or is unlikely to be discovered by a prudent purchaser. The merger or "as is" clause in the contract does not bar recovery since even an express disclaimer will not be given effect where the facts are peculiarly within the knowledge of the party invoking it. Moreover, a fair reading of the clause reveals that it expressly disclaims only representations made with respect to the physical condition of the premises and, thus, its effect does not extend to paranormal phenomena; should the contractual language be construed as broadly as defendant seller urges to encompass the presence of poltergeists in the house, it cannot then be said that she has delivered the premises "vacant" in accordance with her obligation thereunder.

Wednesday, March 01, 2006

Bribe menus and nonlinear pricing

...Apparently, this legislator was so good at policymaking that he knew about the economic efficiency of non-linear pricing:

"Prosecutors call it a corruption case with no parallel in the long history of the U.S. Congress. And it keeps getting worse. Convicted Rep. Randall "Duke" Cunningham actually priced the illegal services he provided

Prices came in the form of a "bribe menu" that detailed how much it would cost contractors to essentially order multimillion-dollar government contracts, according to documents submitted by federal prosecutors for Cunningham's sentencing hearing this Friday.

"The length, breadth and depth of Cunningham's crimes," the sentencing memorandum states, "are unprecedented for a sitting member of Congress."

The sentencing memorandum includes the California Republican's "bribery menu" on one of his congressional note cards, "starkly framed" under the seal of the United States Congress.

The card shows an escalating scale for bribes, starting at $140,000 and a luxury yacht for a $16 million Defense Department contract. Each additional $1 million in contract value required a $50,000 bribe.

The rate dropped to $25,000 per additional million once the contract went above $20 million."