Why Don't More Teams Move to Baseball's Biggest Markets?

The Yankees, Mets, Red Sox, Dodgers, Cubs, and Angels top Forbes's 2009 list of most valuable baseball franchises. Not coincidentally, these teams play in the nation's biggest cities (with the exception of Boston).

Owning a baseball team is most lucrative in a big city. The team attracts more fans, who pay higher ticket prices and buy more merchandise, which allows the team to afford top free agents, which leads to more winning, which leads to more intense fandom, and on and on in a virtuous cycle.

Why does the rest of the league let the Yankees and Mets have a monopoly on New York City and the resource advantages that come with it? One could imagine a law of one price scenario, in which teams move into New York and dilute the revenue base there until owning a team in New York is no longer more profitable than owning one in the next-best city.

Of course, things don't work quite that mechanically. The Yankees' storied history (27 titles and too many legendary players to list) would help them retain a large majority of the New York market against the likes of the Queens Marlins or the Staten Island Athletics. Also, it's doubtful that the league would allow so many teams to move to an existing market (remember the stink that Baltimore Orioles owner Peter Angelos put up when the Montreal Expos moved to D.C. before the 2005 season?).

In his book "The Baseball Economist," JC Bradbury (who writes a blog on baseball economics) points out that there are disadvantages to big cities as well. He shows that big markets and winning only have a weak correlation and argues that winning in a big city generates more cash only up to a point: "Though big cities hold more potential baseball fans than small cities, those people aren't necessarily freely available to watch baseball. Big cities also have more distractions. New York offers many more opportunities for entertainment than Milwaukee." To take the starkest example in sports, it's hard to imagine the Packers being more valuable anywhere else than they are in Green Bay, Wisconsin (population 102,000).

Of course, history has proven that even New York City couldn't handle three teams, when the Brooklyn Dodgers and New York Giants left for California in 1958 (incidentally, both now have to compete with nearby American League teams). Four years later, the Mets began play, and in the nearly five decades since, they have yet to catch up to the Yankees in terms of a fan base, franchise value, or on-field success.

How Many Blog Posts Per Page?

A blog's home page, much like other Web sites, faces tradeoffs when it comes to how much information is presented at one time.

Displaying many posts at once increases the chances that readers will see something they like. Just count the number of links in any one place at traditional news sites, such as the Washington Post's local page, though this can quickly lead to clutter. Luckily, blogs typically consist of one post after another in a vertical layout, with other page elements-- like "about me" and ads--off to one side. This linear presentation is less likely to overwhelm the reader, as the long string of posts is out of sight and mind until the reader scrolls down. The longer readers can scroll without having to click to new pages, the more likely they are to be engaged by what's being said and continue reading.

Conversely, having fewer posts per page makes the site load faster. This had been becoming less of a consideration the past few years as broadband speeds accelerated, but the issue has seen a resurgence as many people access the Web from iPhones or similar devices via 3G (or cellphone) signals. Additionally, profit-driven ventures will prefer fewer posts per page, as interested readers will generate more page views and ad impressions as they explore the site.

For many blogs, this decision will be dictated by the site's content, as pointed out by some commenters at BlogCatalog. A photographer's blog that contains a lot of high-res images should be limited to only a few posts per page, but blogs that consist mostly of quotations and short analyses can have dozens of posts per page.

Why Do We Move Out Couches but Leave Refrigerators?

(... at least in most apartments.)

Couches and refrigerators are both bulky and hard to fit through doorways. Both are pretty essential pieces for an apartment. Yet we almost always will take the couch with us and leave behind the refrigerator.

Both items are available in wide varieties. Yet the differences among refrigerators are not as important to most people as are the differences among couches.

For one tenant, a pink Hello Kitty love seat fits the bill perfectly, but the next will crave a three-seat brown leather chesterfield. Couches differ on so many margins--color, size, material, cost, sentimental value, subjective comfyness, subjective appearance, presence or lack of cup holders or recliners--that it's worth our while to lug them in and out every time we move.

While some refrigerators have extra features, most people don't mind the standard model (of course, I'm referring to the refrigerator-freezer unit here). Refrigerators either do the job, or they don't: as long as the food is refrigerated (or frozen), most people are happy. Refrigerators vary in external styles and colors, but the apartment owner has likely already picked out one that matches the rest of the kitchen. If the refrigerator doesn't make ice cubes, you can buy an ice cube tray. Refrigerators vary in energy usage, but as a renter, you're not going to buy a separate low-energy refrigerator, unplug the one that came with the apartment, and store it elsewhere; you almost certainly aren't going to choose one apartment over another based on refrigerator efficiency.

One margin that is important to many people is size. It makes sense for the people who want more room to buy mini-fridges or mini-freezers to supplement the standard model. These things are easy to move out to the next place, and thus they save everyone a lot of grief by allowing refrigerators to come standard.

Why Is GM Shutting Down Hummer Instead of Selling It for Something?

CC photo from Sfoskett of Wikimedia.

From the New York Times:

DETROIT — General Motors said Wednesday that it would shut down Hummer, the brand of big sport-utility vehicles that became synonymous with the term “gas guzzler,” after a deal to sell it to a Chinese manufacturer fell apart.

The buyer, Sichuan Tengzhong Heavy Industrial Machines, said in a statement that it withdrew its bid because it was unable to get approval from the Chinese government, which is trying to put a new emphasis on limiting China’s dependence on imported oil and protecting the environment.

....

G.M. had been trying to sell Hummer for nearly two years, and struck a preliminary deal with Tengzhong last June. The two companies had planned to close the $150 million deal by the end of January, then delayed the deadline by a month in the hopes of getting the green light from China.

GM can't get $150 million for Hummer, so instead it's settling for ... $0 ... by retiring the brand? This doesn't add up. Whenever you have an asset that has lost a substantial amount of value (without going entirely bust), you don't just throw it in the trash--you sell it for whatever you can get for it.

I'm not precisely sure what's involved, but there are some underlying costs associated with transferring a brand to another company (for a numerical example, assume this is $1 million). But there are also costs associated to shutting down a brand outright (say this is $200,000). In this scenario, any sale of the brand above $800,000 makes the company a net profit and should be undertaken. Just because GM couldn't make a deal for $150 million doesn't mean it shouldn't have tried to sell the Hummer brand for a tenth of that.

Perhaps GM doesn't want to undercut the perceived value of its other brands or generate public ridicule at the low sale price. Those are the only excuses I can think of off the top of my head. But neither seems like a good enough justification for leaving money on the table.

