Hal is Managing Director and Principal at Navigant Economics. He has written, thought and advised extensively on antitrust, finance and general regulatory issues.  His SSRN page is here, and it includes co-authors like David Teece, Dan Rubinfeld, Jerry Hausman, Greg Sidak, Bob Crandall, and Bob Litan, among many others. He is the co-author of the book Broadband in Europe: How Brussels Can Wire the Information Society (Kluwer/Springer Press 2005). and his article have appeared in, among there, American Economics Association Papers and Proceedings, Harvard Journal of Law and Technology, Journal of Industrial Economics, Journal of Network Industries, Journal of Regulatory Economics, Review of Network Economics, Topics in Economic Analysis and Policy, and Yale Journal on Regulation. He has also served as Adjunct Professor at Georgetown University’s McDonough School of Business.

On the policy front, his essays have appeared in several leading newspapers and magazines, including Antitrust, Forbes, The Economist’s Voice, Harvard Business Review, Health Affairs, The Milken Institute Review, Regulation, The Wall Street Journal, and The Washington Post. His M.A. and Ph.D. degrees in economics are from the Johns Hopkins University and his B.S. magna cum laude in economics is from Tulane University.

Perhaps of particular interest to our readers, one of Hal’s most recent articles (with Gerald Faulhaber) is on wireless broadband competition and the FCC’s most recent wireless competition report, a not-uncommon subject around here (see, e.g., here).  It’s an excellent paper, and you can find a link to the article and a podcast of Hal discussing the paper with Jerry Brito here.

We look forward to a stimulating set of posts from Hal — and he isn’t shy, so don’t hesitate to weigh in in the comments!

The basics:

Allegations of “search bias” have led to increased scrutiny of Google, including active investigations in the European Union and Texas, a possible FTC investigation, and sharply-worded inquiries from members of Congress. But what does “search bias” really mean? Does it demand preemptive “search neutrality” regulation, requiring government oversight of how search results are ranked? Is antitrust intervention required to protect competition? Or can market forces deal with these concerns?

A panel of leading thinkers on Internet law will explore these questions at a luncheon hosted by TechFreedom, a new digital policy think tank. The event will take place at the Capitol Visitor Center room SVC-210/212 onTuesday, June 14 from 12:30 to 2:30pm, and include a complimentary lunch. CNET’s Declan McCullagh, a veteran tech policy journalist, will moderate a panel of four legal experts:

• Prof. Frank Pasquale, Seton Hall University School of Law, author of Federal Search Commission? Access, Fairness and Accountability in the Law of Search
• Prof. Geoffrey Manne, Lewis & Clark Law School, TechFreedom Adjunct Fellow, and Director of the International Center for Law & Economics, author of If Search Neutrality Is the Answer, What’s the Question?
• Prof. James Grimmelman, New York Law School, author of The Structure of Search Engine Law
• Prof. Eric Goldman, Santa Clara University School of Law, author of Search Engine Bias and the Demise of Search Engine Utopianism

More details are here, and the event will be streaming live from that link as well.  If all goes well, it will also be accessible right here:

http://www.ustream.tv/flash/viewer.swf

Live Broadcasting by Ustream

Filed under: administrative, announcements, essential facilities, google, law and economics, monopolization, regulation, technology Tagged: Declan McCullagh, Eric Goldman, frank pasquale, geoffrey manne, google, james grimmelmann, techfreedom, Web search engine ]]> http://truthonthemarket.com/2011/06/14/techfreedom-search-engine-regulation-event-today/feed/ 0 geoffmanne http://truthonthemarket.com/2011/03/24/markets-are-incremental-obamacare-is-not/ http://truthonthemarket.com/2011/03/24/markets-are-incremental-obamacare-is-not/#comments Thu, 24 Mar 2011 10:40:39 +0000 Paul H. Rubin http://truthonthemarket.com/?p=10976 ]]> Watching Obamacare dissolve in a morass of legal challenges and waivers points out another benefit of markets.   Markets proceed incrementally.  The Internet has made a huge difference in all of our lives.  But the process was gradual.  It began with just a few academic users and then expanded as entrepreneurs figured out next steps.  In 1990 no one planned today’s Internet; no one could have.  There were individual successes, some of which persisted (Amazon) and some of which succeeded for awhile and then failed (AOL).  But the whole thing is a mass of small steps that led to what we have today.  More small steps will lead to tomorrow’s Internet which will be something no one today can foresee.

Obamacare (and many other government efforts) is not incremental.  It is a 2000 page law trying to remake the entire medical system from the top down.  No such system can succeed.  No one can foresee the interactions of all of the parts that are part of this law.

Other proposals for reform — allow interstate sales of medical insurance, cap tax deductibility of insurance premiums — are incremental in nature.  Such proposals allow us to try a small step and see if it works and proceed from there.  We cannot forecast the results of these small steps, but we do not need to.  They are small and easy to reverse if they fail.  Moreover, they leave room for entrepreneurs to modify them in unpredictable ways.  If we allow interstate sales, which models will work best?  No one knows, but lots of people will try to figure it out and some of them will make lots of money and give us a better system.

