Good work! I'm getting my Ph.D. in economics, and mechanism design is one of my focuses. Not sure who's behind this, but what's the goals of the auction? There's no terribly good reason raising revenue should be one of the goals since it can be raised with other forms of taxation with less distortion; as you pointed out, a good bit of the incidence of this tax is going to be pushed onto mobile internet users in the form of higher prices, which is ultimately just another regressive tax most of us can't afford, like that on gasoline (which doesn't meaningfully reduce driving).
I would hope the goals would be to get the spectrum in the hands of the entity that will put it to its highest and best use for societal welfare. Profitability is some measure of this, and so the highest bidder may ultimately be the one able to create the most value, but making them pay as much as possible for the spectrum just ensures they will need to capture as much of that value for themselves as possible to pay for their bid.
I'm not sure about the technical details regarding spectrum and bandwidth in this case, but some kind of required-investment bidding would be a better approach. I believe that the theoretical max bandwidth is a function of type and width of spectrum (65 MHz of electromagnetic), but there's plenty of gains from capital investment to be had regarding hardware to run the networks and probably from signal optimization, depending on how they allocate their MHz across sections/channels (e.g. minimizing noise and interference, maybe some kind of dynamic/automatically re-sizing of spectrum divisions based on bandwidth needs of each section at any given time, etc). Bidding in $ of capital investment would be a decent approach since they have some motivation to make those $'s go as far as possible, but having some projected return on investment with respect to consumer experience would be nice. Unfortunately, that gives incentive to exaggerate one's efficiency, corrupting the usefulness of all such projections in the bid, and the projections themselves are hard enough to create that you'd be hard pressed to prove any misleading conduct beyond standard corporate optimism if they fall short.
Seriously, though, who the hell designed this auction, and why did they not consider any of these standard questions any auction designer worth her salt would have started with from the get go? Makes me more curious where the money from the bids will ultimately end up, since corruption is the only strong reason (I don't buy gov incompetence here).
Here here!! I'm working on my Ph.D. in economics with a non-market focuses, such as political economy. The sad fact is that even if government representatives are actually trying to do what's best for their constituents, they'll still do things that are harmful to most people to help the few who actively support them, meaning legislation on average is expected to be harmful. But it gets worse! because this type of legislation is difficult to get through congress unilaterally, legislators trade votes all the fucking time to get their bad policy passed in exchange for helping other bad policy pass. And this is assumes good-intentioned legislators who can be trusted to do their job as specified by the Constitution!
It's not that I don't think problems can be solved in a centralized manner. I don't even necessarily think the private market necessarily are more efficient when solving them. It's just that I don't trust any piece of policy that's gone through the legislative gauntlet of nearly 550 self-interested powerful individuals with almost no real accountability. It's binding legal language: they can literally change a few words to transform good policy into a legal means to rob us of billions of tax dollars often with ancillary consequences to boot. What's the chances the benefits of anything will outweigh its costs by the time it comes out of Congress? We're perfectly capable of taking care of ourselves and each other: deadlock sounds just fine to me; disempowerment sounds even better.
I'm getting my Ph.D. in behavioral and institutional economics, so this is right up my ally. Carr's response, that "defining social relations as a pattern of stimulus and response makes the math easier" but misses the deeper structure is dead on, but it's more than this. Social norms may determine much of our behavioral responses, but norms vary tremendously by the institution from which they come: how your group of friends prefer to treat each other != how other's prefer to treat each other != how strangers are "supposed" to treat each other in NYC != out strangers are supposed to treat each other in a small town. Moreover, while these norms may be highly correlated with your behavioral responses, people select into institutions (friend circles, communities, neighborhoods, etc) to a large degree based off their compatibility with the institutions norms; e.g. think about outcomes of social group formation, from mostly scratch, freshman year of college.
This all matters for the article's context because the behavioral parameters they estimate only approximate social norm's suggested behavior, but the suggestions ultimately come from those who chose to adhere to that particular set of norms; trying to "tune" people in ways they don't intrinsically want will fail because they'll just reselect or simply ignore the competing suggestions in favor of those authentic to the group into which they selected. If they take into account that all norms are highly idiosyncratic to their parent institution, it may help with better targeting of products, programs, and information, but the targeting will still have to be revised as people revise their norms; an institution will not revise its norms to conform to what an outside entity feels they should be. So, yeah, I don't think catering to the current observed state of the world can keep norms and society from evolving any more than, say, de jure segregation laws catering to status quo racists/-ism can keep people from forming revising their views about the morality of racism, the laws surrounding it, and their behavioral responses to such societal "tuning", especially over years and generations.
