Good Will Hunting — Value of a Degree

In this iconic scene from Good Will Hunting, Matt Damon gets into a confrontation at a bar with an undergrad who is trying to embarrass his friend who is trying to impress a group of young women. In the process of humiliating the other student, the two get into a key distinction on the value of a college degree. Someone could obtain the same knowledge of a college degree from accessing a public library, but the lack of an actual degree (a signal perhaps) limits the job opportunities available for many.

Thanks to Charlie Clarke for the post!

Curb Your Enthusiasm — Anonymous Donations

 

 

Larry David makes a large donation to the National Resources Defense Council, a non-profit environmental advocacy group, but Larry is quickly upstaged by an anonymous donation that he finds out is made by Ted Danson. Larry felt like he was doing a great thing by donating to the fund, but felt it was a truly altruistic donation. He believes the anonymous donation by Ted Danson is a better deal because anonymous donors get more recognition for appearing to not care about the recognition, even though they go around telling people they were the anonymous donor.

Thanks to Nautilus and Moblab for the clip suggestions:

 

John Mulaney — Majoring in English

 

After receiving a donation request from his undergraduate university, Mulaney questions the purpose of college. After spending $120,000 to major in English, he realizes that he may not have actually gotten out of it what he thought he would (human capital), but instead received a lot of consumptive benefits. He doesn’t mention the signalling aspect of a college degree, but it’s implied through his analysis on the lack of training he received.

A League of Their Own

 

Dottie decides to quit right before the World Series, and her coach isn’t too happy about it. One of the most salient topics taught in a section on behavioral economics is the idea of ignoring sunk costs. When things get boring or tough, a rational agent may decide to quit. Dugan believes that baseball is a great separating equilibrium and that it shows who’s tough and who isn’t. If baseball were an easy game then the it wouldn’t be a beneficial signal to everyone watching.

Thanks to Jose Fernandez for the reference!

Budlight Hitchhiker Commercial

When one party has more information about themselves than the other party, economists describe this situation as asymmetric information. We know a lot about our “true” selves, but we can use signals to send to other parties to either conceal our true selves or hide a characteristic we don’t want to reveal. In this clever Budweiser ad, the hitchhiker is trying to conceal his real intentions by carrying a case of Bud Light.

Rihanna Tap Water

 

Would you buy tap water if it was marketed by Rihanna? This comedy clip works as a great introduction to the idea of product differentiation and marketing. It can also be used to talk about why a celebrity would endorse a product and the signalling value of hiring those celebrities.

Credit: Michael Coon

Neal Brennan: College Loans

A student in my Labor Economics class shared this great clip of standup comedian Neal Brennan discussing why banks don’t want to loan for college degrees. This is a great clip to talk about capital market imperfections and even signalling.

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