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Author: Al Slivinski

Fast-food pricing I can’t explain   

Written by Al Slivinski on . Posted in Dining out, London. No Comments on Fast-food pricing I can’t explain   

Time to talk burgers again, folks.

Two facts to start with: One, I almost never eat at fast-food restaurants, and two, I used to teach two different econ courses – Managerial Economics and Industrial Organization – in which I tried to teach students the underlying motivation for a host of different pricing strategies by sellers. The basic lesson was easy: pricing strategies are implemented because they result in higher profits. The interesting part is figuring out why the various pricing strategies could, despite surface appearances, increase a seller’s profits.

A week or so ago I went into the old building to attend a workshop in my old Department from noon to 1, and afterwards, having not managed any breakfast, I was hungry. The student centre just next door has a variety of fast-foody outlets, so, knowing I planned to be around until 5pm to attend another event, I figured I should break my usual no-fast-food habit and go get a burger.

There is an outlet there called The Fixx that sells burgers, poutine and side dishes. I went to their counter and ordered a burger and some fries to take back to my office. I was asked if I wanted a beverage, I said no. When I went to pay, the nice cashier lady looked at my slip and said ‘this is going to cost you more than if you ordered a drink, too, and made it a combo. Do you want to go back and get a drink?’

I said no thanks, seeing no good reason to be induced into consuming things I don’t want. However, assuming the cashier was correct, and she should know, I am struggling to explain this pricing by The Fixx.

I am aware that fast-food outlets love combo pricing, but I assumed that meant that if I ordered the drink with my burger and fries, combo pricing meant that the drink added less to the cost of my meal than the stand-alone price of the same drink. So long as the seller makes any revenue above the cost to them of the drink, this adds to their profits.  Fine, easy-peasy. I get it.

However, the cashier’s statement says that The Fixx makes more money from me if I don’t add the drink to my order: they get more revenue from me, and they save the cost of providing the drink.

How does this combo pricing increase their profits? That is, why do they want to induce me to add a drink to my order with a pricing scheme that earns them more profit if I don’t buy the drink?

One possibility is that this strategy is actually designed to induce me to add an order of fries to a drink-and-burger-only order. I don’t know that the price of a burger and drink is higher than the ‘combo’ price of burger, drink and fries. If not, then the combo pricing may just be targeted at burger-and-drink buyers, and if there are few burger-and-fries buyers like me, that could perhaps still be profitable for the Fixx.

Another possibility lies in the fact that, unlike many of the outlets in the Student Centre food area (e.g. Subway, Starbucks) The Fixx is a UWO-developed food outlet. According to this report from 2018,

“A concept developed in-house, The FIXX prepares burgers made from 100-per-cent Canadian seasoned ground beef – gluten-free and with no fillers, additives or hormones. Located where Harvey’s had been for 21 years, The FIXX is where customers can choose from a variety of toppings including guacamole, pico de gallo, caramelized onions, sautéed mushrooms or even a fried egg.”

So, perhaps the simple explanation is that Hospitality Services at UWO is not interested in profits; rather, they badly want people to drink more fluids. I kinda doubt that, but I have no evidence that it’s not true.

However, if profit-making fast-food outlets do the same kind of combo pricing I experienced at The Fixx, I am back to Square One in looking for an explanation. If anyone can tell me if that is so out there in the wider burger-franchise world, I would appreciate it; as I said, I don’t eat at fast-food restaurants much.

I certainly do not plan to go over to The Fixx again and order just a burger and drink to find out if my first explanation is plausible, either –  which brings me to the second thing I (re)-learned on my burger mission.

Staffing and quality

As the above-quoted Western Snooze piece notes, the burger predecessor to The Fixx in the Student Centre was a franchise outlet of Harvey’s. It, along with the other franchise operations on campus are not like the off-campus franchises in (at least) one important way. They use the company logos and offer (mostly) the same menu as off-campus outlets of each company, but are not staffed by pimply-faced young folk being paid the minimum wage.

When UWO decided many years ago to get rid of most of their own food preparation services and instead have franchises provide food in the Student Centre, they made a deal with the union that represented their own food operations workers. Specifically, that its union members would staff those franchise outlets that opened up on-campus.

So, I presume Harvey’s was paid some percentage of the profits or revenues of the on-campus outlet, along with perhaps an annual fixed fee. However, my long experience on campus indicates that staffing by relatively higher-paid union members results in lower quality food and service than one gets in an off-campus outlet of the same company. The burgers  put out by the Harvey’s on campus were lukewarm and chewy, as were the fries. The reason for this is clear – they cooked the burgers most of the way through, let them sit around in a warming pan, then threw them back on the grill briefly when you ordered one. Similarly, fries were mostly cooked, left lying about, and then thrown back into the fryer when ordered. (My first-ever job was at McDonald’s a hundred years ago, I know how this shit works.) This results in shorter wait times for your order, the need for fewer workers (important), and low-quality food.

This always raised for me the following question: was Harvey’s getting paid sufficiently by the university to compensate it for the bad press it was getting from the crappy food being sold in its student centre operation? These food outlets on campus have a local near monopoly – ‘near’ because there is The Wave, an undergrad restaurant and The Grad Club, which both sell somewhat better (non-franchise) food. However, students, faculty and staff do go out to eat with their families off-campus, and those people could not have a good impression of Harvey’s if they ever get food from the on-campus outlet. That’s like 30,000 opportunities for bad publicity for Harvey’s due to this low-quality on-campus franchise.

