Friday 28 December 2012

Happy New Year 2013!

Dear Friends and Followers!

So, the end of the world (as we predicted it) did not happen on the 21st of December and therefore all of us could enjoy a peaceful Christmas once again.

Maybe it is for the best - there is so much more to do in the upcoming year! We hope you are looking forward to more of our stuff from 'Supernatural Economics'! And there will be lots to look forward to: lunar effects, werewolves, rational inattention, the power of social media, Golem and dark tourism are just a few topics we will be covering in the forthcoming year.

In the meantime, all the best for the New Year 2013 and see you soon!

WS and EL

Friday 21 December 2012

It's the end of the world (as we know it): Part 2

So, how is the end of the world going for everyone? Do you feel fine? :)
We are continuing with our optimistic predictions that concern some possible scenarios that might be brought about (or come shortly afterwards) the end of the world that is due today. 
Let us consider the two remaining scenarios we outlined in our previous blog: telepathy and psychokinesis.

Telepathic abilities for humans

Scenario number two (telepathy) might be a reality in the nearest future. Mossbridge et al. (2012) conducted a meta-analysis of 26 reports published between 1978 and 2010 and found that for stimuli of two or more types that are presented in an order designed to be unpredictable and that produce different post-stimulus physiological activity, the direction of pre-stimulus physiological activity reflects the direction of post-stimulus physiological activity, resulting in an unexplained anticipatory effect. In another words, sometimes humans can anticipate or even know the future (the concept of premonition).
Although the predicted future would range from a speck of a second to several seconds, the possibility to anticipate future events might have broad consequences for the world trade. Consider for example stock market trading. Scientists have long been waging a debate whether the stock market prices follow the “random walk” or are, on the contrary, non-random and might be understood and studied using some algorithm (knowing this algorithm would be like possessing a modern-day philosopher’s stone, since it would provide its possessor the way to the unprecedented wealth).
While most of the economist and statisticians in the 1960s or 1970s agreed that the random walk hypothesis was the only way to explain the behaviour of stock prices on the stock markets (see e.g. Fama (1965), Cootner (1964), or Malkiel (1973)), the economic science of the 1990s and 2000s started to uncover the non-randomness in the stock prices (see e.g. Lo (1999)).
Telepathic abilities and the possibility of premonition would undoubtedly lead to the total non-randomness of the stock market trading. The brokers would know all about the stocks and the other brokers’ behavior  therefore it will not make any sense to speculate, engage in insider’s trading or do any other usual tricks.
The discovery of telepathic abilities in humans would also lead to another interesting outcome – there will no longer be any need for cellular telephony or the Internet. Of course, everything very much depends on the level of telepathic abilities and the range of the telepathic bounds between humans, but let us to consider for a second that it would be on a planet-scale. This provision would mean that all humans will be connected in one large global network that would enable to share, store, share, pass, or transmit any information all around the planet. The brains of all human (and possibly the animals) will be linked together forming a giant “supercomputer” able to run calculations of an unprecedented depth and complicity. The arrangement was partly described in James Rollins’ “Altar of Eden” (Rollins, 2010), where an experiment linked several animals’ brains and increased their mental abilities to an unprecedented level.
The scenario (however unlikely it might be) was shown in the 2009 Hollywood blockbuster “Avatar”. Planet Pandora was such a giant supercomputer and all pandorians were plugged in into the global network of the planet.
It might as well be that this scenario will become a reality in the nearest future. For instance, Von Radowitz (2012) describes recent experiments where scientists were able to read and decode the electromagnetic impulses in the human brain, turning them into single words and then coding them back again. The technology that was developed to help patients with speech disorders might pave the road to global telepathy and interconnectedness but will mean that some re-arrangement would have to be made in the world’s economy.