New York City Bans Homemade Goods at Bake Sales

From Gothamist (via Marginal Revolution):

Months after it barred schools from holding most food fundraisers, the city says bake sales can go on—as long as no homemade treats with undisclosed calorie counts grace the fold-out tables. The new regulation, designed to combat ever-increasing childhood obesity, limits bake sales to "fresh fruits and vegetables, or one of 27 specific packaged items" that include low-fat Doritos, Nutri-Grain Cereal Bars (blackberry only) and Linden’s Cookies (butter crunch, chocolate chip or fudge chip cookies in two cookie packs) among other things.

This is, of course, to comply with New York City's mandate that food servers post calorie counts on their menus. An unintended consequence of this policy has been to add transactions costs to the operating expenses of feed servers. Large firms like McDonald's can easily absorb the cost, as it is split over its hundreds of restaurants in the city, but even hot dog vendors on the street must comply with the rules. Even smaller players--like parents making snacks for a bake sale--are pushed out of the market because they can't comply with the logistics.

Of course, at many bake sales, the participants will have little incentive to report such an offender, so perhaps the law will be largely ignored.

Clock Is Ticking on Cleveland OF Choo's Military Obligation

CC image from Keith Allison on Flickr.

There's a good discussion over at Yahoo's Big League Stew about Cleveland Indians outfielder Shin-Soo Choo, who is running out of time on South Korea's requirement that all able-bodied males serve two years in military before age 30. Baseball players don't have much of a shelf life, so Choo might take drastic measures--such as applying for U.S. citizenship or never returning to his homeland--to avoid his obligation.

This isn't the nation's most oppressive policy by any stretch of the imagination, but it sure is an idiotic one. All sorts of people, not just baseball players, are in the midst of crucial life-forming activities in their 20s--attending school, beginning their careers, starting a family--and the military service requirement couldn't come about at a worse time.

Even if Choo is eventually excused (as athletes sometimes are), the policy no doubt creates a distraction and an underlying worry for him, which could lead to poorer performance. This in turn could lead to less prestige for the nation and less money being sent home by Choo--far in excess of any value that the South Korean army would gain from having one additional soldier.

The Case for Laying Off Copy Editors

This will no doubt sound like sacrilege to my former journalism colleagues, but in most scenarios, if a newspaper or other publication has to choose between laying off a copy editor or a reporter, it should can the copy editor.

Yes, copy editors perform many essential functions. They clean up grammar, spelling, wordiness, and writing that just doesn't make sense, thus saving reporters embarrassment on a daily basis. They help protect the paper against libel. They write the headlines and photo captions, and if these elements are lame, vague, or inaccurate, readers won't bother with the underlying stories. At many papers, they also design the page layouts.

But reporters provide an even more essential function: producing the stories. (The same can be said for photographers.)

When staff reductions are needed (we don't even need to get into how newspapers are becoming increasingly less profitable in the Internet age), what makes the newspaper less worse off: having relatively fewer stories or relatively less copy editing? You can't keep both sides fully staffed, so which would you cut first?

When I worked at the Washington Post a few years ago, I was assigned to copy-edit two or three stories a night. We were expected to check every fact in every story, no matter how mundane. Spending an hour on a story was typical, even though the story had already gone through an assignment editor (who checks for bigger-picture issues) and would also seen by a slot (copy chief) and a proofreader.

For instance, in this paragraph from a baseball story:

But in the bottom of the sixth, Flores drilled a 1-1 change-up from Giants starter Jonathan Sanchez to center field, tough territory for even seasoned power hitters to reach at RFK. Flores's season, though, has been about defying expectations. He is 22, had never played above Class A, was a Rule 5 draft pick whom Manager Manny Acta said the club hoped to "hide," but he has long since proven they don't need to do that.

I would check: Was it really the bottom of the sixth? Was it really Flores? Was it really a 1-1 pitch? Was it really a change-up? Was Sanchez really the starter, and is his name spelled correctly? Is Flores really 22? Did he really never play above Class A? Was he really a Rule 5 draft pick? Is Manny Acta's name spelled correctly?

The vast majority of the time, this was wasted effort. The hours spent fact-checking hardly justified the number of errors caught. In today's journalism environment, such extensive fact-checking is just too expensive.

It seems to me that cutting the copy desk in half (eliminating about 30 jobs, if I recall correctly) won't make the paper that much worse off. Sure, there will be more mistakes and slightly less compelling headlines, but this is a much better outcome than if 30 reporters were eliminated (and the hundreds of stories a week that they collectively produce).

In some cases, however, newspaper should be substituting away from reporters and instead use wire copy. I've long been critical of the Post for flying reporters to the Super Bowl, Olympics, American and National League Championship Series, and other national sporting events. Maybe there are local angles in these events, but why do the reporters need to be there to write about them? The expense of covering them is not justified, as the articles will just be needless duplication of whatever the Associated Press could have produced and thus will have dubious value for the paper's readers.

And this is all a matter of relative magnitude. If a paper has 100 reporters and three copy editors, it's better to lose one of the reporters rather than cut the copy desk by a third. Chopping the copy desk only works up until a point of critical mass, but it should still be the first department trimmed.

But in short, producing is better than polishing. The success of blogs and other online news sources shows that people are willing to put up with a little sloppiness if it means a steady stream of content.

What if Metro Trains Didn't Have Drivers?

From Human Transit, describing the transit system in Vancouver:

On the Expo and Millennium lines, you'll never wait more than 8 minutes for a train. On the combined portions of these lines, which connect some of the densest centers in greater Vancouver, you'll never wait more than 4 minutes -- not even at 7:00 AM on Sunday or 11:45 PM on a Tuesday. In a year of living in Vancouver and riding Skytrain every day, I never waited more than 5 minutes.

The lack of a driver is the key to those extreme frequencies. When you have a driver on every vehicle, the labor cost is the dominant cost of operations. So when you have to cut service, as many North American agencies are doing this year, you end up cutting frequencies, starting with late night and weekend. Many North American light rail systems are dropping below even a 15-minute frequency in the evening, making themselves increasingly useless for the spontaneous trips that are essential to freedom in urban life.

If WMATA undertook a similar policy, it's hard to overstate the benefits to the region. More frequent trains would mean that the system could handle more riders. More people would use the Metro, because the expected wait times and crowdedness would both fall. Perhaps the labor cost savings would even allow the Metro to stay open later. Many of these additional riders will spend money in the local economy that they otherwise wouldn't have.

Of course, such a plan might not be feasible in the D.C. region, for any number of reasons. But I suspect that a study thereof would never be conducted, as it puts in jeopardy the jobs of the current train operators. Additionally, the fatal Red Line crash last June, in which the train operator hit the brakes to no avail, wouldn't help convince people that driverless trains will be safe. However, the D.C. area may be paying quite a high price to keep these people employed, if it means limiting the hours and frequency of Metro trains.

