The Answer Is Transaction Costs

Professor Lynn Kiesling discusses Distributed Energy Resources (DERs), transaction costs, the digital transformation of the electricity industry, institutional structure of production within firms, complex regulatory frameworks, impact of digitization on the electric system, role of batteries in the grid, and deferred payment plan in Shohei Otani's contract.

Special guest John Pelson, author of Wireless Wars and former corporate executive in wireless tech, explores 5G, Huawei, and global trade dynamics. From the intricacies of switching technology to the transformative impact of 5G, we discuss its potential in multiple industries. We also delve into national security concerns, the role of transaction costs, and the challenges of AI-enabled content manipulation.

Adam Thierer, senior fellow at the R Street Institute, explores permissionless innovation and its impact on society. The podcast discusses cultural attitudes towards innovation, obstacles faced by permissionless innovation throughout history, the importance of trial and error, talent migration and capital investment in innovation, the concept of intransitive preferences, and the benefits of transaction costs in protecting people.

In this podcast, the host and guest discuss the transformative potential of blockchain and Ethereum, touching on topics such as Ethereum's potential as a geopolitical tool, the enticing prospects of stablecoins, and the world of privacy technologies. They also explore the economic benefits of pseudonymity and the potential regulatory response. Plus, the podcast includes four economics jokes and letters from listeners discussing transaction costs, space flight projects, and book recommendations.

Exploring the intersections of Effective Altruism with utilitarianism and transaction costs, balancing big ideas and practical implementation, Adam Smith's theory of moral sentiments, the impact of EA in reducing transaction costs, efficient charity options, and a teaser for the next episode on transaction costs in cryptocurrency and the blockchain.

The podcast discusses the motives and morals of taxes, including fairness and raising revenue. It explores transaction costs in taxes and the wealth-poverty debate, mentioning 'The Price Is Right' as a metaphor. The power of prices ending in 99 is also explored, along with the psychological reasoning behind it. Additionally, Peter Singer's argument and transaction costs are discussed.

Exploring the concept of transaction costs and its influence on pricing and packaging policies in the restaurant industry. Discussion on pricing options for salad and food bars, including all-you-can-eat buffets by the ounce and the challenges they present. The process of valuing food inventory in a buffet-style restaurant and the benefits of pricing by the ounce. Comparison of cost savings of pricing by the ounce versus all you can eat. A funny incident involving Keynesian economists on a moose hunting trip and their unexpected optimism in the situation.

The podcast explores the concept of HOAs as a form of anarchy and the role of transaction costs. It discusses the pricing of services within private clubs and the impact on wealth distribution. The significance of reputation and security services for property value is highlighted. The challenges of enforcement and exclusion are examined through the example of Tuh and a plumber. The episode also includes humorous stories and listener letters discussing perceptions of economists and pricing issues.

Send us a textThe listener letter last week asked about the the three "red dots" that are used to identify liquor stores in South Carolina.Turns out that this kind of "shibboleth" is a way of identifying and discriminating, in ways that can be useful, or harmful.Red Dots in South Carolina:The Robert Moss (SOUTHERN SPIRITS) versionSouth Carolina Encyclopedia (from Moore, John H. “Solving the Red Dot Mystery.” Sandlapper,  spring 2000: 32–34.)ShibbolethGileadites and EphraimitesBackground on the conflictNaked mole rats use shibboleths (thanks to Robert Lawson, who knows him some mole rats)The Stone Signposts of PompeiiWorld Series as Shibboleth  (Robert T. Gravlin, 23rd Armored Engineer Battalion)Appropriate Measures of InflationERRATUM: MJ writes to point out that if the economist could really count, he would have miscounted the number of sheep, adding one, because he counted the dog. That's fine. But then why did the shepherd agree that the number of sheep was correct? It should have been one over. It's okay that TWEJ's are not funny, that comes with the territory. But in this case there is a logical problem. My mistake, and thanks, MJ!If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textHow do you trade off your own interests against the interests of others? And what role do transaction costs play? A discussion of our "interest" in the welfare of others,  and the complexity that adds to economic indifference curves. Things take an interesting turn, going toward how transaction costs can shape our institutions and preferences, ranging from  a marine fishery to a bowl of M&M's. And TWEJ. Always, TWEJ.Some Resources:Gary Lynne, on Dual Interest Theory:   https://journals.sagepub.com/doi/abs/10.1177/02601079231172366?journalCode=jieaNeo(Classical) and Rama-Kandra, on caring about others:  https://www.imdb.com/title/tt0242653/characters/nm0924502On Coase, Olson, and the Problem of Encompassing Institutions:Justice Department Merger Guidelines:  https://www.justice.gov/archives/atr/merger-guidelines-and-integration-efficiencies-antitrust-review-horizontal-mergers: https://www.justice.gov/archives/atr/merger-guidelines-and-integration-efficiencies-antitrust-review-horizontal-mergersRonald Coase, 1937, "The Theory of the Firm." https://onlinelibrary.wiley.com/doi/full/10.1111/j.1468-0335.1937.tb00002.xRichard Jankowski on Encompassing Organizations:  (1989). Preference Aggregation in Firms and Corporatist Organizations: The Enterprise Group as a Cellular Encompassing Organization. American Journal of Political Science, 33(4), 973–996. https://www.jstor.org/stable/2111117Robert Keohane, "International Institutions": https://www.jstor.org/stable/2600589Mancur Olson, the Rise and Decline of Nations. https://www.jstor.org/stable/j.ctt1nprddThe "Coase Theorem" and the "$100 Bill on the Sidewalk" Joke: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405632On Brown M&Ms:The DLR interview (excerpts): https://www.youtube.com/watch?v=_IxqdAgNJckNPR on Brown M&Ms:  https://www.npr.org/sections/therecord/2012/02/14/146880432/the-truth-about-van-halen-and-those-brown-m-msBackground, including a copy of the relevant part of the contract:  https://www.insider.com/van-halen-brown-m-ms-contract-2016-9If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz