Tag: willingness to pay

Community — Chicken Finger Shortage

Chicken fingers at the school cafeteria are a hot commodity! People are racing to the cafeteria to get them and demand is high, but they often run out before everyone can be served. If prices were higher then fewer people would want chicken fingers and there may be enough for everyone to get some, but instead, a shortage ensues. The original fry cook skims some of the tenders to give to select people, an example of inefficient allocation.

A group of close friends decides to take over the operation (like in a mafia movie) so that they can determine the allocation of this scarce resource. This group begins skimming the fingers as well and reselling them to others in the school at higher prices so that they can profit from the shortage.

Thanks to Sarah Corrigan for the clip recommendation!

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Futurama — A Can of Old Fish

The gang heads to get some pizza and Fry wants his friends to experience anchovies, a type of small, salted fish. It turns out that these small fish were overfished and the population collapsed. Zoidberg even mentions how sorry he was that his people kept consuming them because they didn’t realize they were a common resource, subject to the tragedy of the commons.

Fry is incredibly rich, and wishes he could bring them back. He at first notes that even incredibly wealthy people aren’t able to purchase everything. At an auction, he finds that there is exactly one can left in the known universe and decides to bid all of his money for the “can of old fish”

While we normally wouldn’t pass judgement on someone’s preferences, it’s hard not to believe that this could a good example of a winner’s curse. Fry’s willingness to pay for the can of fish may not be $50 million, but the utility from winning the auction could be worth that.

Thanks to Jessica Pritchard for the clip suggestion!

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JoJo’s Bizarre Adventure: Stardust Crusaders — Negotiations

In this anime scene, Joseph teachers viewers how to haggle for sandwiches in a market. While shop owners may try to start with a high price for foreigners (perhaps as a price discrimination technique), requesting lower prices may help identify the sellers’ willingness to accept.  The benefit of trade and exchange is a mutual coincidence of wants. The two are able to find an acceptable trade, and thinks to the storyline, we can even calculate consumer and producer surplus!

Thanks to Lynne Tierney and Edison High School for submitting this! Lynne shared that a student in her class shared this video after going through a negotiation simulation.

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Christmas with the Kranks — Hickory Honey Ham

This scene is from the movie Christmas with the Kranks involves a specific type of ham that has been sold out and Mrs. Krank needs one because it’s Christmas Eve and her daughter flew in for Christmas.  She pays above the sticker price of the ham because it was the last one available in the store. Because there is only one ham left and it doesn’t matter how much the ham costs, Mrs. Krank will buy it.  This means that Mrs. Krank’s elasticity for hickory honey ham is very inelastic.

Thanks to Salvatore Pollastro for the summary and the clip!

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The Simpsons — Pay What You Want

Homer and Lisa go to the Springfield Museum, but Homer isn’t sure he understands the entrance policy. He checks with the attendant, but doesn’t know why anyone would want to pay the suggested donation when they could go in without paying anything. Because the museum is available to everyone, regardless of whether they pay, it operates similar to a public good. The problem? Public goods are subject to free riders, like Homer.

Asrar Chowdhury has a great summary of this episode on The Daily Star as well.

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Shameless — Hipsters in a Bar

In this clip you see a bar that’s on the South Side of Chicago. The bar is usually dead but very recently “hipsters” discovered the bar. They thought that the snide Russian bartender and expensive drinks made the place different and appealing to them. This bar serves cheap low end alcohol and in the video you can see price discrimination happening. The prices start to change and become higher when the bar serves the hipsters because they are able to pay those high prices versus the people from south side that can’t. The hipsters are also not realizing they are being scammed when the low end vodka is put in a more expensive brand’s bottle.

Thanks for the clip and summary Fiona Brandman!

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The Hudsucker Proxy — The Hula Hoop

This is a clip from the movie “The Hudsucker Proxy” (1994). In the scene, the store owner have a hard time selling the Hula Hoop. He kept lower the price but still no one wants to buy the Hula Hoop even he end up giving them for free with any purchase. He then throw all them out of the store and one of them accidentally bump into a boy. The boy start playing with it and the other kids saw it. After that, they all run to the store for the Hula Hoop. As more and more kids tried to buy a Hula Hoop, the price goes up again and even higher than before.

This related to the idea of demand and supply. At first, the Hula Hoop was not popular for kids so there’s no one wants to buy it. However, after the kids saw the boy playing with it, their preference change. Preference can change the demand of a product. When the demand increase, the price of the product and the supply also increase.

Thanks for the clip and summary Yi Chun Liu.

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One Tree Hill — Boy Toy Auction

The Boy Toy auction gets a little heated as the ladies of One Tree Hill are down to the final boy, Nathan. The auction values start to get high, but they are intent on not letting the other ladies get Nathan. They work together to get the bid up to a point where no one else can participate.

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