Coinstar by Mail: Could It Work?

CC photo by justj0000lie on Flickr.

Coinstar kiosks can be seen in grocery stores nationwide, converting coins to cash vouchers. For many people, the convenience of dumping a jar of coins into a machine is well worth the 8.9% counting fee to avoid the chore of counting coins by hand, wrapping them, and bringing them to the bank. Customers can also avoid the fee by instead getting a gift certificate for the full amount to one of several retailers. 

Could Coinstar take convenience one step further? Why should customers go to the grocery store when they could mail their coins directly to Coinstar? If this sounds absurd, let's not underestimate American laziness. Many people would rather order a book from Amazon than pick it up at their local bookstore, even if it means waiting a few days. Brick and mortar video rental stores like Blockbuster are in danger of becoming extinct because so many people would rather mail their DVDs back and forth to Netflix. So why not mail coins?

Would this be cost effective? The biggest USPS flat-rate box available measures 12" x 12" x 5 1/2", or a volume of 792 cubic inches. It ships for $14.95 domestically (the price includes the cost of the box), and there is a weight limit of 70 pounds.

The number of coins that can fit into such a box is restricted both by weight and by volume. To get a rough estimate, let's consider that a quarter has a diameter of 24.26 mm and a thickness of 1.75 mm. This translate to a volume of 0.0493 cubic inches per quarter. This volume divides into the box volume 16,000 times. So 16,000 quarters could theoretically fit, if we ignore weight considerations and the fact quarters are round and thus would not stack evenly.

A quarter weighs 5.670 grams, and thus 5,600 quarters would weigh 70 pounds. This amount of quarters would easily fit into the box, as demonstrated above, so the maximum amount of quarters one could ship in such a box is 5,600 (worth $1,400).

A Hungarian mathematician has calculated the distribution of coins in an average coin jar. He concludes that the average value of a pound of random coins is $12.96. About 100 coins weigh 1 pound. So theoretically anything between 150 coins (enough to cover the cost of the postage) and 7,000 coins (the most that will fit in the box) would net the customer a positive return and, if the coins number in the thousands, a substantial return ($12.96 per pound times 70 pounds is $907).

Coinstar could send a flat-rate box to customers relatively cheaply but insist on prepayment of the return shipping, so that only those with enough coins will request a box. Enough people might be willing to pay for the shipping if it means getting hundreds of dollars back for their coins; a fee of $14.95 quickly becomes less substantial in percentage terms as the number of coins grows.

D.C. Metro Wants to Be Compensated for Costs of Not Running

CC photo from thisisbossi on Flickr.

From a WMATA press release:

The February 2010 snowstorms cost Metro an estimated $18 million---$8 million for snow removal efforts and $9.7 million in lost revenue. 

Metrorail service was limited to underground service on several days due to the blizzards, resulting in a tremendous loss of ridership. Also, Metro is also experiencing additional revenue losses from unusable parking spaces at parking lots throughout the system that are still covered in snow and ice. 

The $8 million in expenses for snow removal include labor costs such as overtime for employees; money paid to private contractors for snow removal services; deicer, salt and additional fuel needed for snow removal equipment. 

“Metro is currently working with the Commonwealth of Virginia, District of Columbia, and the State of Maryland to submit costs to the Federal Emergency Management Agency for potential reimbursement associated with the snow storms,” said Carol Kissal, Metro’s Chief Financial Officer. “We are aggressively pursuing recovery of the $8 million in snow removal costs and the $9.7 million in lost revenue” through federal disaster aid, she said. Metro will also pursue recovering other administrative costs, including equipment and damage to Metro property.

It's puzzling at first that Metro wants to be compensated for the revenue from the lost ridership during the recent snow storm, as it didn't have to run as many buses and trains. As with many things in economics, it's important to determine whether most of Metro's costs are fixed or variable.

When fewer lines were in service, Metro saved money on gas, electricity, and maintenance, among other things. However, as a government agency, it almost certainly still paid all of its employees, even those who were excused from work. It still had to pay for rent on its facilities and interest on its loans. It's possible that the majority of Metro's costs are fixed, and that running fewer trains isn't saving it much money.

Whether the District, Virginia, and Maryland should be footing this bill is another matter.

The Reserve Clause in Baseball: Why Did Players Buy It for so Long?

 

More from "A Well-Paid Slave":

The committee had been meeting for the last two years. Each time the players proposed an alternative to the reserve clause, the owners rejected it. “If you want to change one comma,” Miller said, describing the owners’ position, “Yankee Stadium will fall.”

So went the argument in support of baseball's reserve clause, which was in place until 1975. Without the reserve clause, players would be able to freely negotiate with any team after their contracts expired. The owners argued that this would lead to ruthless bidding wars and eventually make the costs of running a baseball team so high that the league would go bankrupt. Even many players bought into this argument.

That the system remained in place for so long reflected a widespread misunderstanding of economics. In free markets, the forces of supply and demand ensure that prices reach optimal levels. Ballplayers have quantifiable values, based on how many additional wins their contributions are expected to bring, and in turn how much additional revenue these wins will generate. If the Yankees thought Alex Rodriguez's contributions wouldn't earn them more than $32 million a year in additional revenue, why would they give him such a big contract? Why would teams systematically commit to payrolls that they couldn't cover based on their expected income?

If players collectively demanded $10 billion a year, owners aren't going to pay it, because the league only generates about $6 billion a year (and has many other expenses besides player salaries). No amount of vicious bidding could support such demands. But the free market has driven player salaries up exponentially in the past three decades, and the league is still alive and well. The only difference is that a greater share of the profit is now in the hands of the players instead of the owners.

Sometimes, revenue can be unpredictable. Many teams in all sports are lamenting the long-term contracts they've signed ahead of the current recession, and some are losing money in the short term. But, like in any business, any team or any league that loses money year after year will eventually go bankrupt. Teams will not consistently make wild, unsustainable bids for players and drive themselves into oblivion.

I've written previously about this book, analyzing how it's so difficult for athletes to bargain collectively.

My RSS Reader Needs an Editor

Trends from my Google Reader account.

Many people want to delay the inevitable death of the printed newspaper because of nostalgia or self-preservation. But the print model does offer one thing that we don't get from RSS feeds: someone deciding for us what's important, and what's trivial enough to skip.

