Two seemingly similar parking lots at Wrightsville Beach, North Carolina, couldn't be more different in the emergent behaviors they foster. From the orderly lines of the 85-space lot to the chaotic dynamics of the smaller 19-space circular lot, discover how price rationing, queue formation, and transaction costs play critical roles in these everyday systems.

Things take s a quirky turn with the arrival of a man in a pork pie fedora who disrupts these parking norms, buying spaces directly from beachgoers. This unconventional behavior prompts a deeper discussion on the breakdown of social rules and the challenges of maintaining order when outsiders intervene.

• Wrightsville Beach Parking Information
• Locke and Property
• Porkpie Fedoras, if you NEED one now!
• Elinor Ostrom and Property Norms

You can follow Mike Munger on Twitter at @mungowitz

The method of much of social science is "comparative statics." There's an amazing natura experiment going on, after Hurricane Maria changed the environment for the rhesus macaques of Cayo Santiago. Sometimes, you need a simulation to understand something is only obvious after the fact. These primates, known for their fierce competition and rigid hierarchies, expanded their social networks and reduced aggression to endure the island's new, harsh environment.

Plus, a politically incorrect TWEJ, and an interesting letter.

• NYT Cayo Santiago story
• A short piece on "anti-market atavisms" and Hayek's insights.
• Why you can't get a reservation at a restaurant...
• News story about "Monkey App"
• Book'o'da week: Peter Boettke, Erwin Dekker, and Chad Van Schoelandt, editors, Toward a Hayekian Theory of Social Change. https://rowman.com/ISBN/9781666937138/Toward-a-Hayekian-Theory-of-Social-Change

You can follow Mike Munger on Twitter at @mungowitz

Why would a baseball stadium limit the number of $1 hot dogs per customer on Dollar Hot Dog Night? Find out as we work on this intriguing question posed by a curious high school student named HJ. Through the lens of transaction costs, we reveal how these promotional events are less about selling hot dogs and more about enhancing the overall (cheap!) game experience to attract new fans. Using a real-life example from a recent Mets game, we explore how such promotions can change the crowd dynamics, boost attendance, and ensure a positive atmosphere for everyone, even when things get a bit rowdy.

And the TWEJ: A dad joke, because of course it is

Three apple pie prices (for one pie!)

• Andy Anand $70
• Publix $7.75
• Joe’s Stone Crab $130

Samuel Bagg's book The Dispersion of Power (Oxford)

You can follow Mike Munger on Twitter at @mungowitz

I have been interested lately in a paper Bill Keech and I were working on a decade ago,

It was called "The Anatomy of Government Failure."

Was AC Pigou the first "Public Choice" theorist?

There are two transaction costs problems in the background:
1. Information asymmetries and the problem of ignorance
2. Incentive problems and institutional design

Market failure is actually a thing. And it can be complicated: Kleinman and Teles, "Market and Non-Market Failures."

But so is government failure. There is no reason to expect government action to be Pareto Optimal.

The problem is that every flaw in consumers is worse in voters!

It could even be argued (I did!) that a "good" industrial policy is impossible in a democracy.

Book o'da week: The Next American Economy: Nation, State, and Markets in an Uncertain World . 2022, Encounter Books. by Samuel Gregg.

You can follow Mike Munger on Twitter at @mungowitz

What if crossing a mere corner of private land could land you in legal hot water? This episode tackles the thorny issue of corner crossing, where public and private lands meet at a single point, creating potential trespassing conflicts. We'll dissect Dave Schmitz's insights on the limits of property rights and the Roman law doctrine of ad coelum, which extends property rights from the heavens to the earth's core. Through landmark cases like Hinman v. Pacific Air Transport and Jacques v. Steenberg Homes, you'll gain a deeper understanding of how airspace and land use rights have evolved.

Links:

• Corner-crossing https://www.casebriefs.com/blog/law/property/property-law-keyed-to-singer/trespass-and-public-rights-of-access-to-property/jacque-v-steenberg-homes-inc/
• Corner-crossing update https://wyofile.com/ranch-owner-corner-crossing-would-erase-billions-in-private-property-value/
• More on corner-crossing https://oilcity.news/crime/court/2024/05/14/who-are-the-judges-hearing-tuesdays-corner-crossing-appeal/#:~:text=The%20panel%20for%20the%2010th,property%20in%202020%20and%202021.

