EconAir

Introduction The United States has been the world’s only superpower since the collapse of the Soviet Union in 1991.   In some ways it is more difficult to manage foreign policy without concentrating on one big rival. The United States is vastly stronger in military strength than any possible coalition of enemy forces.   But since 9/11 we are feeling less secure despite huge military and domestic security expenditures.   Our military and national security expenditures of around $1.1 trillion are greater than the military expenditures of next ten countries combined (and most are allies).   This is a consequence of a professional military, a result of eliminating conscription after the Vietnam War, and the highly technical (capital intensive) nature of American military forces and strategy.   There is almost no national debate on U.S. military interventions in other countries.   One reason is that most Americans have no direct involvement; they see the professional m

DEFINITION OF A BILATERAL OLIGOPOLY Models of market structure assume that the demand side is represented by a large number of buyers.  The structure of the market, and the assumed market outcomes, depends on the number of suppliers and how they compete.  Suppliers either post one price or exploit their knowledge of buyer categories by using price discrimination.  Despite the comments about the key role of consumers in determining economic performance, consumers are fairly passive when the discussion focuses on imperfectly-competitive industries.  But many markets are not structured this way; the buyers are not passive consumers but large corporations that do not passively accept suppliers’ prices.  Net prices are actively negotiated.  These markets are often bilateral oligopolies. In a bilateral oligopoly the buyers are not an undifferentiated mass of consumers but rather a small number of purchasing agents or professional buyers representing large purchasers.   T

I reread Alice in Wonderland last year. I’ve been reading a lot of weird books in the last two years but Alice in Wonderland is the weirdest. It’s like a children’s story written by Franz Kafka. The book and its images continue to resonate. I’ll skip the cheap shot of recalling the Mad Hatter’s Tea Party because a lot of recent commentators have already used it. Also, there’s a serious idea in game theory called the Red Queen Effect, even a whole book about it by Matt Ridley. (Any book by Matt Ridley is recommended.) But the time Alice in Wonderland really resonated was the 1960s. The following are the lyrics from the group and the song that was virtually the anthem of the Berkeley/San Francisco counterculture. It was written by the group’s lead singer, Gracie Slick. "White Rabbit" by Jefferson Airplane One pill makes you larger And one pill makes you small And the ones that mother gives you Don't do anything at all Go ask Alice When she's ten