In a newspaper, the most important stuff is on the front page. The bigger the headline and the higher up on the page, the more the editors are vouching for the story's news value:

Not so with RSS readers. RSS is an extremely powerful tool. Instead of visiting 90 news sites and blogs each day, you can have the latest information collected for you in one place, waiting for you whenever you're ready for it. But there is no sorting, just an endless string of items:

For those of you who use RSS, and especially if you're following dozens of feeds, you have to quickly judge whether something is worth your time. In journalism school, I was taught that a story must get to the point within the first seven words of the opening paragraph, or readers will lose interest. With so many articles in any day's paper, there was little point in continuing to read one that didn't interest you.

But with online news, the amount of competing information available is almost infinitely more. I've found that if I'm not grabbed within the first three or four words of the headline, I'll just click "next item" and skip it (yes, I won't even read the entire headline sometimes). I read only about 25 percent of the items that come over my feeds, so a lot my time is spent shifting through useless information.

And this is even after I've chosen to follow only the feeds I find most interesting. Many sites offer specialized feeds for only certain topics. For example, I don't follow everything from Greater Greater Washington, only its transit section.

Can the Web reproduce the value created by the newspaper editor, who not only decides what is fit for publication but also how prominently items are displayed? Many news sites still using varying headline sizes to show story prominence (the New York Times is a good example), but again, the point of using RSS is to avoid manually visiting dozens of sites you want to follow.

In some ways, the Web does a better job of filtering. The newspaper editor's filtering is only valuable if you and the editor have the same tastes. Instead, various computer systems attempt to automate the recommendation process based on what you're already reading, including Google Reader's suggested items feature and WordPress's related posts widget.

However, some people have stopped using RSS all together (not to mention newspapers and online news sites). Instead, they get their news from snippets and links from their friends on Facebook or Twitter. As one writer says, "It makes me feel guilty. I have 1,000 unread items. Twitter doesn't tell me that."

Scalping Tickets? Don't Carry Change

From Swifter, Higher, a blog about the Olympics:

"What do you want to pay for it?" Leather Jacket said. "75... 60..."
"30," I said.
It was about as close to an Olympic victory as I'm ever going to get. I pulled a pair of Canadian twenties from my pocket. As he pulled his stack of bills out, he tried one last maneuver.
"I'm sorry, I only have one five," he said. "You want to flip?"
"No," I answered.

While it did not quite work in this scenario, there's something to be said for not carrying change for one-off transactions--especially urgent ones, like ticket scalping shortly before a sporting event. Once a fan has spent time negotiating with a scalper, he's unlikely to walk away from the deal over a few dollars. And he's unlikely to go find a bank or another third party to make correct change. Or to start over with another scalper, as it's uncertain he'll get a better deal and the cost of wasting even more time (and thus seeing less of the event) is high.

See the article for more on the underbelly of the Olympics ticket-scalping scene.

Hat tip to the Freakonomics blog.

Why All Rapists Don't Get Put to Death (Nor Should They)

Rape is among the most heinous crimes one person can commit against another. It violates the victim in the most personal and perverted way. It causes intense emotional and psychological damage that can remain for decades after the crime.

Yet we typically do not put rapists--even child rapists--to death, or give them lifetime prison sentences. And we shouldn't.

As uncomfortable as this may be to accept, showing leniency toward rapists can be in the victim's favor, as it increases her chances of survival.

First, imagine the counterfactual--that the penalty for rape is death, if the rapist is caught. Now, what incentive does the rapist have not to murder his victim? Because he is already facing a death sentence, killing the victim will not make his potential punishment any worse. In fact, he will have even more incentive to kill his victim, as the crime will be much more difficult to solve with a dead victim than it would be with a survivor.

We have to dole out harsher punishments for harsher crimes. By making the punishment for rape and murder worse than the one for just rape, we are giving the rapist an incentive to keep the victim alive. As sad and seemingly unfair as it is, many victims owe their lives to this policy.

Online News Spoils Tape-Delayed Olympics, and What to Do About It

In sports, the headline can't be "SUPER BOWL COMPLETED AS PLANNED YESTERDAY."

NBC's prime-time tape delay of the Olympics and the ever-increasing advent of online news have created a unique dilemma (New York Times):

At 6:24 last night, more than an hour and a half before NBC began its tape-delayed coverage of the Winter Olympics, The Times reported on its home page that Lindsey Jacobellis, a popular American, had veered off course in the semi-finals of the snowboard cross and was eliminated from medal contention.

It was news, but the kind of news some readers wish the paper would hide behind a “spoiler alert” until they have had a chance to be held in suspense by the television coverage.  Jacobellis’s heartbreak wasn’t shown until 9:33, more than three hours after The Times reported it.

“Could you please ask the editor of the front Web page to not name the winners within the headlines/sub-headlines?” asked Ken Waters of Phoenix.  Matt Gooch of Harrisonburg, Va. said he was disappointed when The Times reported the results of the men’s downhill before NBC showed the event.  “This is not Taliban news, nor TARP news, or even Paula Jones type news,” Gooch said.  “There is no meaning to this except the anticipation and suspense that sports viewers feel watching the event live.  Please help me understand why your organization needs to spoil the experience.”

I often like to watch sporting events on slight delay on my DVR (maybe an hour into the game) to be able to fast-forward through the commercials. But on those times when I've accidentally discovered the final score while checking my laptop or talking to a friend, the experience has been severely compromised. With many Olympic events shown on tape delay (especially when they're held in Asia or Europe), the potential for "ruining it for yourself" grows exponentially.

The departure from spoilers for, say, movies is most interesting to me. An online headline for a movie review will have the movie's title and some allusion to the plot, the twist, the acting, or the production values. However, it won't blare, "THE GUY IN TITANIC DIES AT THE END."

In sports, the score is the story. The front page of the newspaper doesn't bellow "SUPER BOWL COMES TO A CLOSE" in 60-point bold font. So a headline that doesn't give away the ending isn't a headline at all.

The best solution I can think of is adding some slight transactions costs to getting Olympic news. The New York Times' public editor, in the above-cited blog post, alludes to how the Times thought about putting the headlines a click away from the main homepage but decided against it. Or the headline could be purposefully vague: "Disappointment in the Snowboard Cross (Spoiler)," to be rewritten once the event airs. The hard-core fans can get the story now, while the TV-suspense-loving bunch can safely stay away.

If Jeter Is Not Forever a Yankee, So What?

CC photo by Keith Allison on Flickr.

From a New York Times story about the Yankees' strategy in eventually re-signing Derek Jeter:

Jeter’s value is different, and the Yankees understand they must treat him as a special case. Parting ways would be devastating to their brand, but no less so to Jeter’s legacy. The Yankees and Jeter need each other, and it is hard to imagine acrimony at the bargaining table.

I originally started to write this post about how one player can be so much more valuable to one team--and vice versa--because of legacy considerations. Jeter has so much glory as a Yankee, and it's hard to imagine him sustaining that if he were traded to, say, the Pittsburgh Pirates.