The first assumption calls for a comparative institutional analysis; the second at least invites one.  Both are necessary – and neither sufficient – to justify behaviorally-informed regulations.  Neither proposition, however, is self-evident.  Professors Bar-Gill and Warren broadly claim that borrower irrationality gives rise to predatory lending practices, which yield sub-optimal outcomes where consumers borrow more than they otherwise might.  Even assuming these biases into existence, however, it is unclear why, absent market power amongst lenders, these supra-competitive profits would not be competed away as price (and non-price) credit terms themselves.  Bank of America, among others, offers a “keep the change”-style policy – a relatively painless way for a consumer to voluntary alter the default rule of their own expenditures to increase savings.  Chase now peppers the airwaves with “Slate with Blueprint,” purporting to help a consumer navigate a myriad of bills, obligations, and interest rates to neatly tailor one’s own spending patterns.  Unless behavioralists can demonstrate – or even articulate! – some reason to believe that firms (1) remain sufficiently rational to predate upon consumer biases, yet (2) despite this rationality will not compete the monopoly profits of those biases away – I echo several other contributors’ insights that the leap from behavioral quirk to public intervention is something of a non sequitur.

Yet I think that Professor Ribstein’s point addressing the second of these two assumptions is even more unsettling.  Governmental interventions run a gamut of intrusiveness, both along actors and actions.  Potential behavioral regulations may compel disclosures, reverse common-law default rules, or prohibit disfavored choices.  Potential behavioral regulators could conceivably include, amongst others,the court system (through the common-law evolution of behaviorally-informed doctrines or the interpretation of behaviorally-informed statutes), state legislatures, state administrative bodies, Congress, or myriad administrative agencies.  Behavioralists seem to prefer the latter – witness the CFPB and its towering regulatory superstructure.  To the extent that we cannot trust markets for law when we cannot trust markets whatsoever, as Professor Ribstein points out, this is intuitively consistent.  Yet I neither believe the Administrative Procedure Act – or administrative law, or the administrative process more broadly – is well-adapted to the assumption of pervasive irrationality among consumers (much less regulators), nor do I think behavioralism is prepared to implement the conceptual checks on the regulatory process that would flow from a consistent application of checks against behavioral irrationality.

By way of example, reference the Supreme Court’s position on equitable estoppel against administrative agencies.  Hundreds of government agencies administrate various regulatory and benefits programs for myriad classes of individuals.  By necessity these regulations are indecipherable to even many specialists; the agencies generally provide free advice upon inquiry.  The Court finds this general advice a social good which, albeit subject to a meaningful chance of error, provides rational consumers of governmental services with a low-cost means of resolving low-value inquiries.  We assume that individuals who have especially significant benefits or risks at stake on the interpretation of one rule or another will participate in the regulatory or adjudicative process more closely, or will otherwise rationally expend resources (say, on a tax lawyer) to ensure their conduct conforms to the law.  Accordingly, an individual must demonstrate something approaching unequivocal statements by an authoritative government source and extreme, unjustifiable harm to a private entity as a result of ill-taken government advice in order to equitably estop a government agency or actor.

All of this, of course, assumes rational decision-making by individuals as a sine qua non.  Even if we put aside the necessity of assuming rational actors within the government – no small task for a behavioralist! – it stands to reason that surely public actors, insulated from competitive pressures, must be called to account for the potential hyperbolic discounting effects the agencies have upon consumers of their services as well.  In other words, the chances the Social Security Office’s free advice is in fact erroneous and will result in a deprivation of benefits, followed strictly, may actually be 1 in 5; however, a behavioralist’s optimism bias may suggest, for example, that individuals relying on that advice may assume it as 1 in 10.  Or 1 in 100.  Or 1 in 1,000.  And so forth.  To demand private firms hold consumers harmless for their irrationality is to ignore that behaviorally-informed administrative law would, or should (in a world of undivided light and perfect intellectual consistency) do so as well.  Are behavioralists prepared to call for robust equitable estoppel against government agencies with superior information that provide information to consumers?  This, of course, is merely a narrow, trivial example; the entire construction of the Administrative Procedure Act presumed rational – or super-rational – technocrats capable of “solving big problems;” to broach the possibility of individual irrationality at the regulatory level is both a new heresy and a very, very old one.

These inconsistencies are troubling.  To the extent regulators and regulations flow despite – and not in response – to them, it leaves liberty-minded observers with an impression that behavioral economics wields a cudgel of irrationality to justify subordinating, rather than revealing, individuals’ true preferences.  It is not historically atypical, however, to see a movement that stands to deeply undermine liberty shroud itself in the language of individualism and personal protections.  That behavioralists yet feel compelled to do so – as unmodified “paternalism” remains a dirty word in a contemporary culture suffused with examples of it – should provide advocates of freedom with some small solace.

The reason for this note is because I’ve decided to hang up my blogging hat. I was a fool, and I didn’t anticipate how this kind of thing could happen. As many of our readers and my students know, I’m opinionated and willing to push boundaries. This is what I think is the role of a professor, and blogging allowed me to do it in an informal and diverse manner. But I misunderstood the technology, and the consequences are devastating for me personally. I wish I had just stuck to blogging about corporate law and such, but I couldn’t help myself. Self restraint would have been the better course. Perhaps someday I will return and limit my commentary to my academic areas of interest. For now though, I have to say good bye. I’ve enjoyed the experience and the interactions I’ve had with readers and, of course, my co-bloggers. I am sad to leave, but my family has to come first, and my blogging has caused them incalculable damage.

A final note: I am especially saddened that my post was misconstrued as being about anything other than the impact that tax increases will have on people at the lower end of the high-income bracket. Agree or disagree, certainly questions like this need to be part of the equation. I understand the suffering of the world and the good fortune I have. The debate is not, or should not, be about whether we should try to improve the well being of everyone in our neighborhoods, our country, and around the world, but how. I have different ideas about this than many of our readers and my critics, but my motives are the same as theirs. I’ve never made up stuff about them, distorted their arguments, or questioned their good intentions. I would expect the same in return.

Farewell.