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Official Flautist Welcome Mat™

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World's Most Expensive Paper Clip — Episode 2: Al Christensen Strikes Back

Yesterday afternoon Al weighed in with a comment on Episode 1 that TypePad, my blog host, inexplicably blocked (blocked comments for no apparent reason happen on a regular basis and are not of my doing — there's no solution for it that I can see).

Here's what Al had to say:

"Though it might be the most elegant paper clip, it's not the most expensive.

For example, you can get paper clips designed by Keith Haring [below]

from QuincyShop.com for $7.95.

Or you can get a foot long paper clip [below]

for $14.88 from GreatBigStuff.com.

You can get a 14k gold paper clip/money clip [below]

for the special sale price of $632 (marked down from $1,056) from places like JewelBasket.com.

But those are cheap compared to the colossal paper clip sculpture done by pop artist Claes Oldenburg [top]."

On everything2.com I found the following about Oldenburg's creation:

"The Giant Paper Clip is a nickname for a piece of public sculpture (boringly titled 'Gateway to the Northwest') located in Vanier Park (overlooking the downtown peninsula and English Bay) in Vancouver, BC, Canada. It's a large hollow metal structure which looks like a square paper clip made of rectangular prisms. Because it is hollow, it makes glorious resounding echoing sounds when struck. (Which, take it from me, is a good way to hurt your hand. Bring a stick or something.) It's on a bit of a hill, so it makes an excellent dry spot for a picnic in the otherwise somewhat marshy park."

I find it more than a little disturbing that Al has the time and desire to find out this much about this little.

Reminds me more than a tad of someone I know....

But I digress.

[via Al Christensen's halfdemolishedkitchen]

Let others pay for add-ons while you ride free

Damon Darlin's July 22, 2006 New York Times story about letting other people do your heavy lifting got my undivided attention.

Here's his piece.

What the Naïve Consumers Don't Know, Can Help You

When Xavier Gabaix and David Laibson open a hotel room minibar, they see among the tiny liquor bottles and European chocolates a perpetual battle between companies charging hidden fees and the sophisticated consumer trying to avoid them.

The two economics professors -- Mr. Laibson at Harvard and Mr. Gabaix at the Massachusetts Institute of Technology and Princeton -- have looked at how companies hide fees and costs. They found that sophisticated consumers have somehow learned how to game the system by having enough naïve consumers around to subsidize them.

The smartest strategy, they say, is for the sophisticated consumer to choose the service with the most hidden charges and highest add-on prices, but then avoid paying those added costs. ''The sophisticated consumer takes advantage of that,'' Mr. Gabaix said. ''The naïve pay all the fees.''

Companies hide add-on costs, of course, because it is lucrative. Hewlett-Packard sells inexpensive printers and makes its profit on high-margin replacement ink cartridges that can cost half as much as the printer. The fastest-growing segment of Wells Fargo's banking business is income from fees, up 14 percent in the latest quarter.

Consumers see fees everywhere, in their cellphone and credit card bills, mail-order invoices, mutual fund statements, car rental and hotel charges. Actually, most consumers (particularly those who do not start their Saturday mornings reading financial advice) do not see them or they spot them too late. And that myopia perplexed the two professors.

Economic theory says shrouded fees should not happen. A competing company should come along and tell consumers just how bad its competitors are for extracting those fees. Epson should be telling the world how much Hewlett-Packard charges for ink. Marriott should be pointing out Hilton's parking fees and phone surcharges. But that rarely happens, and Mr. Laibson likens that to the dog that did not bark for Sherlock Holmes.

''My view of the world is that people usually make smart choices, but sometimes they make mistakes,'' Mr. Laibson said. ''Why doesn't the market fix the problem?''

In a paper appearing in The Quarterly Journal of Economics with the academic title of ''Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets,'' the professors say that price-cutting and educational advertising do not always benefit the bargain-seeking consumer. A company would hurt itself if it described how its competitor loads on the fees, they said.

