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Monday, June 27, 2011

Today's Business & Economics Chapter

 
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Business & Investing
Tuesday June 28, 2011
Freakonomics [Revised and Expanded]: A Rogue Economist Explores the Hidden Side of Everything
by Steven D. Levitt
 

What Do Schoolteachers and Sumo Wrestlers Have in Common?

Imagine for a moment that you are the manager of a day-care center. You have a clearly stated policy that children are supposed to be picked up by 4 P.M. But very often parents are late. The result: at day's end, you have some anxious children and at least one teacher who must wait around for the parents to arrive. What to do?

A pair of economists who heard of this dilemma—it turned out to be a rather common one—offered a solution: fine the tardy parents. Why, after all, should the day-care center take care of these kids for free?

The economists decided to test their solution by conducting a study of ten day-care centers in Haifa, Israel. The study lasted twenty weeks, but the fine was not introduced immediately. For the first four weeks, the economists simply kept track of the number of parents who came late; there were, on average, eight late pickups per week per day-care center. In the fifth week, the fine was enacted. It was announced that any parent arriving more than ten minutes late would pay $3 per child for each incident. The fee would be added to the parents' monthly bill, which was roughly $380.

After the fine was enacted, the number of late pickups promptly went . . . up. Before long there were twenty late pickups per week, more than double the original average. The incentive had plainly backfired.

Economics is, at root, the study of incentives: how people get what they want, or need, especially when other people want or need the same thing. Economists love incentives. They love to dream them up and enact them, study them and tinker with them. The typical economist believes the world has not yet invented a problem that he cannot fix if given a free hand to design the proper incentive scheme. His solution may not always be pretty—it may involve coercion or exorbitant penalties or the violation of civil liberties—but the original problem, rest assured, will be fixed. An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation.

We all learn to respond to incentives, negative and positive, from the outset of life. If you toddle over to the hot stove and touch it, you burn a finger. But if you bring home straight A's from school, you get a new bike. If you are spotted picking your nose in class, you get ridiculed. But if you make the basketball team, you move up the social ladder. If you break curfew, you get grounded. But if you ace your SATs, you get to go to a good college. If you flunk out of law school, you have to go to work at your father's insurance company. But if you perform so well that a rival company comes calling, you become a vice president and no longer have to work for your father. If you become so excited about your new vice president job that you drive home at eighty mph, you get pulled over by the police and fined $100. But if you hit your sales projections and collect a year-end bonus, you not only aren't worried about the $100 ticket but can also afford to buy that Viking range you've always wanted—and on which your toddler can now burn her own finger.

An incentive is simply a means of urging people to do more of a good thing and less of a bad thing. But most incentives don't come about organically. Someone—an economist or a politician or a parent—has to invent them. Your three-year-old eats all her vegetables for a week? She wins a trip to the toy store. A big steelmaker belches too much smoke into the air? The company is fined for each cubic foot of pollutants over the legal limit. Too many Americans aren't paying their share of income tax? It was the economist Milton Friedman who helped come up with a solution to this one: automatic tax withholding from employees' paychecks.

There are three basic flavors of incentive: economic, social, and moral. Very often a single incentive scheme will include all three varieties. Think about the anti-smoking campaign of recent years. The addition of a $3-per-pack "sin tax" is a strong economic incentive against buying cigarettes. The banning of cigarettes in restaurants and bars is a powerful social incentive. And when the U.S. government asserts that terrorists raise money by selling black-market cigarettes, that acts as a rather jarring moral incentive.

Some of the most compelling incentives yet invented have been put in place to deter crime. Considering this fact, it might be worthwhile to take a familiar question—why is there so much crime in modern society?—and stand it on its head: why isn't there a lot more crime?

After all, every one of us regularly passes up opportunities to maim, steal, and defraud. The chance of going to jail—thereby losing your job, your house, and your freedom, all of which are essentially economic penalties—is certainly a strong incentive. But when it comes to crime, people also respond to moral incentives (they don't want to do something they consider wrong) and social incentives (they don't want to be seen by others as doing something wrong). For certain types of misbehavior, social incentives are terribly powerful. In an echo of Hester Prynne's scarlet letter, many American cities now fight prostitution with a "shaming" offensive, posting pictures of convicted johns (and prostitutes) on websites or on local-access television. Which is a more horrifying deterrent: a $500 fine for soliciting a prostitute or the thought of your friends and family ogling you on www.HookersAndJohns.com?

So through a complicated, haphazard, and constantly readjusted web of economic, social, and moral incentives, modern society does its best to militate against crime. Some people would argue that we don't do a very good job. But . . .

(Continues...)

 
 
 
 
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BookDaily Update

 
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BookDaily Update
Tuesday June 28, 2011

Black Angel

By Fran Thomas, Jr
ISBN: 9781461129936
 

Prologue

“Just a quick recon, Sergeant - no fooling around out there, no cowboy shit. There'll be hell to pay if something goes wrong. We're here to advise.” “Yes, sir.” “I mean it. Devil take ya if ya get hit, Berning - we're not even supposed to be in the damned field!” The men were two of about eight hundred U.S. military advisers in South Vietnam to help prop up Ngo Dinh Diem's armed forces, the Army of the Republic of Vietnam (ARVN). His CO's warning buzzed in First Sergeant Ernest James Berning's skull now; it had been there all morning. Why? It was a simple recon mission, a ride in the chopper, maybe snapping a couple of pictures, though the high altitude ...