• Hinman v. Pacific Air Transport https://casetext.com/case/hinman-v-pacific-air-transport
• Jacques v. Steenberg Homes: https://www.wicourts.gov/sc/opinion/DisplayDocument.html?content=html&seqNo=17010

Book: Jeffrey Rosen, The Pursuit of Happiness: How Classical Writers on Virtue Inspired the Lives of the Founders and Defined America. Simon Schuster.

https://www.simonandschuster.com/books/The-Pursuit-of-Happiness/Jeffrey-Rosen/9781668002476

You can follow Mike Munger on Twitter at @mungowitz

Can a single $100 bill solve an entire town's debt crisis? This riddle is a window into transaction costs. I rely on Jeffrey Rogers Hummel's insights, adding a few thoughts of my own.

And a cool letter: Ever wondered why you haggle for a car but not for your morning Starbucks's coffee?

Plus, a book recommendation: Nobel Prize-winning economist Edmund Phelps' "My Journeys in Economic Theory," a compelling read that blends economic insights with political theory.

Links:

• David Henderson gives a statement of "the riddle"
• J.R. Hummel's web site
• Similar story, from LvMI

Haggling:

Sebastian Schweighofer-Kodritsch, "The Bargaining Trap," Games and Economic Behavior, November 2022, v. 136, pp. 249-54.

Book recommendation:

• Edmund Phelps, My Journeys in Economic Theory. Columbia University Press. https://cup.columbia.edu/book/my-journeys-in-economic-theory/9780231207300

You can follow Mike Munger on Twitter at @mungowitz

What if understanding the hidden costs in every transaction could revolutionize how we see economics? Stephen Medema of Duke University opens up about his academic pivot from computational tax policy to the history of economic thought, weaving in tales of detective-like intrigue and the thrill of uncovering the makers and movers behind economic theories.

Beginning with John R. Commons' critical insights, and moving through Ronald Coase's focus on transaction costs as the critical difference among institutions, we explore how these issues shape our understanding of efficiency and the "If markets are so great, why are there firms?" Don't miss four new economics jokes (one is lawyer joke, in honor of common law!), my book recommendations, and get psyched for a summertime return to shorter, more frequent episodes.

Meaning of "Kaleidic": From Roger Garrison https://webhome.auburn.edu/~garriro/r8lachmann.htm

Letters:
Corner Crossing:

• https://www.nytimes.com/2022/11/26/business/hunting-wyoming-elk-mountain-access.html?searchResultPosition=1
• https://www.wyomingpublicmedia.org/natural-resources-energy/2024-05-13/corner-crossing-case-back-in-court

Books:
•Glenn Loury, Late Admissions: Confessions of a Black Conservative. https://wwnorton.com/books/9780393881349
(Econtalk Podcast on the Loury book: https://www.econtalk.org/glenn-loury-tells-all/ )
•Kevin Munger, The Youtube Apparatus, from Cambridge Essentials. https://www.cambridge.org/core/elements/youtube-apparatus/36600D69788530F805C650B70976A585

You can follow Mike Munger on Twitter at @mungowitz

We embark on a journey through the lenses of Hume, Smith, and Coase, piecing together the roles of observation and empirical study in shaping our understanding of societal conventions and moral philosophy. David Schmidtz recounts a defining moment from his academic path, sparking a robust discussion on the fusion of economics with moral considerations in the realm of ownership and resource distribution.

The discussion with David delves into the essence of property ownership, dissecting what it means to hold rights over something as abstract as an idea or as concrete as land. We grapple with the notion that property is not just a "bundle of sticks" but a set of societal constructs, born from necessity and shaped by our collective desire for harmony. Through examples of conflict resolution and the negotiation of public and private interests, such as eminent domain and navigation easements, we confront the delicate dance between individual autonomy and the greater good. The philosophical undercurrents of property law are laid bare, revealing the presumption in favor of liberty in those deep waters.

The "Desert Town" source: https://www.cambridge.org/core/books/abs/elements-of-justice/desert/268B6C7A9B17949572933A4DAA0CAB09

Wall Street Journal article on Costco gold purchases: https://www.wsj.com/finance/investing/selling-costco-gold-bars-f14e966f

Biden DOT rule on airline refunds:

• https://www.transportation.gov/briefing-room/biden-harris-administration-announces-final-rule-requiring-automatic-refunds-airline
• https://abcnews.go.com/Politics/airlines-give-automatic-refunds-canceled-flights-delayed-3/story?id=109573733

Lynne Kiesling on The Essential Ronald Coase, Fraser Institute.

Books:

C. Johnson, R. Lusch, Schmidtz, Commercial Society: A Primer on Ethics & Economics (Rowman & Littlefield).
Bryan Caplan and Ady Branzei. Build, Baby, Build. Graphic novel just published by the Cato Institute

You can follow Mike Munger on Twitter at @mungowitz