Jackson’s grandfather dies and leaves him a very large inheritance, $250 million to be exact. Jackson feels like this is a burden for personal reasons, but Maggie chimes in that it is a burden because it’s hard to know how to spend that much money. She goes through all the things he could do with it and how having that many options can be tiring. This is a classic example of the overchoice problem where consumers can become overwhelmed with options. There is small note in Maggie’s speech where she says that Jackson could buy a vineyard and never work again, which would be reflective of a pure income effect.
The Colbert Report — Tim Harford
Stephen Colbert interviews economist Tim Harford about his then-recent book, Logic of Life. Harford and Colbert discuss a number of items that people may consider irrational, but actually turn out to be rational like voting, unprotected sex, and smoking. The entire discussion focuses on the central idea of the definition of rationality.
The Colbert Report — Roland Fryer
Stephen Colbert interviews Harvard economist Roland Fryer about his pay-for-learning system in Chicago, Washington DC, and New York City. Fryer discusses the incentive mechanism that his team developed in order to encourage learning across those three cities.
Footloose — Playing Chicken with Tractors
Two high school students decide to play a game of chicken on a dare. In this classic game, two contestants head straight for one another and the winner is the one who doesn’t bail or turn away. If both participants turn away then they both are deemed “chickens.” However, if both stay the course then they will crash into one another and possibly die.
Thanks to Austin Boyle for the clip!
Christian Finnegan — Fat Tax
Christian Finnegan knows he isn’t in the best shape so he’s decided to join a gym. He figures that at least if he never goes to the gym then he can consider the gym membership a form of fat tax. This framing adjustment could still have the same impact as working out since he now has to internalize his decision to eat unhealthy foods.
Wanda Sykes — Wanda’s Got a Gun
Wanda moved to New York and her family told her to go out and a buy a particular type of gun, one that would end up costing her $400. Falling victim to the sunk cost fallacy, Wanda feels like if she spends $400 on a gun then she needs to make sure that it gets used, even if it means using it on friends that she invites over.
Wanda Sykes — Being Tested
Wanda Sykes describes how she tests her husband when he doesn’t even know he’s being tested. She’s okay with a sink of dirty dishes one or two days, but if it continues for much longer than she’ll extract her revenge (later in the clip she talks about how all the fury comes out when they’re having sex). This tit-for-tat behavior where one party waits for the other one can turn into a situation where both parties are eating off of napkins and no one is cleaning anything.
Ron White — The Death Penalty
Ron White describes how his state is different than California and one of those ways is through the use of the death penalty. In other states, they may be trying to cut back on the use of the death penalty for heinous crimes, but Texas appears to be trying to put in an express lane. The death penalty, while controversial, is often used by states as a credible threat and a deterrence mechanism in order to reduce future crime.
Ron White — Best Response
Ron White, in They Call Me Tater Salad, discusses an interaction with a fan who wanted him to know that it’s illegal to shoot someone in the back regardless of what crime they’ve committed against you. Ron quickly points out that you could just shoot them in the leg in order to get them to turn around, which means that the optimal strategy is to never turn around.
Wanda Sykes — Someone Else’s Kids
Wanda Sykes describes how she treats her nephews is much different than how she would treat her own kids. She’s not interested in making sure they eat healthy or go to bed at a decent hour because they aren’t her children. This is a great illustration of the principle-agent problem in that the two agents, Wanda and her sibling, don’t have the same motives.