However, if a lucrative trade opportunity or a contract standoff were to arise involving Jeter (neither is very likely, of course), the Yankees should part with him, just as if he were any other player. While there would be short-term backlash from fans, Jeter has already cemented his legacy as a Yankee.

Is Joe Montana's legacy as a 49er tarnished by his last two years in Kansas City? Does anyone even remember that Babe Ruth finished his career with the Boston Braves? I imagine also that Brett Favre's Packers glory will be celebrated for decades despite his recent stints with the Jets and the archrival Vikings. Much has been made about how Tony Gwynn and Cal Ripken, Jr., both spent their entire careers with one team, but if they ended their careers with short stints elsewhere, how much is their glory really diminished?

Of course, as long as Jeter remains productive, it's likely that he'll stay with a good team. A good player is worth more to a good team than he is to a bad team. For example, a 5-win increase for the Yankees may be the difference they need to make the playoffs, while a 5-win bump for the Washington Nationals still keeps them in last place. And while Jeter remains this valuable of a player, he might as well do it with the Yankees. But don't be surprised if the Yankees give up on Jeter before he wants to leave the game for good.

Why Can't I Sell My Right to Return a Product?

If you're sure that you're gonna to love the Ghostbusters game for Wii, why can't you promise the store you won't return it and thus be entitled to a discount?

At most stores in America, especially the large chains, we buy with the understanding that we can get a refund or return the product if it doesn't work or doesn't fit. Or for any reason, really.

Why can't I forgo this right and get a discount? If I want to buy a video game from Best Buy--and assume all the risks myself that it won't work or that I won't like it--why can't I sell away my right for a refund? Because Best Buy now would have a higher expected profit from the sale, it should be willing to part with the game at a lower price.

For this analysis, it's crucially important whether handling returns is more of a fixed-cost or a marginal-cost endeavor.

There are fixed costs to setting aside space in the store for a returns department, staffing it, and setting up a computer system to handle the returned items. Inspecting and reshelving the items require resources, but once a staff is in place to do these tasks, each additional item doesn't cost the company more money.

A store also faces marginal costs on each return. A returned item may have to be repackaged. It may have to be refurbished. It may have to be discounted, as it is now somehow fundamentally different from a "new" product.

Whichever of these effects is strongest will determine whether a store would benefit from buying the "no-return" right from customers willing to sell it. If the fixed cost effects dominate, then eliminating the possibility of my one return isn't going to save the company any money. But, on the other hand, if most of the costs are marginal, the store may welcome the reduced chance of having to pay for repackaging or refurbishing.

I wonder if such a policy would suffer from adverse selection. To briefly explain the concept, take an example from the insurance world: among young people, only those most likely to get sick are going to be willing to pay for health insurance. And these are precisely the kind of people that the insurance company wants to avoid insuring. If stores adopted the above policy, only the people most likely to return items will pay for this right. However, it seems that the ability to have the non-returners self-select can make the store more competitive by offering such people a lower price, while assuming all the normal risks with the others (because, of course, most products won't be returned anyway).

An argument could be made that such a system already exists with secondary markets. For instance, instead of buying a book new on Amazon--with all of its guarantees of shipping speed and its liberal return policy--I could save a few dollars by buying the book used and hoping that it will arrive on time and will not have excessive highlights or other defects.

The Early Bird Gets the Cubs Tickets ... For an Added Fee

CC photo from MACSURAK on Flickr.

From the New York Times:

But the Cubs are adding a twist this year. On Monday, fans will be able to buy tickets to every Cubs home game, but at a premium of 20 percent over the face value, or 15 percent if they pay with a MasterCard. The MasterCard First Chance Presale will last until Thursday and include an undisclosed percentage of the pool of the Cubs’ single-game tickets.

On Friday, any remaining tickets will be sold at face value (with the usual assortment of fees).

Although the story suggests that some fans may see this as a "stealth hike in ticket prices," it's probably a good move for the Cubs and their fans alike.

When a firm can sell a variety of products of various qualities and flavors at various prices to various people, this provides depth to the market. For example, we are better off as consumers because there are many types of bread in the store. You can pay more and get name brand. You can pay less and get day-old bread. You can buy whole wheat, sourdough, and countless others. No one complains that better or more exotic bread carries a higher price tag.

Similarly, we can treat the early-bird Cubs ticket as a different "good" than the other tickets. The right to be first in line can be very valuable, as I discussed in an earlier post about boarding on Southwest Airlines.

Every year, the demand for tickets far exceeds the supply (at least at current prices), and the premiums that fans pay above face value end up in the pockets of scalpers. Instead, if the more anxious fans can pay a premium for first dibs, at least the extra money goes to the Cubs (and possibly toward player payroll), and not to the scalpers.

Curt Flood and the Difficulty for Athletes to Negotiate Contracts

I've been reading a book called A Well-Paid Slave. It follows former major league outfielder Curt Flood, who helped bring an end to baseball's reserve clause.

Under the clause, a player was bound for life to the team that drafted him; he could either accept the team's salary offer at the end of each season or sit out the season. He could not freely negotiate with other teams.

After the 1969 season, Flood sued Major League Baseball, arguing that his reserve-clause salary of $90,000 was analogous to slavery. For more details, follow the links or read the book.

The reserve clause was toppled in 1975, bringing about the era of free agency. Under free agency, salaries have exploded, driven up by teams bidding against one another for the services of the best players.

Outside of baseball, organized labor had been making tremendous strides for decades. Why did it take baseball players so long to organize successfully?

Athletes have comparatively less leverage in labor contracts for several reasons:

• Short careers. Athletes age quickly. For a major leaguer in the prime of his career, a labor dispute that costs him even a year of his career could prove devastating. For instance, Curt Flood had to sit out the entire 1970 season. It is rare for players to play into their 40s, so they only have a few years to cash in on their lifetime's worth of practice. Similarly, a minor leaguer would be unwise to miss time practicing and vying for the attention of scouts amid the literally thousands of other young players hoping to break into the bigs (each MLB team has about six minor league squads, in addition to independent leagues and college teams). If a young player is proving to be too much of a problem, the club may just shift its attention to the next kid in line.
• Few alternative opportunities. If workers at a steel mill lose their jobs because of a failed attempt at organization, they can find similar employment elsewhere. In contrast, a displaced baseball player cannot find other opportunities that are quite as lucrative or prestigious.
• Public relations. Workers making near minimum wage are often successful in tarnishing a company's image by appealing to appeal to its customers for support. It's harder for professional baseball players, who make several times the national average for playing a children's game, to vilify the owners by appealing to the fans, many of whom can barely afford to go to a game as it is. Indeed, Flood's analogy  comparing the reserve clause to slavery has been widely ridiculed.

