PBS Newshour investigates the economics around the first Thanksgiving, including the differences between Europe’s cash economy and the indigenous barter system as well as common resources and property rights.
There is a feud waging between C and D blocks. It is C Blocks time for some revenge, so the leader “Badison” devises a plan to defecate on C Blocks clean uniforms. Meanwhile, the guards of the prison are involved in a fantasy prisoner league (think fantasy football, but with points for things prisoners might do or get in trouble for). The guards see what is happening and have to decide to whether or not to intervene.
Asymmetric Information – the two guards outside of the laundry room have access to information the other guards in the league do not. Further, their decision to intervene or not will directly impact points in the game. Could use this to talk about how asymmetric information can affect the outcome of negotiations, trade, games, etc.
Cost-Benefit analysis – the guard explicitly uses this term, which I love, when deciding if they are going to intervene. C Block will undoubtedly retaliate so is the possible ensuing violence worth the potential benefit of points in the game. The guards have the compare the options before making a decision.
Data is trying to formulate a battle plan for Commander Riker, but he’s assuming that Commander Riker is rational and knows that Data has analyzed his move. Data takes it a step further and hypothesizes that Commander Riker knows that Data knows that the commander has a battle plan. Full information is a tough assumption about rationality, but bounded rationality lets us assume that people have limitations but still respond to incentives in a predictable way. While perhaps a human failure, most of society does not operate on the same level as Data.
Thanks to Peter Nencka for the clip suggestion!
Colleen and Matt are back from their wedding, but they haven’t written any thank you cards. Joan tries to drop hints by buying them thank you cards, but now she’s gotten to the point of just telling them they need to write thank you cards. Colleen realizes they need to do this because they want gifts later for their baby shower. This self-interest has sparked an idea! While it may be fair to write each person an individual card, Colleen and Matt realize it’s much more efficient to make a thank you video that people can share. The gesture isn’t well received at brunch. Often, improvements in efficiency (in this case making a video and saving the couple time) come at the cost of equity (many family members feel this isn’t fair).
The girls go out drinking at a new bar that focuses on large social causes, like childhood hunger and sex trafficking. From a behavioral standpoint, highlighting the important of social causes can cause people to pay more for their goods and services because they feel like they are making a bigger impact. The girls aren’t as impressed with the framing.
Thanks to Alex Witowski from Course Hero for the reference
How can we convince people to drive a safer speed? Kevin Richardson proposed setting up a speed camera (which are common across Europe) and take some of the money that is spent on ticketing speeders to redistribute to drivers who were driving the correct speed. Instead of using the potential fine as an incentive to discourage bad behavior, it cane be re-framed as an opportunity to be rewarded for good behavior.
Cut your cell phone expenses in half and all of a sudden you feel a bit richer, but does that mean you think you should be driving a significantly more expensive car? When incomes increase, we tend to purchase more items, but luxury goods require a pretty substantial increase.
People will go to great lengths to get “free” wifi even though they may not realize the cost associated with the decision. In this commercial for Qwest Communication, they try to offer wifi where people actually want to go.
In his attempt to transform the Oakland Athletics, Billy Beane tries a revolutionary new approach to scouting players based on their productivity rather than purely on how they look on the field. During one of the montages, Beane expresses that his desire to win is dwarfed by his hatred of losing. He keenly tells his player that there is a difference between the two. His attitude is the mindset of prospect theory and loss aversion.