Wednesday, February 22, 2012

Links for 22nd February 2012

First, I am so glad to see a neuroscence article which says that there is something we do for which we do not have a specialized brain region. Tom Stafford writes about why we find it so easy to remember faces, and so difficult to remember names.
Or to put it another way, we might use the same word – ‘remember’ – to describe our ability to place faces and names, but in fact we are describing two different psychological processes: recognition and recall.
Second, Alex Tabarrok at Marginal Revolution describes the secret agreement that created modern China.
Word of the secret agreement leaked out and local bureaucrats cut off Xiaogang from fertilizer, seeds and pesticides. But amazingly, before Xiaogang could be stopped, farmers in other villages also began to abandon collective property. In Beijing, Mao Zedong was dead and a new set of rulers, seeing the productivity improvements, decided to let the experiment proceed.
Incentives aren't everything, but they aren't nothing either.

Third, pretty much every introductory Economics textbook I have looked at discussed the evils of Rent Control. JW Mason has two posts at The Slack Wire, asking whether rent control really is really such a bad thing. I am not entirely convinced by his arguments, but I am impressed.
On why Rent Control is desirable
The most compelling argument for rent control is neighborhood stabilization, the idea that social capital in an urban environment requires stable residence patterns. If prices are volatile, and this leads to a lot of residential turnover, the result can be a less desirable neighborhood for everyone.
And on why it won't deter new investment because in the United States all existing Rent Control only apply to units built before a certain date. In NYC, it is 1974.
The significance of this is that, even if an asset lasts forever, the share of its present value -- which is what matters for the decision to buy/build it -- that comes from the later years of its life goes arbitrarily close to zero. Say the discount rate is 6 percent. Then 95 percent of the value of a perpetuity comes from the returns in the first 50 years. 99.7 percent comes from returns in the first 100 years
Fourth, I've just started to try GitHub and enjoyed reading this article in Wired. Nice insights into the culture of Silicon Valley. Maybe Jack Welch should read it.
And three months after that night in the sports bar, Wanstrath got a message from Geoffrey Grosenbach, the founder of PeepCode, a online learning site that had started using GitHub. “I’m hosting my company’s code here,” Grosenbach said. “I don’t feel comfortable not-paying you guys. Can I just send a check?”
It was the first of many. In July 2008, Microsoft acquired Powerset, the startup that was providing Preston-Werner with a day job. The software giant offered Preston-Werner a $300,000 bonus and stock options to stay on board for another three years. But he quit, betting everything on GitHub.

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