Tag: private benefits

Family Guy — Drive-Thru Externalities

 

Joe wants to go on a cross country road trip, but he’s being a bit of a bother. He isn’t taking into account his actions and how they may be impacting others. For example, his decision to goof off in the drive-thru line for food bothers Cleveland, but also the people waiting in line to get food. Negative externalities occur when an individual is making private decisions (like goofing off), but not considering how that impacts the people around them (like the others in line).

This clip was submitted by Isaac Messinger.

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Super Troopers — Rivalrous Syrup

 

The boys get into a chugging match to see who can put down a bottle of maple syrup the fastest (they’re in Vermont!), but it bothers some of the other patrons who would like syrup for their pancakes. Not only do they not take into account the costs their actions impose on others, but we see a clear example of the rivalrous nature of private goods. While they don’t possess a property right in order to sell the syrup to other diners (the restaurant would have that right), their use of the product prevents others from being able to consume the product.

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Dumb and Dumber — Most Annoying Noise

 

Harry (Jeff Daniels) and Lloyd (Jim Carrey) pick up a hitchhiker, but proceed to drive him crazy with their childish antics. While the two of them see no problems with their behaviors, they don’t take into account the cost they impose on the hitchhiker. The hitchhiker quickly realizes that the cost of the trip may not be worth the benefit he gets from the no-cost ride.

Thanks to Michael Romano for the suggestion.

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Downsizing — Private vs Social Perspective

 

 

A scientist has created a way to solve overpopulation: shrinking people down to a fraction of their size and having them live in small communities. The movie shows a man (Matt Damon) at a company lecture and consulting with a realtor for a home in a small community. The interaction between the two demonstrates the personal and social tradeoffs of a positive externality. The family shrinking themselves down is doing it for personal reasons, namely to save on living expenses and to no longer work, but there are social benefits at play as well. Having everyone shrink to a fraction of their size can help alleviate overpopulation and reduce human waste.

Thanks to Amanda Yaya for the suggestion

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National Science Foundation — Tragedy of the Commons

 

The tragedy of the commons are predictable outcomes when looking at grazing lanes, highways, fisheries, and forests. This quick video from the National Science Foundation is a short introduction to the issues that plague common resources. The ending portion of the video paints the tragedy in a much broader light by highlighting the growing need to preserve nature as populations continue to grow.

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TedEd — What is the tragedy of the commons

 

Here’s a great opening video for teaching common resources and the tragedy of the commons. This version of the video actually does a great job explaining the math of the overfishing problem and how you need to have enough reproductive pairs in order to maintain the optimal level of the stock. This video could be used a pre-lesson video to introduce the topic.

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This is Us — Who Has the Right to Light?

Kevin and Randall are two brothers who share a room. In this clip, Randall is trying to finish his homework by his bedside underneath a desk lamp. Being it is 2:00AM, Kevin is trying to sleep and is annoyed by the added light in the room. An altercation ensues, prompting Rebecca to intervene. After an offer from Randall to move to a different room, Kevin barges out, retreating to the basement.

The cause of the initial problem is Randall’s desk light, which acts as the negative externality in the situation. Randall is the producer of the externality, because the opportunity cost of shutting off the light and going to bed is too high in the face of his other responsibilities, such as football and homework. Kevin’s opportunity cost, however, conflicts with Randall’s preferences, because the opportunity cost of losing sleep is too high in light of his commitment to football. In searching for a solution, Randall makes a transaction cost by offering to move into the kitchen, since this offer acts as a form of negotiation. The problem is eventually ended through Kevin’s internalization of the externality: moving to the basement. It is through this action that Kevin utilizes the Coase Theorem to eliminate any more transaction costs and to end the problem efficiently.

Thanks to Megan Vareha for the clip and the summary!

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Anchorman — Sex Panther Cologne

 

An example of a negative externality is displayed in the movie Anchorman when Paul Rudd’s character, Brian Fantana, sprays his so-called desirable perfume, Sex Panther, which is claimed to contain real bits of panther and is also illegal in nine countries. He states, “60% of the time, it works everytime”. After he applies this stinky spray, he goes to talk to Veronica Corningstone. As soon as he walks into the busy room, everyone leaves and coughs in disgust from the scent of this special cologne.

Thanks for the clip Allie Ziolkowski!

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Axe Commercial

In this quick Axe commercial, we can observe both positive and negative externalities associated with cologne use. The original wearer didn’t realize the (good and bad) impact the second elevator guest would receive from his use of Axe Body Spray, and thus didn’t take that into account when he was applying it.

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