The explanation here may simply be that the people who might – unlike me – get a meal at an off-campus Harvey’s location understand that their experience at the on-campus location is not a reliable predictor of what it will be like to eat at an off-campus location. If so, there perhaps isn’t much of a bad reputational effect for the off-campus Harvey’s outlets, but in a market (i.e., franchised restaurants) in which it is said ‘uniformity across outlets’ is all-important, this is still a bit surprising to me.

What is not at all surprising to me is that the burger and fries I got from the in-house The Fixx last week were just as lukewarm and chewy as Harvey’s used to put out. I recognized the woman behind the grill who was mistreating my burger as having performed the same service for the Harvey’s outlet back in the day. No worry about off-campus reputational effects here, there are no off-campus Fixx outlets.

So, same poor-quality food at The Fixx as at its predecessor Harvey’s,  but only The Fixx is willing to pay me to drink pop. I think.

 

Sample-based bullshit

Written by Al Slivinski on . Posted in Education, Standards. No Comments on Sample-based bullshit

Standards in general, and in academia in particular, are a keen concern of mine, and I will be writing about them frequently here. This post is about an open letter written by a faculty member in the Department of Computer Science at the University of Regina to the Head of the Department, a letter which he shared in a publication to which I subscribe.

The letter concerns an email sent to all CS students and faculty at UR on August 30, 2023, in which the following sentence appears – “In an effort to provide timely feedback on student work, some of our courses will be moving to a sample-based marking approach.”

The email goes on to explain what that means – that when a student turns in an assignment or test, not all of it will be marked. The parts to be marked will not be revealed until after the marked work has been returned to the students, and their grade will be determined only by that which is marked. So if a test consists of 6 problems, perhaps only three will be marked and feedback provided; the same three for all students.

The reason given for this is the increase in the size of CS classes, driven in turn by an increase in the number of CS majors, said to be nearly 1000 in the email.

The faculty member wrote his open letter to the Head of his Department (Computer Science) decrying this new grading approach, and explaining why he thought it would lead to a decline in academic standards.

I will first just record here that ‘sample-based marking’ as described, is in itself a reduction in academic standards. When I taught at University my assignments and tests were conceived as a whole, different parts of it designed to test different parts of the material, but also different abilities. Some questions could not be answered well without having the ability to write clearly and concisely about something complex, while other questions were designed to test one’s ability to deal with more formal logical or technical issues. To mark or provide feedback on only some aspects of the work is to ignore some part of what the course is about.

I understand well that the idea behind this is that, because the students don’t know up-front which parts of their work will be marked, they still have an incentive to work hard learning all of it. This does not change the fact they will get no feedback on some of their work, a primary point of marking. But in addition, anyone who knows students knows this will lead to a cottage industry in figuring out which parts of work any given instructor is likely to mark, which is not in any way part of what higher education is supposed to teach students.

This policy is, in the end, a further piece of evidence as to what University administrators’ goal is. Get as many students through to a degree as possible, at as low a cost as possible. So far as I can tell, their political masters in Canada are perfectly in agreement with this goal.

This is why sample-based marking is being implemented, rather than the solution suggested by the CS faculty member who objected to it; hiring more faculty to accommodate the growing number of students. Faculty are expensive. And, note that the letter did not indicate that CS students would be seeing a discount on their tuition bill to accompany this sample-based marking initiative.

Imagine a McDonald’s franchise-holder, or local restauranteur, who found themselves with a (delightful) increase in patronage, and responded by filling only part of all food orders, rather than hiring more workers, while charging for everything ordered.

One final note. The original email laying out how this scheme is envisioned working at UR also says that the parts of any student work that are not marked will none the less have solutions posted for the non-marked parts, or they will be gone over in class so as to provide students with the correct solutions. So, there’s your all-around feedback, eh?

Right. In a university atmosphere in which students feel free – indeed, are encouraged – to argue for higher marks for most any reason they can think up, this will open up a whole new area of student appeals. To wit: “ I got the parts of the exam you did not mark nearly perfect, according to your own solution key, so I deserve much more than the 63 I received, which is based solely on the parts you did mark.”…followed by the ever-popular ‘This isn’t fair.’

 

 

Ask Yourself: Do I Feel Lucky? Well, do you…..?

Written by Al Slivinski on . Posted in News Media, Research. No Comments on Ask Yourself: Do I Feel Lucky? Well, do you…..?

 

Bad luck and trouble, two of my best friends – Sam (Lightnin’) Hopkins/Mack McCormick

You can spend a lot of time reading about things that seem social sciencey, but are in fact pure politics. One example of what I’m talking about is the following non-question: what matters more in life, luck or talent?

It’s not a scientific question because 1) luck is impossible to measure, 2) talent is only measured approximately, at best, and 3) there is no scale on which one can put a life to decide the ‘more’ part of the question.

However, political types, by which I mean politicians, advocates, activists and ‘experts’ are happy to go on and on about which matters more, and they are all quite sure they know the answer.

An Opinion piece showed up in the Feb 21 Report on Business section of the Globe on this non-question, titled Rich and successful? It’s likely you’re just lucky. Written by Mark Rank, said to be a Professor of Social Welfare at Washington University in St Louis, the piece is labelled as being ‘Special to the Globe and Mail’, which I think just means that Rank is not on the staff of the Globe.

It was a very annoying article.

Let me explain.