Unleashing the power of phychokinesis in humans

The 2012 fiction film “Chronicle” shows a trio of high-school teenagers who encounter a mysterious vibrating and glowing crystal in the underground cave and gain psychokinetic abilities. Starting from lifting small objects into the air, they progress towards lifting boxes and cars and end up lifting themselves.
Although the film has a sad ending (only one of the teenagers survives his newly gained abilities), it portrays what would have happened if everyone had this abilities. First of all, psychokinesis would alter the transportation sector. The ability to lift objects only with the power of one’s mind would surely help the moving and loading industries which would cut the costs of work and create a small army of unemployed manual workers.
In addition, this would mean that the traditional means of transports (e.g. cars, trams, metro) will be abandoned in favor of flying. Imagine a sky full of people running (or flying) errands, going to and from work, chatting on the rooftops and the like!
Nevertheless, it is easier to see that this scenario of no transportation costs of goods and labor would not be as perfect, as in “wormholes model”. People would still need to spend time and energy to move from place to a place and the border controls might still be effective (although, in most of the cases, they would become the airspace controls). The discovery of telekinetic abilities will not necessarily lead to the fall of the states and the governments, since they will still be able to provide public goods and protection to their citizens. Military powers would still mean something and the rule of law would be quite easy to execute.
Let us see what would happen to the economy and the global trade. Well, fist of all, telekinetic abilities would surely mean smaller transactions costs for trading and shipping goods than in the real world. There might be a sharp decrease in the transaction costs for labor and services but to a very limited range. For instance, labor migration might take place from less wealthy countries to their more wealthier neighbors and it is even possible that this migration would take up the form of commuting, however there still would be considerable costs associated with commuting (or flying) to work every day. The distance would still matter, since no cheap labor from Mexico would be able to travel to, say, New York City back and force every day in a row. In short, equalization of factor prices would not be as quick and smooth (as in “wormholes model”). This scenario would be more like a real-world case, but, in a way at least, more efficient, although some implications might be considered (see e.g. Frankel, 1975).
Another non-negligible effect would be the losses of transportation sectors, producers of cars, trains, and airplanes. Although it seems unlikely that the public and private transport would disappear entirely (some individuals might get injured and unable to fly, and long-distance flights might be beyond the abilities of some people), a sharp decrease followed by the fundamental changes in the industry would follow.
There is also a question what would happen to all those people who would be made redundant in the sectors of transportation and heavy industry, but it might be that this would not create massive unemployment, since new possibilities in the other sectors would also arise.

Conclusions

Whether the end of the world happens today or some time later, major unpredictable planetary events can possibly happen any time and disrupt the existence of humanity. These events might bring substantial changes altering the world we live in and making it a very different place.
In this paper, we discussed the possibility of three “end-of-the-world” scenarios: a) collision with the parallel universe and opening of passages or wormholes, b) discovery of telepathic abilities in humans, and c) unleashing the power of psychokinesis in humans. It becomes apparent that these scenarios can be ranked by the scale of their impact on global economics and trade. With regard to this, we can nominate scenario c) psychokinesis to be the “optimistic” scenario, scenario a) telepathy to be the “realistic” scenario, and scenario a) “wormholes model” to be the “pessimistic” scenario.
It is easy to show that while the possibility to move around goods and people without no visible costs would only slightly alter global trade on Earth and the discovery of telepathic abilities in humans (which might be a reality in the nearest future) would only lead to the demise of global communication systems, cell phones and the Internet, the scenario of a collision with a parallel universe and opening of multiple “wormholes” or passages between various spots on Earth or in the parallel Universe, would make global trade and economy redundant. The possibility to be in various places or to carry goods or services to multiple locations within seconds would undoubtedly mean the end of the world’s economy (as we know it) which would make many of us feeling far from fine.

Tuesday 18 December 2012

It's the end of the world (as we know it): an economist's view


What would the end of the world be like?

The end of the world is coming and only three days are left. Whether you believe in the end of the world (as we know it) or not, let us take a moment and think about the implications it might bring from the economist’s point of view.
Well, first of all, all those catastrophic scenarios that include a sudden switching of Earth’s magnetic poles, a massive meteor collision with Earth, ejection of mass from the Sun, biblical-sized floods, and a sudden shift in Earth’s crust, do not constitute any interest to economists. They would simply lead to the demise of the whole humanity which would be very unfortunate for the economists, because they would have no markets and economic agents to research anymore. This is not to mention that the 21st of December that is regarded as the end-date of a 5125-year-long cycle in the Mesoamerican Long Count calendar, is misinterpreted and miscalculated according to Mayan scholars.
Although the humanity seems to enjoy flirting with the idea of its own extinction on 21 December 2012 (just recall some recent Hollywood blockbusters, as “The day after tomorrow” (in which global warming led to the new Ice Age), “Knowing” (in which the long-anticipated Sun eruption destroyed all living things on Earth, although the aliens transferred some life species to another planet), “2012” (in which massive solar flares caused devastating tsunami and earthquakes that re-shaped the face of the planet)), the New Age interpretation of “the end of the world” might mean the start of time in which Earth and its inhabitants may undergo a positive physical or spiritual transformation or enter the new era. This new era (often referred to as the Age of Aquarius) would allegedly help the humanity to discover its true potentials, like the “third eye”, telepathy or psychokinesis (often referred to as “telekinesis”). Other scenarios, often described in popular literature and films, might include collision with the parallel universe or even universes (see e.g. “2012: The War for Souls” by Whitley Strieber, or the U.S. TV series “Fringe”). 
Let us explore some of the ideas of the “end of the world” from the economist’s points of view. In order to do that, we have chosen three major (less grim and more pleasing) scenarios of the world’s end: a) collision with the parallel universe and opening of passages between the worlds, b) spiritual transformation of the humanity leading to the discovery of telepathy, and c) global changes leading to the unleashing the power of phychokinesis in humans.
There is no particular reason why these three scenarios were chosen over the devastating floods, sun flares or planet collisions. All of them seem equally unlikely but the ones we chose might be interesting to look into using the toolbox of economic science.
We will gradually take each of these three scenarios and analyze them in details as the doomsday clock is ticking. It is hard to predict which of them would come true (and it might be that none of them would materialize at all) but at least you will be prepared, just in case.