They argue that drawing attention to the rivals' fees just alerts the sophisticated consumer that the rival is actually offering a better deal. Transparent Hotel could advertise a no-added-fees $100 room and point out that Nontransparent Hotel really charges $145 for its $70 room. If a consumer goes with Nontransparent and avoids the add-on fees, he ends up paying less, the economists said. He would advise going to the hotel with the lowest room rate and avoid any fees, assuming -- which economists love to do -- that factors like location and safety are equal.

The result for the well-meaning company is harsh. Its advertising might hurt the rival in the sense that consumers pay fewer fees there, but it is increasing the number of sophisticated consumers and teaching them to choose the other guys. It is unlikely to draw in the sophisticates. ''That business won't make much money once you understand how the world works,'' Mr. Laibson said. ''What's the benefit to the company?''

It is a far better business strategy to have the naïve subsidize the sophisticated. The way the market solves this problem, in other words, is not by educating consumers, but by having the sophisticated consumer exploit the opportunities. Sophisticated consumers are not really taking advantage of companies, nor are companies taking advantage of consumers, as much as companies are helping those sophisticated consumers take advantage of the less sophisticated consumer.

For example, you see an offer for a room at Nontransparent Hotel for $75 (which costs the hotel $100 to provide). The guy checking in behind you also rents a room, but will rack up $70 in fees from the minibar, the phone and garage parking (all of which cost the hotel $20 to provide). You, on the other hand, were not tempted by the minibar, used your cellphone for calls and took public transportation to the hotel. The other guy subsidized your room.

Smart consumers now have a strategy. They should go to the company offering the discounted product even if the company has loads of hidden fees. The sophisticated consumer then exploits the company by taking the below-cost product and shunning the fees. ''It's a perpetual battle between the firm that fools consumers into paying fees and the smart consumer who can avoid them,'' Mr. Laibson said.

Getting cheaper goods and services subsidized by the naïve consumers works as long as you know what you could be charged. But it does not pay if too many people know the same thing.

Shrouding of information rarely goes away because there are new generations of myopic consumers and even the sophisticated consumers are forgetful or distracted and end up paying for add-ons. The professors say that new shrouding techniques constantly evolve as companies find fresh ways to generate additional revenue. ''Now that the world is more complicated with more products, there are more opportunities for people to make mistakes,'' Mr. Gabaix admits.

That said, outsmarting companies is hard work. Hewlett-Packard does not tell consumers the price-per-page cost of its printers on its Web site, for example. You have to hunt for the information and do the math yourself. Hotels in South Florida rarely tell you while you are making reservations or checking-in that you will face a $25 ''resort fee,'' which is ostensibly imposed to cover your use of the pool and deck chairs. A recent study of purchases on eBay showed that consumers responded to direct costs more than to shipping costs.

Even the most sophisticated people find it hard to game the system when it comes to fees. In earlier research, Mr. Laibson and two colleagues, James Choi of Yale and Brigitte Madrian of the Wharton School at the University of Pennsylvania, learned that even the most knowledgeable people make really dumb decisions even when provided all the information.

Wharton is a top business school and its graduates will be leading companies. The students there should be pretty smart about financial matters, right?

The academics asked a number of the school's M.B.A. students how they would allocate $10,000 among five indexed mutual funds. Each student was given the fund prospectuses, where investment strategies and fees are outlined. The academics expected the students would put all of the money in the fund with the lowest fees since index funds invested in identical stocks. But some students went chasing the highest historic returns. Others wanted to spread risk by dividing the money among a number of funds. Only 6 percent did the expected thing.

Then Mr. Laibson and his colleagues made the test easier. Instead of giving them just the funds' prospectuses, he gave them a sheet of paper that summarized the fees of the five funds. ''We thought that would make it more transparent,'' he said. ''We were unshrouding the information.''

Only 19 percent got the correct result.

Or you could say that the smart segment of the market saved money because it was subsidized by the ignorance of the others.

Complete New Yorker Hard Drive

Just announced.