In his piece Rank weighs in on the side of luck in this debate, and I’m not writing to argue against that position; as I wrote, it’s a pointless argument. I’m writing because Rank badly mis-characterizes a piece of academic research in supporting his position. He writes:

“Take the case of who becomes wealthy and who experiences poverty. It turns out that the random factor is very much in play. In a fascinating research article titled Talent Versus Luck: The Role of Randomness in Success and Failure, mathematical physicist Alessandro Pluchino and his colleagues were able to empirically quantify the relative importance of talent versus luck in terms of acquiring great wealth over a 40-year working-age lifespan. What they found was that the most talented people almost never reached the peaks of economic success – rather, the ones most likely to achieve the pinnacle of wealth were those with more average talents but who happened to catch a couple of lucky breaks.”

Before I explain what is wrong here, I doff my hat to Professor Rank for apparently citing some actual research, and for including in his article a link to the paper he is citing. That happens all too rarely.

The above paragraph makes the research of Pluchino and colleagues seem like it is about real people, living ’40-year working-age lifespan(s)’, right? And, it seems that for these ‘people’ it turned out that the ‘most talented people’ were not generally the ones to achieve ‘the pinnacle of wealth’. Rather it was those people with good luck who did well.

That could hardly be further from the truth of what the Puchino article does.

To start with, his statement that Pluchino and colleagues “…were able to empirically quantify the relative importance of talent versus luck…” is flat out wrong. The adjective ‘empirically’ says that they observed people and recorded what they observed to support their ‘luck matters more than talent’ claim. [Merriam Webster – empiric: capable of being verified or disproved by observation or experiment; originating in or based on observation or experience.] They observed no one, they gathered no data about anybody.

In fact, what the Pluchino et al paper does is report on the construction of a mathematical model, in which the authors interpret their purely mathematical result as demonstrating that luck matters more than talent.

However, none of this ‘talent’ they write about is embodied or observed in actual people, nor do they observe the amount of good or bad luck that any real people experience.

Puchino and friends build a model in which the ‘people’ are theoretical entities who do nothing. In the model they are assigned varying levels of theoretical talent by the researchers, and then they are bombarded with theoretical good or bad luck. They do not respond to what happens to them in any way. In fact, in the model, they are not allowed to make any decisions or take any actions – they are automatons. The researchers give these automatons varying levels of ‘talent’, but the same ‘wealth’ (also theoretical) to start out with, then run them through forty fictitious instances of good or bad luck. Having performed those mathematical operations, they observe how much wealth each automaton ends up with. (These forty hits of theoretical good or bad luck is what Rank refers to as a ’40-year working life span’. No one works in the model, either – good or bad things just happen to them. 40 times.)

In addition to this, there is no interaction between the various fictitious automatons. What happens to automaton no. 12 has no influence on, nor is it influenced by, what happens to any other automaton. You know, just like in the real world, where people go through their lives in perfect isolation.

I repeat, there is no actual data about anything collected or observed by these researchers. Thus, there is nothing whatsoever ‘empirical’ about this research, and I leave it to you to consider what this fictitious world of automatons might tell us about luck vs talent out in the real (empirical) world. (Note that because the automatons don’t do anything, the role of diligence, effort, or good decision-making doesn’t have even a theoretical place in this research.)

Puchino and company do discuss other research papers they say provide evidence that luck matters more than other things. These other papers are duly referenced, and the interested reader can go read them and judge for themselves how convincing any of them are. I have not done so, and there is no indication Rank has, either.

The point here is that Puchino and his colleagues provide no empirical evidence that luck matters more than talent, only that it does in their theoretical model, and Rank is wrong to say they do. Professor Rank has mis-used their research in trying to support his own view on this matter in his op-ed column. As a Professor of Social Welfare, I am not surprised that Rank believes luck matters more than talent, but there is no evidence in his article or the Puchino paper to support that view.

Sadly, academics tend to believe that any press is good press, so I doubt Puchino and friends are upset by Rank’s complete misrepresentation of their research in his article.

I was.

 

That Unfriendly Law Thing

Written by Al Slivinski on . Posted in Government, LBOs. No Comments on That Unfriendly Law Thing

Over lunch one day, a friend of mine said to another friend of mine – ‘The law is not your friend’. I am not always in agreement with Friend 1, but in this case I could only say ‘Amen’.

But never mind what I say, the Globe and Mail featured a story on April 12 titled:

 ‘Foreign landlord fails to pay taxes, CRA goes after tenant’

that is eloquent as hell on this very topic.

The story is as appalling as it is instructive. A tenant in Montreal had a landlord who was an Italian resident for tax purposes, and that landlord did not pay the Canadian income taxes owed on the rents he received from said tenant. If ya earned it in Canada, ya gets taxed in Canada. The CRA, noble institution that it is, told the tenant he was on the hook for the unpaid taxes, because he was supposed to withhold 25% of his rent for that purpose. You know, just like you do when you pay those Swedes at Ikea for that sofa you purchased, or pay for that pack of Slim Jims at Mr Kim’s Convenience.

The tenant took the CRA to court over this – Tax Court, natch – and lost.

Here’s my favourite part. Really. Quoting directly from the Globe article, now –

The judge acknowledged “the harsh consequences,” in her decision, but still held the “resident payer,” or renter, liable.

The tenant’s lawyer pointed out that there was no reasonable way for the tenant to even know his landlord was not a Canadian resident for tax purposes. That, of course, was deemed to be no excuse.

My second favourite part is the last line of the G&M piece on this:

The CRA did not respond to requests to comment.

Really? No comment?

However, I am not kidding about my ‘favourite part’, as the judge’s attitude is a perfect illustration of The Central Fact about Large Bureaucratic Organizations (LBOs) – and our legal system is one Really Large BO. Those who are in such an org can always justify to themselves and to the world treating people in any way that is consistent with The Rules of the Org, however inhumane such treatment may be.