Norman Chad, or the Art of Getting Other People to Write Your Column

CC image of Norman Chad at the 2006 World Series of Poker by flipchip / lasvegasvegas.com.

From a recent Norman Chad column:

Q. Is it okay if I sometimes skip over your column and read just the questions and answers? (Don Gallovic; Lakewood, Ohio)

A. Maybe I'll start a hidden $500 reader giveaway in the body of the column -- that will bring you back, won't it?

Norman Chad is a syndicated weekly sports columnist and ESPN poker analyst with an offbeat sense of humor. For years, at the end of his columns, he has had several questions from readers, along with his answers. He promises readers $1.25 if their questions make it into print. He often answers with a quip, but often the questions are so funny by themselves that he just responds with his signature line, "Pay the man, Shirley." Arguably, the questions are the best part of Chad's columns.

It's a clever way to get out of doing a little work and generating a lot of loyalty and goodwill from the readers whose questions are used. And, as with many media ventures, readers are so satisfied with the bragging rights that come from seeing their names in print that they will produce valuable content with little or no compensation.

On my reading list is a book called Wikinomics, which covers similar business models.

Baseball FanFests and the Power of Free

Teams around Major League Baseball have been holding FanFests ahead of spring training. The events allow fans to chat up the players, walk around the field, and see the mascots, among other things.

The San Diego Union-Tribune reports:

Padres officials expected close to 10,000 people to come to the park after the gates opened at 10 a.m. (9 a.m. for season-ticket holders). Just before 4 p.m., some 10,500 people had come through — more than any previous FanFest, said club President Tom Garfinkel. The gates closed at 5 p.m.

If this is in fact the largest turnout ever, it is a bit puzzling. The Padres finished fourth out of five teams in the National League last year. It's not their worst season by far, but they're only four years removed from back-to-back playoff runs. If we assume that San Diego's population and intensity of baseball fandom have been held relatively constant, it's surprising to see such a surge in attendance at the event this year.

The event is free, and I think that's the crucial factor. Of course, nothing is "free," as the event requires time to attend and gas money to get there, but these things are also required for many alternative activities. But with 12.4-percent unemployment in California and a global recession, perhaps the price tag was enough to compel some people to substitute away from things like movies or mall shopping in favor of a free event.

In other sports news, the number of people watching the Opening Ceremonies at the Olympics was up 47% from four years ago. Of course, watching television is also essentially free (once you've bought a TV and paid that month's bill, which most people would have done anyway).

Why Are Library Overdue Fines so Cheap?

"When I took that book out of the library--see that author photo?--he was clean-shaven."

Library overdue fines aren't primarily about collecting money; they're about ensuring that patrons return their books ... at some point. Most fees seem to be around 10 cents a day, with maximums of a few dollars per item.

If the fine is too small (say, a penny a year), people won't be very motivated to return books promptly, as a fine of a few pennies is essentially free. Still, the fine will cause ethical dilemmas for at least some people, making them feel like they've done something wrong.

If the fine is too large (say, $10 a day), people who forget to turn their books in on time will probably never step foot in the library again, in order to evade the fine. They could almost have bought the book brand new for that amount of money! Other residents will now avoid the library in the first place. This is clearly not in the library's interest, as its primary goal is to encourage reading in the community.

The fine needs to be just big enough to spur a tinge of guilt but not too large as to scare borrowers away. Library fines are rarely legally enforced (though there are some exceptions, and borrowers lose privileges to check out any more material), so they function almost as "voluntary fines." If the fine is too high, many people will never pay.

Of course, to avoid late fees, books can be renewed (in some cases, endlessly). This policy helps both sides. Readers can keep the books for a little longer than they expected, as long as they let the library know, without having to pay a fine. If a library sees that a book has been renewed, that shows some sign of conscientiousness on the part of the reader, most of whom will eventually return the book without having to be fined.

University libraries have the most leverage over the literary scofflaws. At many colleges, an overdue library book can prevent a student from seeing his final grades, requesting official transcripts, enrolling in classes, or filing for graduating.

Another way to get those overdue books back in? Make it trendy. The San Francisco Library hosted a "fine amnesty" program in May of last year, in which it solicited celebrity excuse videos and asked librarygoers to submit their own stories, true or not. The best stories were shared on the Web site and included in the library's newsletter.

Why Advertisers Pay for Spots on Bogus Web Sites

The front page of newyorktimes.cm. Click to enlarge.

There is a fascinating, if dated, CNN Money story from a few years ago about a man who owns 300,000 domain names. Most interestingly:

And what few people know is that he's also the man behind the domain world's latest scheme: profiting from traffic generated by the millions of people who mistakenly type ".cm" instead of ".com" at the end of a domain name.

Try it with almost any name you can think of -- Beer.cm, Newyorktimes.cm, even Anyname.cm -- and you'll land on a page called Agoga.com, a site filled with ads served up by Yahoo (Charts,Fortune 500).

Ham makes money every time someone clicks on an ad -- as does his partner in this venture, the West African country of Cameroon. Why Cameroon? It has the unforeseen good fortune of owning .cm as its country code -- just as Germany runs all names that end with .de.

The difference is that hardly any .cm names are registered, and the letters are just one keyboard slip away from .com, the mother lode of all domains. Ham landed connections to the Cameroon government and flew in his people to reroute the traffic. And if he gets his way, Colombia (.co), Oman (.om), Niger (.ne), and Ethiopia (.et) will be his as well.

It looks like the domain names have since switched hands, and Agoga.com seems to have vanished (see an archived version here). The interesting economic question here is, how can such sites be profitable? Why do Yahoo and Google, and by extension their advertisers, help subsidize these deceptive practices and thus offer some sort of tacit approval?

Imagine two ways (there are countless more) for an Internet user to come across an ad for a particular kind of car:

• Finding a blog or news article about the Toyota Prius and clicking on a contextual link along the side of the page.
• Trying to type in "prius.com," getting taken to an advertisement-laden page because of a typo, and seeing the same ad and clicking on it.

A blog post takes at least some effort to produce and is much more likely to be informative to the audience. A typosquatting site, on the other hand, can be produced almost automatically and costs about $7 a year for the Web hosting service. The former looks to build reader relationships over time through continued quality content, while the latter deceptively attracts one-off hits from poor spellers and hasty typists.

However, clickthroughs on the typosquatting sites are probably more valuable for advertisers. Not everyone who reads a story about a Prius is interested in buying one, but someone who bothers to type in (something close to) "prius.com" certainly may be. If advertisers take a moral high ground and refuse to advertise on such sites, they are probably costing themselves money.

