Teaching Economics with Media
Superior products can provide companies with a short term barrier to entry in a market, but they aren’t usually long lasting. Beyond technological superiority, some companies may have service or quality superiority, as is the case with the Soup Nazi in Seinfeld. Offering a superior product allows the owner to treat customers rudely, offer high prices, and restrict output as he desires.
This clip is available thanks to Economics of Seinfeld.
In this Stossel segment, we learn about the history of the De Beers diamond corporation and their control of the diamond market. Stossel interviews guests and asks them to identify diamonds from knock-off rings, but most can’t tell the difference despite claiming to be capable.
One of the textbook examples of monopoly power comes from De Beers Diamond Corporation and their control over the diamond markets since the end of the Great Depression. In this short scene, Adam Conover covers the history on engagement rings and discusses the monopoly power that the De Beers company had in the market.
Adam Ruins Everything is a half-hour informational comedy were host, Adam Conover, debunks popular myths. Each episode is divided into 3 segments with some common theme. In the Spring of 2018, James Tierney and I sat down to go through all three seasons of Adam Ruins Everything to pick out examples in each episode that could be used in an economics course. If you’re curious about the paper, you can read about it here.
Sinbad travels to a popular city with goods from a country which is not only highly secluded, but up until this point has refused to trade with other nations. Sinbad, being the only one able to establish trade with them, sets up a shop in this popular city, knowing that his goods will sell quickly. Within the hour of setting up shop, a merchant comes by and buys out his entire stock and sells them for a higher price. Realizing his mistake of setting a low early price, and eager to try to learn more about the economy, Sinbad finds the merchant again in a bar and asks for his help. This clip shows the interaction between the two, as the merchant teaches Sinbad about how his mistake heavily put him behind, and how to avoid such a mistake in the future.
Since Sinbad was the only one who is able to get sell these products from the highly secluded country, he was a monopoly firm in the area. He was bested when the other firm arbitraged his product.
Clip and summary provided by Michele Killoran.
When a firm has monopoly power, they have the ability to charge higher prices for a reduce quantity (and sometimes quality) service. If consumers don’t have alternatives then they are forced to deal with poor customer service and unreliability. This comedy piece highlights a fictions cable company that actually admits they aren’t very good.
Adam Ruins Everything is a half-hour informational comedy were host, Adam Conover, debunks popular myths. Each episode is divided into 3 segments with some common theme. In the Spring of 2018, James Tierney and I sat down to go through all three seasons of Adam Ruins Everything to pick out examples in each episode that could be used in an economics course. If you’re curious about the paper, you can read about it here.
Eyeglasses in the United States can cost hundreds of dollars and that’s probably because 80% of glasses are manufactured by one firm under different brand names. Because they produce both luxury and basic brands, they are able to raise prices well beyond a more competitive price. Luxottica even owns many of the sunglasses stores, which gives them buying power over inputs.