They've taken all the zillions of bits on the nine DVDs making up their first "new media" effort, which came out in September of last year and now costs $59.99, and transferred them to an 80GB 3" x 5" portable palm-sized brushed-aluminum hard drive.

If the idea of carrying around yet another iPod- or cellphone-sized device doesn't appeal to you, not to worry: I expect the next iteration, about two years hence, will be the "Complete New Yorker Flash Drive."

$299.

[via Brian Nelson]

25 Composers of 25 Great 20th-Century Classical-Music Recordings — by Washington Post music critic Tim Page

It was the front-page story in yesterday's Washington Post Arts section.

A list of the composers follows; read the article for the names of the recordings.

1. Aaron Copland

2. Gustav Mahler

3. Leos Janacek

4. Jean Sibelius

5. Richard Strauss

6. Ferruccio Busoni

7. Claude Debussy

8. Arnold Schoenberg

9. Maurice Ravel

10. Carl Orff

11. Bela Bartok

12. Igor Stravinsky

13. Alban Berg

14. Silvestre Revueltas

15. Dmitri Shostakovich

16. Stephen Sondheim

17. Allan Pettersson

18. Milton Babbitt

19. Olivier Messiaen

20. Pierre Boulez

21. Karlheinz Stockhausen

22. Steve Reich

23. Alvin Lucier

24. Benjamin Britten

25. Philip Glass

Full disclosure: I'd previously heard of 20 of the 25.

Contest! — First person to identify correctly the composer pictured up top wins one year of bookofjoe delivered absolutely free to the computer of your choice anywhere in the world.

Second prize is a free lifetime subscription.

Elvis Flip Flops

From the website:

Elvis Flip Flops

These Elvis Flip Flops make imprints of Elvis in the sand.

They're perfect for finding your way back to the clambake — or Blue Hawaii!

Unique flip flops have a suede upper and they leave an imprint with each step!

....................

$15.98.

Commercials are the new 'Hollywood Squares'

Nowadays, instead of sitting above Paul Lynde and next to Sandy Duncan, celebrities with time on their hands find a lucrative home doing TV commercials.

Think Christina Applegate, now prancing around in her Hanes underwear on small screens everywhere.

Memo to Hanes: For the next commercial, try a riff on the classic Brooke Shields for Calvin Klein jeans campaign, to wit: "Nothing comes between me and my Hanes."

Send the check to Shawn Lea 'cause I do it for love.

But I digress.

I give Ms. Applegate credit for pushing the envelope — I mean, I was as surprised as the next brain-dead VH1 viewer to see her making up part of Jessica Simpson's babes-on-wheels roller skating posse (along with none other than desperate housewife Eva Longoria) in Ms. Simpson's new music video, "A Public Affair."

Up top is a shot from the video, with Ms. Applegate (left) and Ms. Longoria (right) serving as Ms. Simpson's wingmen.

Wingwomen?

Memo to VHI: Great new branding campaign, featuring this slogan: "You don't need to be brain-dead to watch VH1 — but it helps!"

Yikes!

You don't suppose that's gonna bring out the lawyerbots, do you?

Sure hope not.

A simple wooden chair

Sure, you can pay in the high three or even four figures for an office chair but you know what?

The more expensive they are, the uglier they get.

Besides which, contrary to the claims of the Aeronistas™ et al, they're horribly uncomfortable.

When I used to have an office in the department of anesthesiology, first at UCLA and later at the University of Virginia, the first thing I did when I moved in was to chuck the standard issue horrendo rolling office chair and substitute an old wooden one I bought from a thrift store for $5 back in the 1800s.

Much better.

From the catalog and website:

Wooden Slat-Back Chair

Our traditional, American-made slat-back chairs are built to last of solid hardwood with wide, contoured seats.

Handy anywhere in the home, they make handsome accents in the hall, kitchen or dining room.

....................

Black, White, Maple, Oak or Red.

$179.95.

D'ja like "Aeronistas™?"

Me too.

But then, I would, wouldn't I?