Author Archive

Infinite Value?

January 23, 2007

Last night my professor claimed that there was no amount of money that he would accept in exchange for losing his arm.  I think he may have even said his value for his arm was “infinite”. 

If this is what he meant, I have trouble believing this to be true.  If so, it would suggest that he would pay me any amount of money if I threatened to cut his arm off.  The expected value of losing infinite value is certainly worse than all of the money in his bank account.  Or, for example, it would imply that he never leaves the house because of the small, but very real, risk of losing a limb in some freak accident.  It wouldn’t be worth it.


Stewart on Economists on the Minimum Wage

January 23, 2007

In the current issue of Econ Journal Watch, our own Stewart Dompe and Dan Klein have an excellent article titled Reasons for Supporting the Minimum Wage: Asking Signatories of the “Raise the Minimum Wage” Statement. (pdf)

Minority Report and the Hand Formula

January 17, 2007

Tom Cruise’s sci-fi film Minority Report portrays a world where murders can be seen in advance and prevented. Thanks to the “pre-cogs” who make this possible, Washington D.C. of 2052 has not had a murder in six years. The only attempted murders to occur now are those taking place in the heat of passion; intentional plans to murder are easily stopped long before they happen. Individuals are arrested by the Department of Pre-Crime and punished with many years in a comatose state.

It seems that the disturbing twist to this film is that individuals are punished for horrible crimes that they had yet to commit. The movie attempts to draw forth insights about free-will and punishment of people’s thoughts rather than actions. The more I think about it, however, the more disturbing twist to the story is the failure to heed the Hand Formula.

The Hand Formula is a calculus of negligence:”The Hand Formula finds negligence when the actor’s burden (B) is less than the probability (p) of harm, multiplied by the degree of loss (L). B < p x L .”

The Hand Formula can easily be used as a guide for punishing crimes. To dissuade a particular crime, the legal system can manipulate either the amount of punishment or the probability of apprehension to arrive at an appropriate price for committing the crime.

The basis of Minority Report is that that the probability of apprehension for murder is 100%. However, if murderers are always stopped and apprehended before they happen, then the punishment should approach zero.

Perhaps what is disturbing about Minority Report are not the questions of free-will and cognition that it raises but rather the deviation from rules of efficiency that the lengthy punishment seems to imply.

Imagine a world where “pre-cogs” stop murders 100% of the time and the “pre-criminals” are put in a “kill-tank” (similar to a drunk-tank) for the duration of a day. Is this disturbing? I think not. The rare instances in people’s lives when they lose control are stopped before serious damage is done. Murders, both intentional and those of passion, do not occur. This sounds like a pretty nice criminal system, and it doesn’t seem (at least not to me) to carry the aversion that the movie’s system provokes.