The New York Michelin ratings are out (and the Times steals their thunder by printing them all) and Slim and I were discussing the economics of Michelin stars. The restaurant where we had our best meal, Taillevent, dropped from three stars to two shortly after we were there. The third star adds demand and creates a premium in the pricing. But there are restaurants nearly as good that don't get the premium because they just miss the additional star. Quality is continuous, but rankings are discrete: surely there are one-star restaurants nearly as good as two-star restaurants, and zero-star restaurants nearly as good as one-star restaurants. Too, restaurants whose business model depends on the Michelin accolade would try to step things up a notch in response to a downgrade (assuming their chef doesn't commit suicide from despair).

If one buys into this theory, the quality restaurants that are the best bargains in New York are Craft (recently mysteriously lost its star), Lever House (recently lost its star), Sushi Yasuda (zero stars that should be one), Union Square Cafe (ditto), 11 Madison (ditto), Tamarind (ditto), Aquavit (ditto), Cafe Boulud (one star that should be two), Robuchon (arguably worth a second star), Gramercy Tavern (at the high end of the one-star range), and Masa (two stars that should be three). Except that the theory depends on Michelin having market-moving power. That's true in France, where each additional star adds 25-60% in tourist business (depending on which news story you read about the subject), but it's not clear to me that Michelin has that much influence in New York City relative to Frank Bruni or even Zagat's.