I imagine that the typosquatting domain name business is becoming less profitable these days. Although old habits die hard (many people still use Internet Explorer 6, despite many calls for its abandonment), most modern Internet browsers have a built-in search bar at the top, in addition to the address bar. Google's Chrome browser has only one bar at the top for both URLs and Google searches, so a user typing in "shoes" is going to see a list of shoe-related searches populate as he types and is less likely to type "shoes.com" (or some misspelling thereof). When people look for such products via a search engine, the bogus Web sites mentioned above will be ranked very lowly and thus won't generate many clicks.

In addition, owners of such sites are often sued by the legitimate owners of the respective copyrights or products and thus forced to surrender the domain names (though no one can sue for the rights to a bogus site whose URL is based on the word "shoes").

Of course, these sites can make money in other ways besides advertising, such as installing malware on visitors' computers in attempt to gain access to financial information.

Thanks to Matt McFarland for the tip.

Some Newspapers Now Include Ads With Printer-Friendly Articles

A printer-friendly version of an article at the Courier-Journal in Louisville, Kentucky.

As noted over at the Gannett Blog, a few newspapers are adding full-color ads to the printer-friendly versions of their articles.

Traditionally, printer-friendly versions of articles have offered many advantages over the standard versions--perhaps too many. The entire article is displayed in one place, instead of over several screens. It is free from clutter, which causes the page to load more quickly, creates fewer distractions, and allows for easier copying and pasting for other uses.

It's not uncommon for people to link to the printer-friendly version of an article. There's nothing worse for a newspaper than to have a printer-friendly page go viral instead of the main article page, because the page will generate no ad revenue (aside from generating a small amount of brand building and reader interest for future articles).

The advertisement on the printer-friendly version seems like a good solution. Even if some readers print many articles, these ads probably won't be a major nuisance. After all, it's not like people will switch news sources over such a thing, especially if it's their hometown paper.

Nursing and 12-Hour Shifts

CC image from joguldi on Flickr.

Why do many nurses work 12-hour shifts? For guidance, I turned to my mother, who worked as a nurse for many years:

One reason is continuity of care.  Patients have fewer people caring for them and are usually happier with a nurse they can get to know a little.  Much easier staff scheduling for management as well.

Also, incentive for employment.  During normal times when it's not really busy you can work 3 days a week and it's considered fulltime.

Workers' productivities vary throughout their workdays, and it's likely that a nurse or anyone else will not be as sharp at the 11th hour of their workday as they were at the 1st hour. But, as Mom suggests, this trade-off may be more than compensated for by the fact that a patient doesn't have to deal with an endlessly revolving door of staff, with each shift having to brief the next on the patient's condition.

Another benefit for the nurses is that, by coming into work fewer days, they save on some costs that workers have to endure to get to work every day, most notably gasoline. And their schedules are not likely to coincidence with rush-hour traffic, making their commutes shorter.

Many other jobs, however, work better under the 9 to 5 schedule. For projects that require teamwork from several employees (or even several firms), it makes sense for the workers to all be there at the same time for more effective collaboration and communication. Additionally, many people prefer 9 to 5 because it gives them a predictable schedule week in and week out, making it easier to plan social events. Of course, with jobs such as nursing that require staffing 24 hours a day, not everyone can work "normal" hours.

For further reading, I suggest this NurseWeek article from 1998 and this diagram showing how the days-off schedule for 12-hour shifts could work out over a 2-week period.

Why Grades Matter in Law School but not Journalism School: Part 1

As with my previous post, I'm interested here in how important grades really are in terms of signaling how successful a student will be in the professional workplace.

How much grades matter depends on the field.

In law school, grades are very important. At least in a student's first year or before he gets his first internship, this is the only proxy that firms have to judge his ability as a potential lawyer. He could present examples of his classwork, but firms aren't much interested in reviewing his performance in mock court or reading essays he's written about legal topics.

In journalism school, at least for those interested in print or online journalism, grades are far less crucial. This is because the firms have a much stronger proxy for determining whether a student will be successful. All journalism programs have some sort of student newspaper or other publication (at least as far as I know), and whatever articles you can produce for the student newspaper are a direct reflection on what kind of articles you can produce at a professional paper. While a professional paper will give reporters access to better sources and (maybe) better technology, it's doubtful that the change of scenery will change the inherent quality of the reporter's work much. It's easy to spot a good writer or a good investigative journalist based on only a few writing samples. Newspapers would be wise to hire based almost exclusively on the quality of prior work, assuming that the student's grades meet some minimum acceptable level.

UPDATE 3/23: I've written more on this subject here.

Princeton's Grade Deflation Probably Hurts Its Students

A recent New York Times story explores grumblings from Princeton students about how the university's stricter grading policy makes them look worse on the job market and in grad school applications compared with students from other schools:

With the job market not what it once was, even for Ivy Leaguers, Princetonians are complaining that the campaign against bulked-up G.P.A.’s may be coming at their expense.

“The nightmare scenario, if you will, is that you apply with a 3.5 from Princeton and someone just as smart as you applies with a 3.8 from Yale,” said Daniel E. Rauch, a senior from Millburn, N.J.

A stricter grading scale makes it easier to differentiate between Princeton students, as their GPAs now serve as a better signal of ability (at least academic ability). But it does nothing to help in the ranking of Princeton students against students from other schools. A 3.8 Yale student might be equivalent to either a 3.5 Princeton student or a 3.8 Princeton student, but there's no way of telling.

As the Princeton senior cites, it's awkward for students to explain anyway their lesser GPAs when compared against students from other schools. No two GPA systems are the same, but it's hard for potential employers and grad school recruiters to judge applicants fairly with this caveat in mind; what else do they have to go on? Perhaps Princeton is doing its students a disservice by making a 3.8 student at another school look like only a 3.5 student at Princeton. Some of its students may be denied professional or academic opportunities because of their misleading GPAs, which in turn leads to less achievement by Princeton students and therefore less prestige for the university as a whole. It would be better for Princeton to muddy the GPA waters like all the other schools.

Additionally, grades have only a weak bearing on workplace success to begin with, so it makes even less sense to punish students with marginally inferior academic performance. The only thing grades should communicate is that a student was able to get through an academic program and work diligently. It's doubtful that a 3.8 student is going to be much more successful in the workplace as a rule than will a 3.5 student.

Staying Open in the Snow: Differing Incentives for Workers and Owners

The view outside my apartment at 8 p.m. Wednesday.

Because of record snowfall in the Washington, DC, region, federal offices have been closed for a fourth straight day. However, quite a few private sector businesses have remained open.