The judge could acknowledge harshness, could even shed a tear, perhaps, but, ya know – the law is the law. And, as my friend said, it is not your friend.

 

Following the Hot Hand of Science

Written by Al Slivinski on . Posted in Research, Standards. No Comments on Following the Hot Hand of Science

Anyone vaguely familiar with basketball has heard of the ‘hot hand’ phenomenon. Someone on the team gets a hot shooting streak going, they can’t seem to miss, and their teammates start looking to get the hot-handed player the ball. I played backyard hoops a lot in my youth, and there were (very few) times when it happened to me; every shot I threw up seemed to go in – briefly.

Well, academics got wind of this long ago also, and decided to investigate whether there was anything to it. Yea, sure, players talk about experiencing it, or seeing it, but it could easily be just a matter of perception, something that would disappear into the ether once subjected to hard-nosed observation and statistical analysis.

The canonical paper to do this analysis was published in 1985 in Cognitive Psychology, authored by Gilovich, Tallone and Tversky. The last of this trio, Amos Tversky, was a sufficiently notable scholar that young economists like me were told to read some of his work back in the day. He died young, age 59, in 1996, six years before his frequent co-researcher, Daniel Kahnemann, was awarded the Nobel Prize in Economics. The work the Nobel committee cited in awarding the prize to Kahnemann was mostly done with Tversky, so there is little doubt Tversky would have shared the prize had he lived long enough, but Nobels are, by rule, not given to the dead.

Now, as a research question, looking for a basketball hot hand is in many ways ideal: the trio used data on shots made and missed by players in the NBA, which tracks such data very carefully, and beyond that, they did their own controlled experiment, putting the Cornell basketball teams to work taking shots, and recording the results. Good data is everything in social science, and the data doesn’t get much better than that. Well, bear with me here, this is most of the Abstract of that 1985 paper:

“Basketball players and fans alike tend to believe that a player’s chance of hitting a shot are greater following a hit than following a miss on the previous shot. However, detailed analyses of the shooting records of the Philadelphia 76ers provided no evidence for a positive correlation between the outcomes of successive shots. The same conclusions emerged from free-throw records of the Boston Celtics, and from a controlled shooting experiment with the men and women of Cornell’s varsity teams. The outcomes of previous shots influenced Cornell players’ predictions but not their performance. The belief in the hot hand and the “detection” of streaks in random sequences is attributed to a general misconception of chance according to which even short random sequences are thought to be highly representative of their generating process.”

That is, a player who hits a shot expects he is likely to hit the next one, too. When he does, he files this away as ‘having a hot hand’, but the actual frequency with which he hits the second shot is not actually higher than when he had missed his previous shot. Standard ‘cognitive bias’ causes the player – and fans – to see it that way, that’s all. They remember when the second shot is made more than they remember it being missed.

Damn scientists are always messing with our hopes and dreams, right? No Easter Bunny, no extra-terrestrials in Mississauga, and no hot hand. Is nothing sacred?  Other researchers went looking for evidence of a hot hand over the ensuing years, but it became known in academic circles as ‘the hot hand fallacy’, the general consensus being that it did not exist in the real world of basketball.

33 years later

But wait, it’s now 2018 and a paper by Miller and Sanjurjo appears in Econometrica, the premier journal for economic analysis involving probability and/or statistics. It’s title is “Surprised by the hot-hand fallacy? A truth in the law of small numbers”

Here’s some of what their Abstract says:

We prove that a subtle but substantial bias exists in a common measure of the conditional dependence of present outcomes on streaks of past outcomes in sequential data…. We observe that the canonical study [that is, Gilovich, Tallone and Tversky] in the influential hot hand fallacy literature, along with replications, are vulnerable to the bias. Upon correcting for the bias, we find that the longstanding conclusions of the canonical study are reversed.

It took over 30 years for two economists to figure out that ‘the canonical study’ of the hot hand did its ciphering wrong, and that once this is corrected, it’s findings are not just no longer true, they are reversed. The data collected in 1985 do provide evidence of the existence of a hot hand.

Think about this. In 1985 some very clever academics showed there was no such thing as a hot hand in the real world of basketball, and the academics who peer-reviewed their work agreed with them. Thirty-plus years later, some other clever academics realized that first set had gotten something wrong, and that fixing it reversed the previous findings – and the academics who peer-reviewed their work agreed with them.

Ain’t social science wonderful? A question for which there is excellent data, a situation rarer than hen’s teeth in social science, is investigated and a conclusive answer arrived at, and thirty years later that answer is shown to be not just wrong but backwards.

No one did anything shady here. There was no messing with data, the 2018 guys used the same data used in 1985. A mistake, a subtle but significant mistake, accounts for the turnaround, and it took 33 years to discover it. One can hardly blame the 1985 researchers for not seeing the mistake, given that no one else did for such a long time.

The Lesson?

So, in case my point is not yet obvious, science is not a set of settled facts. Those do exist – sort of – but anyone who understands the process of science even a little understands that settled facts are settled only until they are overturned. And if that is true for such a clean research question as an investigation of a basketball hot hand, think about a more typical social science question in which two things are almost always true. One, the data is not at all what the researchers need, so they make do with what they can actually gather. Two, the right way to analyze that data – among endless possibilities – is a matter of disagreement among respectable social scientists. Following that kinda science will make you dizzy, my friends.

A teaser: think about this social scientific question. It is arguably of more importance than basketball shooting.

