Northwestern University unveiled one of the first dynamic pricing models for college sports in 2014. Students can reserve seats for upcoming sporting events and if prices fall to lower prices because of low demand, anyone who paid higher prices would be refunded. This incentive was meant to encourage students to reserve their seats early for big games. The two also introduce a Dutch Auction for tickets where students can set their reserve price and if they fall within the window then they’ll be assigned tickets.
The Real — Thanksgiving Tap Out
Guest co-host, Ashanti, mentions that expensive flights during Thanksgiving should be “tapped out” because a lot of people need to be with their families during Thanksgiving. This relates to the concept of demand and supply because the airlines know that when it is close to Thanksgiving, the demand for flights increases, and since most people are eager to be with their families, they are rather inelastic to the price change, so the firms take advantage of this and raise the price of the tickets drastically in order to increase their total revenue.
Thanks for the clip and summary Tammy Georgewill!
Marketplace — The Problem with NAFTA
A brief background of NAFTA and the problems of exiting NAFTA. A good discussion within the video covers the parties that gain and the parties that loses from NAFTA. A good note in the video is that the jobs that are lost are different from the jobs that were gained.
Reservoir Dogs — Why tip?
Mr. Pink (Steve Buscemi) describes why he doesn’t tip waitresses. His associates try to convince him along an equity argument by saying it’s the right thing to do and how they are exploited because their tips are taxed. Mr. Pink argues from an efficiency standpoint that if the waitresses aren’t happy with their pay then they need to relocate. He eventually concedes to tip $1 when he’s reminded that he didn’t pay for his food.
Film: Reservoir Dogs
The Simpsons — Profit Motives of Publishers
What if it does so, in order to make a profit, by producing things you think are of poor quality. When is profit seeking good? Does Apple prey on us by creating the iPads we love? Or is Lisa on to something here, suggesting that we should not buy things from publishers that don’t contribute to “culture”? This clip should provoke some good discussion, and is ideal for an economics class.
Thanks to F. Bailey Norwood.
John Stossel — Price Gouging
Is price gouging evil or is it the sensible economic decision when shortages arise? In this series, John Stossel explores price gouging around natural disasters. This topic is really good for discussing the tradeoff between equity and efficiency.
The Simpsons — Homer Wants a Ticket
Homer waits in line 8 days to grab a coveted ticket to a coveted event. His excitement is dismayed when a scalper, who happened to be first in line, decides to purchase all of the tickets for the event. Scalpers can serve as an efficient distributor of tickets, but many people don’t believe it’s fair.
If you love economics and The Simpsons, Josh Hall edited a book that may interest you.
Lots of Econ in This is The End (NSFW)
This is a little NSFW and has some mild language, but it illustrates tradeoffs really well. This is the End is a movie about actors playing fictionalized versions of themselves in an apocalypse. In this season, the actors are trying to decide how to divide their stockpile.
Friends — Efficiency vs. Equity of Splitting Meals
This great clip from Friends shows the equity/efficiency tradeoff nicely. It’s also a nice opportunity to bring up the idea of fairness. While splitting a check into equal parts is easier, it’s not always appropriate for people who don’t eat much.
Late Show: Uber CEO Discusses Surge Pricing
This is just a small clip of Stephen Colbert’s interview with Uber CEO, Travis Kalanick. This portion discusses surge pricing and how drivers respond to increases in demand. This clip also opens the door for discussions on efficiency vs equity.