To the owner at most large private sector businesses, staying open means making money and closing means losing money (assuming that customers will want to come to his store that day). So the decision to stay open is obvious.

To the worker, getting to work with such poor road conditions and the other inconveniences caused by the snow might not be worth it. But he may take a "loss" for the day--for example, earning only $100 for the day but incurring $200 worth of "costs" (including effort to get there) to do so--in order to keep his job for the long run.

The analysis differs, however, for smaller businesses. For one thing, the owner may also have an active management role, or his job may be very similar to that of his underlings. His calculus is the same as the worker's: he may be willing to forgo the day's profits if it means that he doesn't have to make the drive on snowy roads, either. In addition, the owner of a small business is more likely to have a personal relationship with his workers; it's easier for a CEO to insist that thousands of workers in a faraway branch show up than it is for a small-business owner to order in his workers, who also may be among his closest friends.

So, we would expect large businesses to be more likely to stay open than small businesses during a snowstorm.

If Amazon Can't Advertise Its Low Prices, Why Bother Setting Them?

For this home theater system, Amazon is legally prohibited from displaying its price.

From the New York Times:

Where's the price?

On some pages of e-commerce sites selling products like televisions, digital cameras and jewelry, a critical piece of information is conspicuously missing: the price tag.

To see how much these items cost, shoppers must add the merchandise to their shopping carts — in effect, taking it up to the virtual register for a price check.

The missing prices are part of a larger battle sweeping the world of e-commerce. Wary of the Internet’s tendency to relentlessly drive down prices, major brands and manufacturers — and now, book publishers — are striking back, deploying a variety of tactics and tools to control how their products are presented and priced online.

...

Manufacturers consider the product pages on sites like eBay and Amazon.com to be ads, and they complain whenever e-commerce sites set prices below the minimum price.

This leads the sites to replace prices with notes that say things like “To see our price, add this item to your cart.” One day last week, prices were missing on Amazon.com for an array of products like the Milwaukee Sub-Compact Driver drill kit, a Movado men’s Esperanza watch and an Onkyo 7.2-channel home theater receiver.

Setting aside how this mandate by manufacturers no doubt hurts consumers, I'm interested why Amazon and other retailers don't just charge whatever the advertised minimum is. Going any lower seems counterproductive, as it triggers the mysterious "To see our price, add this item to your cart. You can always remove it later" message and this pop-up.

Many customers will no doubt be confused by this process or think it's some sort of scam, and thus walk away.

Amazon sells many books and other items because of its low prices, but low prices are only effective if customers know about them. I would argue that showing whatever the advertising minimum is would generate more sales than charging a lower price that customers can't see, as the latter adds a layer of transactions costs to the purchase.

It seems very unlikely that customers will add the same item to their virtual carts on several different sites in order to compare prices and then buy the item wherever it's cheapest.

After You Die, Will Your Blog Enter the Public Domain?

(It's a silly question, I know.)

In the United States, a copyright expires 70 years after the death of the author (source). With the relative infancy of the Internet, we're still several decades away from the day when practical debate is required over whether royalties are still due to the descendants of bloggers born more than a century before them.

A couple of issues drove the economics of public domain books in our history: the monopoly pricing of original content and the transactions costs of tracking down the descendants. How does these things change in the Internet age, especially for content like blogs?

Milking the Monopoly
If only I can publish copies of "Moby Dick," I can charge monopolistic prices to maximize my profits; this is assuming that people cannot easily steal the work through photocopying, downloading illegal Kindle copies, or whatever other method (I'll drop this assumption later). Some people will choose not to buy "Moby Dick" at my exorbitant prices, but I will make much more money from the people who do.

If everyone can publish copies of "Moby Dick," price falls to marginal cost, or the cost of physically making the book. If I can print and distribute a copy for $5 and choose to charge $6, someone else can enter the market and undercut my price to $5.50. And on and on until the price approaches $5.

To undermine my previous point a bit, I've noticed that several James Patterson books on Amazon are selling for roughly $10 a pop for new paperbacks, as are most editions of "Moby Dick" (though there are a few exceptions, around $5 a copy). So one has to wonder how much of a markup publishers can get away with; after all, no book is truly a monopoly, as it must compete against other books. Yet the copyright holder's markup is apparent in the Kindle market, as most eBooks are $9.99 but all the classics are free (as opposed to traditional books, each copy requires only a trivial cost to distribute).

Blogs do not face this same marginal cost dynamic. Assuming that Web hosting costs are negligible or free, each "copy" of a blog post that is distributed costs the writer nothing (after he has taken the time to write it) and the reader nothing. Each page view has a slightly positive expected profit, as some of the readers will click ads and generate revenue, so there's theoretically still some money for the descendants to collect. But because neither the publisher nor the reader has to pay to distribute or access the content, a public domain law seems a moot point: there is no monopolistic price to combat. It seems sensible to let the descendants continue to collect the advertising revenue (keeping in mind the caveats I present in the next section). What are the alternatives? We could give the ad revenue to charity or put it toward the national debt. Or the ads could be removed, but that would require a lot of legwork (how hard will it be to modify Web sites made 80 years earlier?) and make the reader's experience only marginally better.

Some online content, such as articles in scholarly journals, are behind paywalls and thus do not operate the same way. The classic public domain model used for books seems most appropriate here: under the spirit of our current laws, someone shouldn't be able to keep content behind a gate forever. Of course, as digital "theft" becomes easier and easier, perhaps the content-behind-the-wall method will cease to be viable anyway.

Much blog content is news-orientated, so it's doubtful that most of it will be useful, or popular enough to generate substantial ad revenue, decades from now. How many posts are being written every day about the new iPad, and how many of them are still going to be read regularly 10 years from now?

Tracking Down the Descendants
Throughout history, keeping track of descendants generation after generation has been difficult. Additionally, as time goes on, a common ancestor can have a multitude of descendants: imagine if you have two children, who each have two children, who each have two children, etc. Both of these reasons are also good economic justifications for our current system. Most people would agree that there shouldn't be several thousand people getting royalty checks because they are distant descendants of Socrates, and even if they were entitled to it, the administrative costs of keeping up with so many heirs would probably eat up most of the purse anyway.

The Internet solves the former problem but not the later. It's easy to imagine a Web site where authors could designate heirs, who in turn could designate future heirs, and so forth. But we have not solved the second problem: should the revenue from a centuries-old blog be split among hundreds of people so extremely far removed from the original author? If not, what else should we do with the money?

Of course, it's possible that technology and our world will change so dramatically in the coming decades that none of these issues will be applicable, in ways we wouldn't be able to understand from our current vantage point.