Does the availability of bricks-and-mortar adult entertainment establishments have a positive, negative, or no effect on the commission of sex crimes in the surrounding neighborhood?

Whaddya think is the right answer?

For extra credit: what kind of data would a researcher need to gather to answer that question?

Now that’s real (i.e., messy) social science.

Stay tuned, because a couple of economists set out to investigate the question above, and I’ll have a go at what they did and their findings in a future post.

 

 

Streaming service warnings, or…..huh?

Written by Al Slivinski on . Posted in Culture, Language, Standards. No Comments on Streaming service warnings, or…..huh?

A pervasive feature of the 21st century in North America is the deterioration in the quality of written language. Words with a quite precise meanings, like ‘phone’, ‘mail’, ‘email’ and ‘text’ get replaced with the coverall ‘reach out’.

I have access to exactly one internet streaming service, and it provides one of the more amusing examples of language abuse in the warnings it attaches to the previews of the films that one can watch on it.

Now, some of these warnings are easily understandable: Nudity, Sex, Violence – the Classics. Attaching any of these to the preview of a film is particularly useful to any teens or pre-teens who live in the household. I have experience from an earlier era. In my pre-teen years my good Polish Catholic parents subscribed to The Catholic Chronicle, a weekly paper put out by the local diocese. This featured a lot of boring stuff I never read, but it also provided ratings of all the movies that would be shown that week on the 5 or 6 TV stations available in our town. Those ratings told me which channel to put on when I stayed up past my parents’ bedtime on Friday or Saturday night. I was most grateful to the Bishop for this service, even though nothing on TV in that era was actually all that scandalous. It doesn’t really take much to get a 12-year-old boy excited.

However, contemporary warning words beyond that Big Three are rather more mysterious to me.

One warning is Language. Not Profanity, not Cussin’, not even Bad Language, just – Language. That seems to suggest that the characters in the film are going to talk, but there is also another warning of Pervasive Language. I suppose it is useful for some people to know there will be a lot of talking, so they should pause the stream if they have to go to the bathroom.

There is also a warning for Smoking, which I presume is due to our enlightened age realizing that all it takes is for some young’n to see someone smoking in a film to provoke them to go out and steal some smokes and try it themselves.

However, there is also a distinct warning about Historical Smoking. Clearly this would be attached to a film set in the past in which people smoke. What is not clear to me is whether the distinction is made because seeing past smoking is more or less harmful than seeing current smoking. Whichever way it is, why is there not then a warning about Historical Nudity (Adam and Eve?) or Historical Violence (Conan the Barbarian?) or, really – Historical Sex; you know, before people knew how to do it right like we do.

Undoubtedly, the biggest mystery to me is when a film preview comes with this warning:

Some Thematic Elements

Whatever in the hell does that mean? I can’t even make a joke about it.

One might think that, whatever the environment, posting a warning whose meaning is unclear would be a terrible idea. Do we want Environment Canada putting out Alerts that say Something Might be Coming? [I admit, EnvCan’s Special Weather Statements are pretty close to that.]

However, here in the 21st century, when offence lurks around every corner, it may be that posting a warning on a film the meaning of which no one understands has value.

Consider this scenario – a subscriber phones up or texts the customer service dept of the service.

Subscriber: “Hey that movie had a blonde-haired woman chasing a blue aardvark around with a flyswatter, that was appalling, I had no idea me and the kids  would be exposed to that. What is wrong with you people?”

Customer Service: “Ah, but Madam, we did make it clear the movie contained Some Thematic Elements.”

Who needs experts – and who needs Al?

Written by Al Slivinski on . Posted in News Media, Research. No Comments on Who needs experts – and who needs Al?

I had planned to follow up my post on the Freeps printing a ‘news’ article in which the only news was a set of comments by one person (link), with one on the use of ‘experts’ in media more generally. Before I could, a regular reader pointed me at a piece in a site called The Hub that covered the same ground. Having read Howard Anglin’s piece carefully, and enjoyed it much, I’ve decided the best thing for me to do is just provide my own readers with a link to it (link).

I can’t see me writing anything better than he did….at least not yet.

Op-Eds in News Clothing

Written by Al Slivinski on . Posted in London, News Media. 1 Comment on Op-Eds in News Clothing

In the mainstream news media, it has long been common practice to distinguish between articles that are reporting news and opinion pieces. However, something that I see turning up with increasing frequency in news outlets are articles that are not labelled as Opinion, but are in fact mostly that. An example of this came up last year in the local London Free Press (aka The Freeps).

The article is titled “Western accused of trying to push aside women’s hockey concerns”, which appeared on page A2 of the Nov 11, 2023 paper edition of the Freeps that landed on my porch that morning. The byline is Jane Sims, a regular reporter for the Freeps.

The story out there in the world that this article refers to is the fact that the UWO women’s hockey team went through a kerfuffle involving the University’s strength-training coach (who worked with all the university’s athletes, apparently) and the team’s own coach. There was an investigation which resulted in the strength coach being dismissed but the coach of the hockey team staying on. Reports in previous editions of the Freeps indicated that not all of the hockey team players were happy with this outcome. This article of Nov 11 occupies 24 column-inches in this edition of the Freeps, making it the longest article in the paper’s Section A not covering some aspect of Remembrance Day. There is some re-stating of what had happened previously in the matter, some other material (e.g., that about 20 players were on the ice for the last practice) that may be new to readers, but what is undoubtedly new in the article is a series of quotes from Garrett Holmes, who is said to be the founder of The Canadian Student-Athlete Association. The website for this organization states the following:

The Canadian Student-Athlete Association is a non profit unincorporated association founded by Western University student-athlete Garrett Holmes on July 20, 2020.   