Collision with the parallel universe and the “wormholes model”

In today’s blog entry we will concentrate on the scenario number one: collision with the parallel universe and opening of passages between the worlds, or wormholes in our world that would allow humans to travel between multiple places on Earth (or between Earth and other planets) in an instance.
The possibility to move freely and without borders all over Earth (and perhaps to the other planets universes) would fundamentally change the flow of goods, services, and labour. There will be no borders to cross, there will be no tariffs or duties to pay, workers from less wealthy countries would be able to commute every day, so all the transaction costs of migration would be cancelled. Global security would suffer too – since every human being would be able to move around or travel between Earth and parallel Earth, no state of global force would be able to keep track of potential criminals, terrorists or abductors.
Let us name this scenario a “wormholes model”. Under the model’s assumption, there would be no barriers to factor movements and the situation would be very much similar to the textbook example of the common market. 
It is easy to show that the situation described above would be similar to the Paul Krugman’s paper on interstellar trade. In his 1978 paper (entitled “The theory of interstellar trade” and published in 2010 in ‘Economic Inquiry’), Paul Krugman, a Nobel Prize laureate of 2008, points out that the assumptions underlying neoclassical theory bear very little resemblance to the world we live in (Krugman, 2010). The paper formulated two fundamental theorems of interstellar trade: a) When trade takes place between two planets in a common inertial frame, the interest costs on goods in transit should be calculated using time measured by clocks in the common frame and not by clocks in the frames of trading spacecraft, and b) If sentient beings may hold assets on two planets in the same inertial frame, competition will equalize the interest rates on the two planets.
Similar to Krugman, one might analyzing the simple neoclassical model of trade, introducing the new (doomsday) conditions. Equalization of the factor prices is what would happen under the provisions of neoclassical theory. This is of course often criticized, since such assumptions represent a way too simplified view of the economic relations in the world. However, this is exactly what would happen under the first doomsday scenario we have described!
Since the economic theory states that the total welfare effect of the common market (comparing to the customs union) is always positive for all participating countries, we might conclude that the “wormholes” model might also bring positive gains for all parties (parallel Earths or universes alike). Of course, this analysis is too simplistic and deserves further consideration but the benchmark has been set.
More scenarios and economic analysis tomorrow! All the best and looking forward to the forthcoming end of the world (we feel fine)!

WS and EL

  


Thursday 13 December 2012

Holiday season and dark tourism: where are you going this year?

