In this episode of Modern Family, Luke lands a job at a golf club and hires his sister Haley as a beverage cart worker. Despite her occasionally off-putting customer service, she consistently earns the highest tips, making her Luke’s most valuable employee. Her performance raises eyebrows, but not enough for Luke to replace her.
Psych – If You’re So Smart, Then Why Don’t You Know Game Theory?
Two teenagers are suspected of involvement in a murder they previously predicted. When police investigators attempt to scare them into confessing, the teens confidently point out that the detectives clearly don’t understand game theory or the prisoner’s dilemma. Rather than pressuring them together, the detectives could have separated them and offered each a plea deal for confessing first. That strategy would have created incentives for both to confess, revealing the truth.
Thanks to Mati Rogers for submitting the clip!
Friends – A Selfless Good Deed
Phoebe and Joey engage in a spirited debate about whether any good deed is truly selfless. Joey argues that all good deeds ultimately make the person feel good, so they’re not entirely altruistic. Meanwhile, Phoebe insists that true selflessness is possible. As the conversation unfolds, the discussion centers on motivations and emotional payoffs.
This clip is an engaging way to introduce utility maximization. Joey’s argument that people help others because it makes them feel good offers a humorous entry point into the idea that individuals make choices to maximize their own utility, even when the actions appear altruistic. It also sets the stage for deeper classroom discussions about rationality, behavioral economics, and how utility functions may include emotional satisfaction, not just material outcomes.
Thanks to Charlie Ben-Nathan for the clip submission!
The G Word with Adam Conover – Misaligned Medical Incentives
While doctors are likely to be focused only on saving lives, medical insurance companies may be focused on increasing the quantity of healthcare a person receives. In this brief scene, we consider whether it’s appropriate for insurance companies to charge without consent and whether doctors may be incentivized to do more than necessary to increase earnings.
The G Word with Adam Conover – Unintended Consequences of Drones
While drones provide a level of safety for US military members, they also create an incentive problem for the military. Now that it is easier (and safer) to strike foreign targets, the US uses drones to attach more targets than they would if they hadn’t been invented. This unintended consequence has resulted in thousands of civilian deaths and an increased reliance on deadly technology. This is also another example of a moral hazard in which economic agents take increasingly risky actions because they have been safeguarded against the risk.
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!
Superstore — Election Day
It’s election day and Cloud 9 has placed pamphlets in the break room encouraging employees to vote for anti-union candidates. Cloud 9 knows that unionization could result in much higher labor costs, so they spend that money to encourage workers to not form a union. This form of managerial opposition is part of the explanation for the decline in unionization rates in the United States.
Mumbai Police — A Solution for Noise Pollution
Mumbai drivers are apparently notorious for honking, even when the light is red and people can’t move. The Mumbai police decided to incentivize drivers in order to reduce some of the noise pollution in the city. The police installed noise meters and if the decibel level reaches a certain threshold, the timer on the lights resets. A message flashes to let drivers know that the more they honk, the longer they wait!
Another fun policy intervention occurred in Europe to help drivers slow down.
Disjointed — The Role of the Federal Reserve (Conspiracy)
In a “puff and paint” party, some patrons of a local dispensary have gone a bit too far in the describing the role of the Federal Reserve. While the stated goals of the Fed are price stability and full employment, this hallucination has the Fed at the center of a universe-wide conspiracy. Bloomberg has a podcast that looks at why so many conspiracy theories seem to form around the Federal Reserve.
My former student, Luke, sent me this clip. You should follow him on Twitter!
Superstore — Incentives
Cloud 9 has divided employees into two teams to see who can sell the most stuff by the end of the day. The winning team will earn a pizza party, but Glen is surprised that employees aren’t participating. He didn’t reveal that the winning team also gets $100 per member, which is a much better incentive for the employee. As Amy notes, for incentives to be effective, they need to be announced before the start of the competition.