It serves as the only independent voice for Canadian university and college athletes. 

The article notes that Holmes had written two letters to the UWO president criticizing the university’s handling of this matter, and quotes him repeatedly.

I am citing this article not because I find what Holmes has to say about all this objectionable, but because the article is presented as news, when in fact it is to all intents and purposes an opinion piece that presents the opinions of one person regarding this matter – Garrett Holmes. There is nothing in the article to suggest that Holmes has any more information about what happened than would anyone else who had been reading about it in the Freeps. He has not interviewed anyone at Western so far as we know, nor has he any inside information not available to others. He has an opinion about what happened, as might you, but you didn’t get quoted in the Freeps. The Freeps simply inserts his opinions – and no one else’s – into what is supposed to be a news article. Indeed, the article headline – not typically written by the reporter – suggests that Mr. Holmes’ views about what happened are the entire point of the story.

So I ask, why Mr Holmes’ views, and his views only? Did Ms Sims contact anyone else to get their, possibly differing, views? Did she contact the UWO Prez, or John Doerksen, or the coach herself, or any players? Is there something about Mr. Holmes that makes him uniquely qualified to have his views aired in London’s only newspaper?  He is indeed the founder of the CSAA, and you can visit that org’s website here (link). It lists Mr Holmes as founder, has some info about him, and you can also read there its two-page constitution, and note that it’s Board of Directors is ‘coming soon’ – just as it has been since the Freeps article appeared last year. The constitution’s last line is “This constitution may only be amended by a unanimous vote of the Board.”

There is a larger point here, that ‘news’ articles in many outlets include a lot of what is said or written by ‘advocates’, ‘activists’ and ‘experts’ . If Mr Holmes is an ‘expert’, the standards for that designation by the Freeps seem kinda low to me.

Moreover, if a media outlet is going to quote such people, the outlet has to choose which of the many available ‘experts’ to quote, and doing so necessarily inserts what are most typically no more than opinions into a news article.

By the usual conventions, this article is news rather than opinion because it does not include the opinions of Ms Sims, or anyone else who works for the Freeps, such as the Editorial Board. But quoting one and only one other person’s opinions moves the article into opinion none the less, in my view. Consider that if she wanted, Ms Sims could insert her opinions into any article just by finding an ‘expert’ or ‘advocate’ whose opinions she shares and quoting only them. I’m not saying this is what happened here, but still, this news story is really mostly opinion, because it mostly ‘reports’ the comments of one person.

One response to this might be – ‘Really, all you’re complaining about is the Freeps being a bit hazy about the line between news and opinion? People can tell the difference between the facts reported in the article and Holmes’ opinions. No big deal, get over it.’

I think it’s a deal. Why did the Freep do this? Why did they not just report on the latest developments in the matter, and leave any comments from Mr Holmes or others to the Op-Ed page? There are always many motives that can be dreamt up to explain any behavior you might observe, but I will hypothesize a particular one in this case.

News media outlets, and the Freeps in particular, want controversy in their news stories, they want to report that people are upset, outraged, deeply concerned, that they are ‘calling out’ other people. Mr Holmes’ comments got in the article, on my hypothesis, because he accuses the university of treating the athletes badly. He is quoted ‘I think it’s clear that some players, if not all, don’t feel it’s a safe environment….’(ellipsis in the original)*.  Mr Holmes cites safety concerns, and that is the great contemporary trigger – there is nothing worse you can accuse a person of in the 21st century than being unconcerned about safety. However Ms Sims came to know about Mr. Holmes and his views, I’m betting that he would have found himself ignored and un-quoted had he commended the UWO admin for its actions in this matter.

*(pseudo-footnote): I would never let my students back in the day get away with a sentence that starts with ‘I think it’s clear that….’ – a topic for another post.

 

Surge Pricing Burgers and the Importance of Reading the Whole Post

Written by Al Slivinski on . Posted in Education, News Media. No Comments on Surge Pricing Burgers and the Importance of Reading the Whole Post

Wendy, Wendy what went wrong? – Brian Wilson and Mike Love

Some weeks back a news story made the rounds that Wendy’s CEO had announced in a call with investors that the company was planning to institute ‘surge pricing’ in its restaurants. You can read a somewhat outraged story about it in the NY Post here, if you missed it. Surge pricing in this case would mean that what you pay for items on their menu would vary with the time of day, as does the amount of business at Wendy’s – busy times would see higher prices. The technology to do this is the installation of menu boards at the drive-thrus on which prices could be changed electronically whenever desired. Presumably the same would be true for the in-store menu boards, also.

Anyway, this generated a mostly predictable amount of outrage from mostly predictable quarters, but I am writing about this not because of the pricing itself, or the outrage, but rather about what happened next. On February 28 the Globe ran an Associated Press article with the headline “Wendy’s says it has no plans to raise prices at busiest times at its restaurants”. Similarly, CNN’s website (a place I rarely go) ran an article on Feb 28 titled “Wendy’s says it won’t use surge pricing’.

To its credit, CNN also provided a link to the blog post in which Wendy’s supposedly backtracked from its CEO’s original statement to investors about this. You can read that post here also, if you like.

However, what convinced me this was worth writing about myself, was an Opinion article that appeared in my print edition of The Globe and was headed up thusly:

Surge pricing for burgers? Wendy’s was wise to reject it

Woonghee Tim Huh and Steven Shechter

Special to The Globe and Mail – Feb 29, 2024

Woonghee Tim Huh is professor and chair of the operations and logistics division at the UBC Sauder School of Business and the Canada Research Chair in operations excellence and business analytics.

