Kim’s Convenience — Driving vs. Baking

Appa has made a collection of baked goods but his wife thinks she could do it better. In an earlier scene, Umma damages a friend’s car and made offered to pay for half the cost of repairing the damage. Her husband is disappointed because he feels he could have saved them a lot of money. Umma lets him know that’s why she isn’t a millionaire, but at least she’s a better baker.

Thanks to John Kruggel for the clip submission.

60 Minutes — Changing Preferences

One of the common shifters of demand is changing tastes/preferences, but that is often taught as something beyond the control of firms. It’s often associated with fads or maybe new research, but firms can also adjust the tastes of their products to induce new preferences. This 60 Minutes segment looks at how companies are changing demand for their products by directly changing the product, or at least the perception of their product.

Thanks to John Kruggle for the submission!

The Office — Automated Assitant

A new phone system can replace many of Pam’s tasks. She normally spends her day connecting incoming calls to different sales people and departments, but this new phone system will make it so that anyone calling Dunder Mifflin can dial directly to the department they want. She thinks she still has value at putting our candy, but then realizes a vending machine can do that as well.

Jim swoops in to save Pam and play the role of Michael Scott, the branch manager. Jim is in love with Pam and doesn’t want to see her fired, so he acts like Michael and tells the salesman that they aren’t interested. He’s almost busted, but luckily gets away with it.

Thanks to Richard McGrath for the clip submission!

Community — Market Price

Troy and Abed are sitting at dinner in a fancy restaurant when the bill arrives at the end. Troy initially offers to pay for dinner because it was Abed’s birthday, but is shocked by the final total since so many things on the menu must have been listed as “market price.”

Restaurants often list menu items as “market price” because they may include item (like lobster or fish) that have a constantly fluctuating price. Instead of printing new menus to account for changing prices, restaurants will just list it at “market price.”

Thanks to Luke Starkey for the clip submission.

Pizza Hut — Gorbachev’s Fault

It’s almost a decade after the Berlin Wall has fallen, and Russia is coming to grips with the introduction American “culture” in their country. As President of the Soviet Union, Mikhail Gorbachev was responsible for the dissolution of the USSR. The resulting economic transition was confusing for many, as the advertisement shows disagreement among family members about the state of Russia in the years following the end of Soviet rule.

Old Spice — Smellcome to Magic

Individuals often make decisions that are in their own best interest, and often disregard the impact they may have on other people. Whenever this happens, individuals are creating an externality. Someone else either benefits or is harmed by that outcome. In the case of someone putting on deodorant, that could have spillover benefits from people getting to smell a “fresh scent.” If too much is applied, it could annoy others are turn to a negative externality.

Volkswagen — Buying a Used Car

Asymmetric information is a condition in which one party to a transaction has information that isn’t known to the other side of the party. This can disrupt the market for used goods because the buyer may not know the full extent of what they’re purchasing. In this Volkswagen ad, the father and son duo are unaware of the older lady’s past experiences with the cars. This is a great segue to Akerlof’s Market for Lemons, which is based on the the used car market.

Turkish Airways — Flying Everywhere

This Turkish Airways ad shows the value of network externalities to a market. A network effect occurs when the value of a product or service depends on the number of users. Network effects are typically positive, such that the more people using the product, the more valuable the product becomes. Airlines are an example of network effects, as the ad points out, because the more places they fly, the more valuable the flights are to the people purchasing the tickets.

Friends — Joey Loses His Insurance

Joey finds out that he hasn’t been working enough lately, so the Screen Actors Guild is canceling his insurance. He’s quick to point out the moral hazard involved in insurance because now he has to be more careful!

Later in the episode, he comes down with a hernia after working out. Since his insurance has lapsed, he doesn’t have enough money to go to the doctor to get it looked out. Luckily, Joey is able to find a part as “dying man” and he ends up getting his health insurance back.

Thanks to Isabel Ruiz for the clip suggestion!

The Simpsons — MoneyBART

The local little league team has a new coach, and she plans on using statistical analysis to improve their chances of winning. She tracks player tendencies and digs into the work of Bill James to bring a Moneyball approach to the Isotots. Bart laments that she has taken the fun out of the game, which begs the question of the team’s objective function. Are sports teams win-maximizers or should some teams focus on having fun?

At the end of the segment, Bart has a choice to make. Should he take the statistical approach to win the game or should he swing and try to preserve his hot streak. The hot hand fallacy is the belief that previous observations are correlated with upcoming observations. This fallacy leads us to believe batters “get hot” even though the probability of the next hit is independent of the previous ones.

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