Markets in Everything
This seems like a market failure. You can explain it through preference asymmetry and the profitability of various customer classes: heavy drinkers are more likely to also be heavy smokers, and they are the most profitable customers. Bar owners don’t want big groups of people who are going to take up three tables for an hour and a half while nursing one white wine spritzer apiece. They want people who are there to drink. In a competitive equilibrium, they couldn’t afford to go non-smoking because they’d lose their most profitable customers to all the other bars.
Second, answering a blogospheric hue and cry from the weekend, she examines why cable news largely ignored the Iranian election controversy.
The cable networks are hamstrung by the fact that they don’t have much footage of what’s going on in Iran. As I watch, they’re showing a combination of shots of peaceful protests in Western countries, lying propaganda footage from Iran’s state television system, and random b-roll of unidentified protests in some unidentified country that does not seem to be Iran. This is less than must-see-TV.
In both cases, arguably, the market produced bad results for good, understandable reasons.
The vast majority of people would prefer that bars be smoke-free, for reasons of both health and aesthetics. Bar owners nonetheless won’t ban smoking on their own, because smokers are excellent bar customers and, in their estimation, won’t drive away more business than they bring in.
Now, this doesn’t explain why more bars catering to the majority non-smokers didn’t open spontaneously. Even if it’s true that, in the aggregate, smokers consume a disproportionate amount of bar drinks, it doesn’t follow that there aren’t plenty of non-smoking individuals who are also serious drinkers and would appreciate the opportunity to spend $10 on two additional beers or an additional scotch rather than on dry cleaning cigarette stench from their suits.
The second case is harder still. The owners of the cable news networks have apparently decided that people would rather hear chit-chat than see hard core reporting of foreign news. Or, at least, the appetite for foreign news day in day out is not bringing in enough money to cover the enormous expensive of adequately staffing foreign bureaus. And, absent having made that investment ahead of time, there’s no way to ramp up to provide serious coverage of breaking events people are interested for non-sustained events.
When I was first watching the network newscasts with interest, the Big 3 all had huge overseas bureaus. ABC News had three anchors briefly, with Peter Jennings reporting from the Moscow desk. Now, the best they can do is buy Christine Amanpour plane tickets and figuratively parachute her to various locales to give the appearance of doing real reporting.