Companies often run into trouble when they offer a service at a zero price. Not always, of course. Many all-you-can-eat buffets continue to thrive even though the marginal cost of the next chicken nugget is zero. And many content providers manage to stay in business by selling radio, TV, or display ads against the free [...]
Archive for the ‘Microeconomics’ Category
Why Free is a Bad Price, American Airlines Edition
Posted in Business, Microeconomics, tagged Adverse Selection, Airlines, Microeconomics, Moral Hazard, Pricing on May 7, 2012 | 1 Comment »
Investing in Memories, Ocelot Edition
Posted in Microeconomics, tagged Happiness, Microeconomics on April 30, 2012 | 7 Comments »
A recurring theme of recent happiness research is that when it comes to seeking pleasure, people should “buy experiences rather than things.” People are happier when they skip the shiny baubles (or new high heels) and do something memorable. Over at the Atlantic, Garett Jones gives one economic explanation for this finding: memories are a [...]
Advanced Game Theory, Golden Balls Edition
Posted in Microeconomics, tagged Game Theory, golden balls, Microeconomics on April 21, 2012 | 3 Comments »
My Twitter feed is, quite rightly, full of links to this remarkable episode of Golden Balls, the British game show that puts contestants in a classic game theory dilemma of “splitting or stealing” the grand prize: If you have time for more, here’s another famous episode, with a very different display of strategy and tactics:
Should We Blame TurboTax for Tax Code Complexity?
Posted in Microeconomics, Taxes, tagged Microeconomics, Rebound Effect, Taxes on April 17, 2012 | 4 Comments »
After another grueling tax season, my colleague Howard Gleckman is understandably frustrated with America’s complex tax code. And with instructions like this, who can blame him?: Your ATNOL for a loss year is the excess of the deductions allowed for figuring the AMTI (excluding the ATNOLD) over the income included in the AMTI. Figure this [...]
Should High Heels Be Taxed?
Posted in Life, Microeconomics, Taxes, tagged Humor, Pigou, Taxes on April 5, 2012 | 10 Comments »
Among my idiosyncracies are two footwear anti-fetishes: I hate flip flops and high heels. I have never mastered the dark art of walking in flip flops, and I have always been troubled when women teeter at the edge of falling because of shoes designed for fashion (allegedly) rather than function. Nonetheless, I enjoyed Thursday’s Wall Street Journal piece about [...]
Long Spots, Short Stripes
Posted in Life, Microeconomics, tagged Art, Humor, Microeconomics on March 31, 2012 | 3 Comments »
Ran into Felix Salmon out at the Kauffman Foundation’s economic bloggers confab. His latest Felix TV breaks the contemporary art market down into two simple metrics: $ per spot and $ per stripe. Feliz says buy spots. But a word of warning: Damien Hirst seems hellbent on flooding the dot market. Somehow I think the price [...]
Everything’s Negotiable, Even Beating Casinos at Blackjack
Posted in Microeconomics, tagged Black Jack, Competition, Gambling, Negotiation on March 16, 2012 | 2 Comments »
Over at the Atlantic, Mark Bowden tells the tale of Don Johnson, who managed to win $4 million playing blackjack at Caesars in Atlantic City, $5 million at the Borgata, and $6 million at the Tropicana. How’d he do it? By negotiating favorable odds: Johnson is very good at gambling, mainly because he’s less willing to [...]
Is Incentive Compensation a Giant FIB?
Posted in Business, Finance, Microeconomics, tagged Business, Finance, Incentives, Inequality on February 28, 2012 | 5 Comments »
Harvard Business School professor Mihir Desai believes American companies and investment firms have erred–horribly–by linking manager compensation so tightly to financial market performance. In the current Harvard Business Review, he identifies this as a giant FIB, a Financial Incentive Bubble: American capitalism has been transformed over the past three decades by the idea that financial [...]
The Miracle of Chained Kidney Transplants
Posted in Microeconomics, tagged Kidneys, Microeconomics, Organs on February 19, 2012 | 1 Comment »
Most modern markets operate on money. I sell my services as an economist, for example, and use the proceeds to buy Tazo Tea, vacation trips, and a surprising number of Apple products. But that approach doesn’t transplant well (so to speak) to living human organs. Many people find the idea of markets in organs repugnant. [...]
Oil and Natural Gas Prices Move Even Further Apart
Posted in Energy, Environment, Microeconomics, tagged Energy, Natural Gas, Oil on January 9, 2012 | 3 Comments »
In 2010, I wrote a series of posts documenting how oil and natural prices had decoupled from each other (see here and here). For many years, oil prices (as measured in $ per barrel) were typically 6 to 12 times natural gas prices (as measured in $ per MMBtu). That ratio blew out to around [...]
Most Requested
Twitter
Get Updates by Email
Get Updates by RSS
Share or Bookmark
-
Recent Posts
- The World’s Most Traveled Bird?
- Is the United States the Best Place for Women?
- Is the Reliability of Public Opinion Surveys Declining?
- Fixing Medicare’s Double-Counting Problem
- Energy Security, the Infographic
- The Fight over Medicare Double Counting
- Why Free is a Bad Price, American Airlines Edition
- Jobs Report – The Soft Side of Mediocre
- Investing in Memories, Ocelot Edition
- Advanced Game Theory, Golden Balls Edition
- Entitlement Spending in One Picture
- Talking Tax Reform on the PBS Newshour
- The Federal Budget in One Picture
- Should We Blame TurboTax for Tax Code Complexity?
- How Big Are Tax Preferences?
30-Second Economics
Tags
Categories
Archives
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
Translate this blog into