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Corinthia Falls

By Kim Hutson
ISBN: 9781432771676
 

Timber’s Story

August

It was eleven o’clock on Sunday morning in 1981. The bell tower on Corinthia Fall’s old church welcomed our local faithful and spiritual, the traditional and established, the dutiful as well as other self-comprised souls. The late morning sun hovering over the small northeastern Oklahoma town was piercing and oppressive. The congregation greeted one another upon entrance with simulated enthusiasm as each proceeded to the simple security of their customary and long recognized seating arrangement. The pianist and organist struggled mightily to play the prelude hymn in unison.

By the way, Timothy Oaks is my Christian...

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Know Your Rights

 
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Tuesday June 28, 2011
 

Interested in Having Your Book Featured Next to Bestsellers?

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Know Your Author Rights

Rick Frishman and Robyn Freedman Spizman

Editor's Note: Today's Author Update is excerpted from "Author 101: Bestselling Secrets from Top Agents"

When authors write books, they’re automatically launched into the rights business. The moment authors create a piece of writing, certain exclusive rights arise regarding how that writing can be used. Those rights are called copyright rights and they come into being when authors first express their ideas in a tangible form. Tangible form is when the idea is expressed in writing, on tape, film, and so on. As soon as the writing is put into tangible form, no one can copy or distribute it without the writer’s consent.

When writers hire agents, they primarily employ them to negotiate for the license or sale of book or volume rights to one or more publishers. Who controls what rights—and for how long—is at the heart of the agent-publisher negotiation. So in this chapter we’re going to tell you a little about authors’ rights.

NOTE: The information that follows in this excerpt is provided in this book solely to introduce you to the difficult and confusing area of copyrights and copyright law. It is specifically NOT intended to teach you or to advise you about copyright rights and/or copyright law. Do not attempt in any way to take any action regarding your copyright rights without first obtaining the advice of a copyright attorney!

Bundle of Rights

Copyrights consist of a bundle of five legal rights. Those rights can be divided and sold to one or more people for different periods of time and for use in different territories or media. Many agents excel at selling authors’ rights to publishers, but they may not be expert when it comes to making the most of their clients’ other rights.

The five copyright rights are.

1. The right of reproduction. This means that when an author writes a book, he or she has the exclusive right to publish, photocopy, download or otherwise duplicate it. The term copyright comes from the words copy and right. So you, as an author, have the exclusive right to copy the book you write and the writing in it.

2. The right to make derivative works. If you write a book, you have the exclusive right to make works based on your book in other formats. For example, condensed versions, revised editions, translations, illustrated versions, and comic-book versions.

3. The right to distribute the work and to make the first publication. As the author, you alone have the right to distribute your work to others and to be the first one to publish what you wrote. When you sign with a publisher, you license it to exclusively reproduce and distribute your book.

4. Right to perform the work. If you write a book, you also have the exclusive right to recite it publicly or to perform it as a play, dance, or even a puppet show.

5. The right to display the work. As the copyright owner, you have the exclusive right to publicly show images of or from your book by means of film, TV, or other device.

So, when you’re about to enter into a book contract, think in terms of copyright rights, because your publishing house will! When publishers agree to publish your book, they will want as many rights as they can get for as little as they have to pay. Conversely, you and your agent will try to reserve as many of those rights for yourself and make as much money as you can for the rights you convey to your publisher.

Entering into a publishing contract should not be taken lightly. Potentially, it is a very long-term relationship. If a book is successful, your publisher and you, or your heirs, could be bound together for the life of the copyright. This could mean for the rest of your life plus another seventy years.

“Keep in mind that most publishing contracts are not take-it-or-leave-it propositions; the terms can be negotiated,” literary attorney Lloyd Jassin notes. “However, knowing what to ask for is critical. Use an agent or attorney who understands the parameters of the typical publishing deal to negotiate your contract. Working through an agent or attorney allows you to preserve your creative relationship with your editor.”

Editor's Note: Today's Author Update is excerpted from "Author 101 Bestselling Book Publicity: The Insider's Guide to Promoting Your Book--and Yourself"

Author 101 Bestselling Book Publicity: The Insider's Guide to Promoting Your Book--and Yourself

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The Daily Stat: Having Too Many Stars Can Hurt a Team

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JUNE 27, 2011
Having Too Many Stars Can
Hurt a Team
Teams with lots of high-status performers can be more effective than other groups—but only up to a point. In a study by Boris Groysberg and Jeffrey T. Polzer of Harvard Business School and Hillary Anger Elfenbein of Washington University, effectiveness of teams of Wall Street researchers was at its maximum when 65.1% of the analysts were "stars." Beyond that, the effectiveness (as rated by clients) dropped off. The authors say group members' attempts to boost their status may disrupt such vital processes as information sharing.
Source: Too Many Cooks Spoil the Broth: How High-Status Individuals Decrease Group Effectiveness
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Chitika