Steven Shechter is a professor in the operations and logistics division at the UBC Sauder School of Business and the WJ VanDusen Professor of business administration.

****

You can read the online version of this Globe article here. In it, the UBC guys explain, sort-of, why it was wise of Wendy’s to back off from their original surge pricing plan.

No doubt Bus School profs have superior insight into firm pricing than do I, but it seems to me that it behooves all of us to read what the firm in question has to say about what they are doing before analysing what they are doing. Professors Huh and Shechter do quote from Wendy’s ‘backtracking’ blog post, in the paragraph below, quoted directly from the Profs’ G&M article:

So, on Wednesday, Wendy’s said its dynamic pricing plan would not raise prices during busy times. The plan, the company said, would only “allow us to change the menu offerings at different times of day and offer discounts and value offers.”

Point one: learn to use ellipsis if you only quote part of a sentence. Here is the full sentence from the actual Wendy’s blog from which the good Professors’ partial quote is taken:

“Digital menuboards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.”

Point two: everything that is important about the actual sentence posted by Wendy’s is the underlined part of it at the end which the Professors left out of their own quote. Had they included it, they might have felt compelled to explain how ‘raising prices during peak times’ differs from ‘offering discounts during slower times of day’, and that would be a truly difficult task, because there is no difference.

Back when I taught price discrimination strategies in my Managerial Econ class, I would start with something familiar to everyone – Seniors pricing. You know, you walk into the movie theatre and find something that looks like this:

Admission: $15.00

Seniors (55+): $12.00

(Sidebar: I would ask my students why so many businesses offer lower prices to seniors, and get lots of responses about corporate altruism and Seniors being on fixed incomes. It was fun then to show them that this pricing increased profits for the firms, no altruism needed.)

But I digress.

My point is that one does not see this sign in a theatre:

Admission: $12.00

Under 55: $15.00

There is no bloody difference in the price anyone pays for a theatre ticket with the two different signs, but the second one just seems so mean, while the first one seems nice.

Well, it’s the same with Wendy’s pricing: offering discounts at slow times seems nice, adding a premium when it’s busy, well that’s just mean, and Wendy’s would never do that. They said so, after all.

Minor point: If Wendy’s actually had, in some alternate universe, backtracked from surge pricing, I can’t say there is anything in the Sauder School authored Globe article that convinced me that backtracking would have been wise, the headline notwithstanding. However, since Wendy’s did not backtrack, that point seems not worth pursuing.

Not so minor point: Since it is clear from their own blog post that Wendy’s is going to install these quick-price-change menu boards, the following scenario becomes possible. The drive-thrus already have cameras focused on the cars in the queue, so it would be easy to build a data base of licence plate numbers at each store, or even across stores, so the store could determine, for example, how regular a customer they were serving. If Wendy’s corporate strategists have kept up with what goes on at insurance companies, they could then program their menu boards to show higher prices to frequent drive-thru-diners.

I used to teach students about that sort of ‘disloyalty pricing’, too, because insurance companies do employ it – they call it ‘price optimization’, and last I read, some US States were trying to ban it.

Shattering illusions, that was always my mission.

Coda: Before this post went to press, the WSJ published another article on surge pricing and other restaurant strategies. A quote from that article:

While some consumers tend to resent surge pricing, as Wendy’s discovered last month, they like happy-hour discounts and other deals at slow times, industry consultants said.

Whatever would the world do without industry consultants?

 

Attitudes on Peace, Order and Citizens’ Rights

Written by Al Slivinski on . Posted in Government, News Media, Popular attitudes. No Comments on Attitudes on Peace, Order and Citizens’ Rights

At this point I have lived 63% of my life in Canada (nearly 81% of my adult life), but I was born in the US of A. It is common among my friends – wherever they were born – to argue about the differences, or lack thereof, between Americans and Canadians. Like all general comparisons, they are at best approximations, and not very precise ones, at that. Still, it’s a generally amusing exercise, and it gives us all something to argue about over beer.

However, sometimes things pop up on my radar that seem like they might reveal something useful about such differences. One example appeared in a letter to the Editor of the Globe and Mail just after the Federal court ruling that the Liberal Government of the time was not justified in invoking the Emergencies Act during the trucker convoy protest in Ottawa. It’s hardly surprising that this decision prompted a lot of folks to write to the G&M, but the letter below caught my attention –

Letter to the Editor, G&M print edition, Jan 25, 2024

Re: “Invoking Emergencies Act wasn’t justified and infringed on Charter rights, Federal Court rules” (Jan 24).

Really? What is wrong with this country?

We watched as a collection of bullies occupied Ottawa, breaking parking and noise bylaws and generally being inconsiderate to the local inhabitants. The federal government is now being censured for its decision, which solved the problem with no blood spilled.

We as polite Canadians seem to be at the mercy of individuals who claim that their right to cause mayhem trumps our right to peace, order and good government.

Signed, etc.

—

I immediately wrote a (sarcastic, I admit) reply to this letter and sent it to the G&M Editors, which of course they did not print. I mean, really – the three sins of the protesters you can name are breaking parking and noise by-laws and being inconsiderate, and that to you is sufficient grounds for the government to invoke the Emergencies Act and start demanding banks turn over account information? Really?