Holiday season is coming and many of us are looking forward to visiting friends and family or just travelling to some interesting places all around the globe. While most people would travel just to enjoy the Christmas atmosphere or the main tourist destinations (oh, these Christmas markets of Europe with their mulled wine, gingerbread cookies and sparkling Christmas souvenirs), or would take their retread to the beaches and sunshine of the Southern hemisphere, some individuals have something darker in mind. The thing is that Christmas season is also ideal for so-called “dark tourism” (also known as “black tourism”, “grief tourism”, or “thanatourism” (derived from the old Greek word "thanatos" meaning "death").
Dark tourism is tourism involving travel to (and fascination with) sites associated with death and tragedy. These sites might include macabre sites of atrocities like former death camps Auschwitz (Poland), Terezin (Czech Republic), or Tuol Sleng Genocide Museum (Cambodia); they might also be represented by the places of historic value and morbid past, like Calvary (Golgotha) in Jerusalem (Israel), the city of Hiroshima (Japan), or Ossuary in Kutna Hora (Czech Republic).   
Dark Tourism was first described in 1996 by Professor John Lennon and Malcolm Foley from Glasgow Caledonian University. Nowadays, the leading specialists for dark tourism can be found at the Institute for DarkTourism Research (iDTR) based at the University of Central Lancashire, United Kingdom. Dr. Philip Stone, Executive Director of the Institute is the one of the world-leading specialists in the field. In 2010, he defended his Ph.D. thesis entitled “Death, Dying and Dark Tourism in Contemporary Society: A Theoretical and Empirical Analysis”.
Although dark tourism and its less macabre sub-section called “fright tourism” generate a significant amount of public and research interest and experience a significant popularity due to the increase of global communication and travel opportunities, the fictional (literary or film) aspect of dark or fright tourism, and especially its potentials in young Europeans in cultural heritage still remains largely underdeveloped.
Squire (1996) describes literary tourism as “premised upon the public’s desire to experience a version of the past (or imagined present) and to make connections between past and present, fact and fiction. It therefore trades in images and expectations of people” (Squire, 1996). Literary tourism (which is often associated with film tourism, since most of the popular literary works are being filmed today), attracts tourists and forms a part of the landscape of heritage tourism (Herbert, 2001).
Despite the growing popularity of the literature and film tourism, few attempts have been made to identify the critical success factors behind this fast-growing phenomenon (Hudson and Ritchie, 2006).  Riley, Baker and Van Doren (1998) stated that further research on different genres, locations and icons was important in understanding the effect of film tourism, which  they claim still remains under-researched and representing a rich area for theoretical exploration (see e.g. Hudson et al, 2006, Bolan et al, 2008, Beeton 2004). 
One of the most important and fast-growing fields in literary and film tourism is the mystery and thriller tourism. Patterson (2006) describes the genre as having “the intensity of emotions they create, particularly those of apprehension and exhilaration, of excitement and breathlessness, all designed to generate that all-important thrill”. Mystery and thriller tourism might be viewed as a part of fright tourism associated with a more fun part of dark tourism. Most of the visitors are attracted to the places associated with mystical and often horror events described in the books or demonstrated in films and TV series, however the majority of these events might be a result of a pure imagination of their creators and have never actually taken place in real life. In a way, mystery and thriller fright tourism is “having fun without having to deal with the grim part of dark tourism”.
It is interesting to follow how locations, or tourist destinations, play an important role in fright tourism. Although the plot of the most mysteries and thrillers does not tie them to any specific location, or sets them in multiple locations, some examples can be found (see Table 1).

 Table 1: Examples of recent mystery and thriller literary works set in U.S. destinations
Year
Literary title
Author
Location
1986
“IT”
Stephen King
Derry, ME
1991
“The Firm”
John Grisham
Memphis, TN
2009
“The Lost Symbol”
Dan Brown
Washington D.C.
2008
“Gone Tomorrow”
Lee Child
New York, NY
2008-2010
“Twilight Saga”
Stephenie Meyer
Forks, Washington

 Source: own compilation

An important aspect of fright mystery and thriller tourism is, of course, something what we call “fright film tourism”. Most of the successful mystery and thriller literary works today are forged into successful films and TV series which increase their popularity and dissemination. In this context, Vagionis and Loumioti (2011) demonstrate that film tourism might be an effective marketing tool for promoting tourism destinations. Reeves (2001) points out that not only “feeling good” or being associate with romance or escapism” constitutes a popular visitor attraction, since towns like Burkittsville, Maryland, the setting for “The Blair Witch Project” have seen an influx of visitors, and the Georgetown house in Washington D.C. which was the setting for “The Exorcist”, continues to be a major tourist attraction.
Beale (2012) claims that thanks to the “Twilight Series” set by Stephenie Meyer in a little town of Forks, at Olympia Peninsula in Washington, the local economy experienced a huge tourism boost: in 2008, after the release of the first of the films, the number of visitors nearly doubled to 19,000, and by 2010 the figure was 73,000.
While New York is undoubtly the setting of many typical “fright tourism” films, TV series and books (including “Ghost Busters”, “Batman”, “Godzilla”, “Person of Interest”, “Fringe”, and many more), many small and unknown towns in the United States found themselves to be the scenes of mystery and thrillers’ settings (see Table 2).