Here's links to some of my music:
Feel free to drop me a line at seepage87 at the gmail
I haven't posted here in years, partly because I've been too focused on my music career.
First off (-topic), fuck Cubase, Ableton is waaaay better and just as easily pirated. And while on the subject of piracy, musicians spend more money on music (shows, instruments, hardware, etc) than anyone else, all while actively giving back to the music community by producing art; if they pirate music software, I say good as long as they can't afford it, because it at least allows them to create their art, which is good for everybody. I haven't paid for my copy of Ableton yet, but I definitely plan on it once I can.
Now regarding primary points of the article. Say what you want, but making beautiful expressive music is extremely difficult in a digital environment. Sure you can correct your mistakes, layer a dozen parts by yourself, and accomplish musical feats with the press of a button that, e.g., concert pianists might spend their whole life practicing to achieve, but none of that has to do with the artistic side of music. What the author really means is that humans no longer have to spend years practicing fine muscle coordination to be able to create complex music, but that doesn't free the musician of the burden of turning sound into art with real expression behind it.
This is why a lot of electronic music sounds stale and repetitive. If you don't know, there exist "construction kits" which allow me to create, e.g., an above average trap song in about an hour (including mastering). A lot of people do this, but a lot fewer go--or even know to go---to the trouble of creating real expressive content so that the music is not only aurally pleasing and cerebrally interesting, but also emotionally evocative. Evocativeness used to be a given in music, but these days it has to be sought out. That said, all the best producers reliably achieve it, even in the digital space, which can add challenges since expression is fundamentally an analog creature.
What's true is there's a lot more noise around the signal. This can make it a lot harder for good musicians to succeed, but most of the doom-and-gloom perspective comes from the masses of shitty musicians who've entered the market now that the barriers to entry are lowered: Talent still rises to the top, but all these n00bs who create digitally perfect tracks that sound like music are whining en mass that no one listens to their songs and that it must the system's fault because their tracks sound good. People don't listen to music because it "sounds good", they listen to it because it's art, i.e. it has content and is moving. Everything else is just icing on the cake, but who wants to eat just icing all the time.
I don't need to be a rock star to be a satisfied musician. That said, if you don't believe there exist rock stars and legends these days, clearly you've never been to a Bassnectar concert or are otherwise not paying attention.
In case you're interested:
And if you're in the Denver area, we're playing at Cervantes on Sept 29th.
This assumes he can sell it for that much right away. If he holds the property until it goes back up to $2000, then profits is a misleading metric. IRR would be better, but that decreases as the length of the investment increases, like if he needs to wait to sell the place, so things don't look as good as you might think.
Of course while he's waiting he gets to collect rent, so that will help a bit. But he also has to pay to maintain the building, pay interest on the loan (which will carry a high rate because banks aren't giving loans easily right now, especially with only 10% down). Don't forget insurance. And, of course, if any of your tenants can't pay rent, or they move, then you'll lose at least 1 month rent from them and have to go through the process of getting a new tenant, which may prove difficult if you want to get as much as the last person paid, a monthly rate that was set pre-recession. Oh, and don't forget taxes, and not just the taxes on your rental income, but also property taxes which are based on property value and may have an assessed value a great deal higher than you purchased the property for. Point: there's a reason these buildings are so cheap.
Free streaming services are clearly not net positive for the industry
Blows my mind when they say things like that, it contains implicit assumptions about what "the industry" is. E.g., many indie labels are gaining significantly more exposure as a result of sites like last.fm. I'll agree that it's not net positive for Warner.
But this is a Good thing. Sure, producer surplus (profit) for the most major players has decrease somewhat, but consumer surplus (total benefit minus cost) has increased tremendously as we can now get tons of music for very cheap. But this is what happens when monopolies fall, they have to drop prices in order to compete and we are the beneficiaries. Who cares about Warner, people will always be making music, probably more now than ever since we're able to be exposed to so much more and culture begets culture. And now we have the tools to distribute that music without the big media companies.
FORTUNE'S FUN FACTS TO KNOW AND TELL: A firefly is not a fly, but a beetle.