I suspect if you asked 100 Canadians and 100 Americans whether they agreed with the letter-writer’s position, you would get a higher percentage agreeing among the Canadians than among Americans, but I’m not confident that the difference would be all that large. My suspicion is that 21st-century citizens of all the advanced democracies are on average more concerned with peace and order than with any threat to their rights as citizens. That is, to be sure, no more than a hunch, based on being on the planet a long time. If anyone knows of good research on Can-Am differences in attitudes about such matters, I would love to get references.

Young, Rogan and the Cost of Principles

Written by Al Slivinski on . Posted in Popular attitudes, Standards. No Comments on Young, Rogan and the Cost of Principles

Came across an article in the Wall Street Journal last month headlined as:

Neil Young Will Return to Spotify After Two-Year Boycott Over Joe Rogan

Singer-songwriter says he had no choice but to return to streaming platform due to wider distribution of Rogan’s podcast

March 13, 2024 Gareth Vipers

For you non-WSJ subscribers who may have forgotten what this is all about, here’s a quote from the WSJ piece:

Young penned an open letter to his manager and label in 2022 asking them to remove his music from the platform, saying it was spreading fake information about Covid-19 vaccines through Rogan’s show.

The article explains that in fact, “…Young’s label legally has control over how and where his music is distributed…” but Vipers claims that they had reason to honor his request. The piece does not say if they actually did, and if they did not, then this would seem to have been a rather empty gesture on ol’ Neil’s part.

Anyway, the point of this piece was that Rogan had since 2022 made a very lucrative deal to have his podcast more widely streamed, including on Apple and Amazon, and in light of that, Young was going to start letting his musical recordings be distributed on Spotify again. [I am inferring from that piece of info that Warner Bros did indeed pull his stuff from Spotify in ’22.]

I am a fan of Young’s music. Hearing Cinnamon Girl blasting out of a pair of car speakers was one of the great thrills of my youth, and one of the few truly wonderful musical moments on the old Saturday Night Live show was when Young and Crazy Horse brought down the house with a searing version of Rockin’ in The Free World. The man was a serious rocker, and he wrote some great songs.

One of my favourite Neil Young moments was in 1988, when he put out an album titled This Note’s for You. It was a blast at other musicians who allow their music to be used to sell shit. One of my (admittedly costless to hold) convictions is that musicians (or actors or other performers) who have made serious money in their career and then allow their output or their selves to be used to sell shit – any shit – are putzes who I wouldn’t trust if I ever ran into them.

As one example, I was depressed a couple of years ago to hear the Who’s Eminence Front – one of their best recordings – being used to sell Nissans. From the movies we have Samuel L Jackson, Danny DeVito, Rob Lowe, Matthew McConaughey, Jennifer Garner and on and on….one sees them more often in ads than in movies.

[I would like to think there is a special place in hell for celebs who accept money to promote online gambling sites – Gretzky, McDavid, Matthews, Jamie Foxx, etc. But I’m sure there’s not.]

These people are not needy. I’m an economist, I get it, no one thinks they have enough money, but I happen to think there ought to be some things one will not do for more. And no, I am not saying that celebrities or people with more wealth than some specified number should be prohibited from selling other people’s shit. They all have a perfect right to do what they are doing. I’m really only saying I think less of them for doing it –  which troubles them not the least, I know.

So back to ol’ Neil. His original move to pull his music from Spotify had two characteristics. One, it harmed Spotify – maybe. Spotify operates a subscription model in which folks pay a monthly fee for the right to listen to music from its catalog, including Young’s. So, it would appear that Young’s move hurt Spotify only to the extent to which people cancelled their Spotify plans, either out of sympathy with Young, or simply because they would no longer be able to listen to his tunes on the platform. I don’t know if that happened (though I rather doubt it), but more important to me is the second characteristic, which is that Young paid a price himself for doing that. He lost his share of that revenue, too, and about that there is no doubt. To me, that speaks to a level of integrity in Young. I don’t mean to say I agree with Young’s apparent position that Rogan is evil. I’ve never listened to one of Rogan’s podcasts, and don’t know what was said on them that upset Young. My point is only that incurring a cost yourself over a principle signals integrity. Anyone can run around bashing others, imposing costs on others, people can do that just for amusement. Taking a hit yourself says something, it says you mean it. Similarly, Young’s apparent past refusal to let his music be used to sell shit cost him real $. Someone would surely have paid him to use his music to sell cinnamon or something, back in the day.

Of course, the corollary to all this is that Neil could have reacted to the recent news of the now-wider distribution of Rogan’s podcast by asking Warner Bros to pull his music from Amazon and Apple, too. That would be even more costly to Young, and would leave me even more impressed with his integrity and commitment. What he has actually done by, according to the article, allowing his music back on Spotify (along with leaving it on the other platforms) says to this observer that Young was not willing to pay that high a price for his principles.

And, to be clear, in ‘price’ I am not pointing only to the money he would lose from streaming payments. He’s a musician, composer and performer, and having people hear his music has been his life’s work. Losing that is a serious price to pay, even were no cash involved.

I judge Neil Young not, and I still thank him for putting out the This Note’s for You album and writing and recording Cinnamon Girl. I merely point out that everything has a price, and we all have to decide which prices we will pay and which we will not, and I continue to believe that those who pay a price to adhere to a principle deserve my respect, if not necessarily my agreement. And – those who have made millions, become famous and then go on to accept money to sell other people’s shit deserve my contempt.

Btw, if I’m right that Young’s original move in 2022 cost Spotify nothing, it raises another question: what was ol ‘Neil trying to accomplish? Topic for another post, perhaps.

 

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