 Table 2: Examples of recent mystery and thriller films and TV series set in U.S. cities (1999-2012)
Year
Film/TV series title
Set in
1999
“The Blair Witch Project”
Burkittsville, MD
2004-2010
“Lost”
Oahu island, HI
2005 -
“Bones”
Washington, D.C.
2006 -
“Dexter”
Miami, FL
2008 -
“True Blood”
Bon Temps (fictional), LA
2008 -
“Fringe”
Boston, MA/New York, NY
2008-2012
“Twilight Saga”
Forks, WA
2011 -
“Person of Interest”
New York City, NY
2011 -
“Grimm”
Portland, OR
2012
“The Dark Knight”
New York City, NY
2012
“Hunger Games”
Charlotte, NC
2012
“Alcatraz”
San Francisco, CA

 Source: own compilation

While of some of the towns that appeared in literary and film mysteries and thrillers seem to profit from that fact, others cannot fully exploit their tourism potential. For instance, it was reported that the local community of Burkittsville, Maryland (the setting of “The Blair Witch Project”) claims that the successful film has brought upon the “unwanted popularity and troubles” upon their small community, while the profits from increased fright tourism remained negligible (Fiore, 2010).
While it was shown that fright mystery and thriller tourism is gaining more importance in U.S. destinations, perhaps due to the fact that the country represents the most attractive market for leisure and entertainment, the potential for this aspect of tourism in Europe should not also be underestimated.
Europe has always been a very important place for global incoming literary and film tourism and many literary works of great importance were set in European destinations. In this context, it should be mentioned that many mystery and thriller books and films are set in various European destinations. Table 3 that follows provides an account of the most successful mystery and thriller literary works set in European destinations.

 Table 3: Examples of recent mystery and thriller literary works set in European destinations
Year
Film/TV series title
Set in
1999
“The Blair Witch Project”
Burkittsville, MD
2004-2010
“Lost”
Oahu island, HI
2005 -
“Bones”
Washington, D.C.
2006 -
“Dexter”
Miami, FL
2008 -
“True Blood”
Bon Temps (fictional), LA
2008 -
“Fringe”
Boston, MA/New York, NY
2008-2012
“Twilight Saga”
Forks, WA
2011 -
“Person of Interest”
New York City, NY
2011 -
“Grimm”
Portland, OR
2012
“The Dark Knight”
New York City, NY
2012
“Hunger Games”
Charlotte, NC
2012
“Alcatraz”
San Francisco, CA
 Source: own compilation

Many best-selling mystery and thriller novels found its way into film adaptations. Table 4 provides some example of recent blockbuster films set in European destinations.
Our preliminary analysis shows that the British capital is, by far, the most popular location for film destination on the Old Continent, only beaten by New York. For instance, the most recent James Bond film entitled “Skyfall” is for the largest part set in London. The newest and highly popular adaptation of “Adventures of Sherlock Holmes” where the world-famous detective excessively uses his iPhone for text messages and chats and Dr. Watson keeps a blog also takes place in modern-day London.

 Table 4: Examples of recent blockbusters set in European destinations
Year
Literary title
Author
Set in
1897
“Dracula”
Bram Stoker
Bran/London
1892
“Adventures of Sherlock Holmes”
Arthur Conan Doyle
London
1937
“Master and Margarita”
Mikhail Bulgakov
Moscow
1920-1973
“Miss Marple/Hercule Poirot novels”
Agatha Christie
UK locations
1999
“Hannibal”
Thomas Harris
Florence
1997-2007
“Harry Potter”
Joanne Rolling
London
1997 -
“Harry Hole novels”
Jo Nesbo
Oslo
2000
“Angels and Demons”
Dan Brown
Rome
2003
“Da Vinci Code”
Dan Brown
Paris/London
2005-2007
“Millenium Trilogy”
Stieg Larsson
Stockholm
2010
“Postcard Killers”
Lisa Marklund/James Patterson
Stockholm
 Source: own compilation

Overall, it becomes apparent that fright mystery and thriller literary works and films constitute a considerable part of Europe’s dark tourism potential and generate lots of money. Since the majority of consumers of this type of entertainment are relatively young, developing this aspect of cultural heritage by associating popular books and films with cultural tourism destinations might help young Europeans in the creation of technology-enhanced cultural heritage experiences, enabling them to generate quality transmedia and user-created solutions (interactive city games and quests, mystery tours with the elements of the game and storytelling, etc.).
So, where are you going this year? Dracula's Castle in Bran, streets of Prague haunted by Golem, London's Whitechapel where the shadows of Jack the Ripper crawl in every corner, or some other, less macabre (and more mundane) place?

Let us know and good travels, everyone!

WS and EL