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Tag Archives: Economics
Why are airline boarding procedures so inefficient?
Here is one hypothesis: Because consumers want and value assigned seats. Overhead bin space is scarce as well, and airlines allocate that to their best customers through early boarding. In other words, there are competing business objectives. It turns out that … Continue reading
More evidence that applied economics is not a science …
Economists still can’t agree on whether High Frequency Trading (HFT) is good or bad. Dude, where’s my trade?
“Living with Water Scarcity”
That is the title of David Zetland’s latest book. In David’s words: Do you worry that there is not enough water for people, the economy, and environment? Do you wonder if the water in our taps and rivers is safe … Continue reading
Model this: nice guys finish last?
The Iterated Prisoner’s Dilemma, one of the most important models in game theory, predicts that business firms that screw their customers should fail, not succeed. But check out this recent report in Bloomberg Businessweek: The most hated airline is also the … Continue reading
The Coase Theorem and the Game of Chicken
Note: this post was revised and updated on 13 April 2014. There are only two parties to this particular dispute, a public agency and a private cattle rancher (thus so-called “transaction costs” are low), so what’s preventing them from negotiating a … Continue reading
Do fake prediction markets work?
There’s a new information quasi-market called SciCast based on “crowd sourcing” methods and reputation effects, not on prices–i.e. participants who make the most accurate predictions move up a symbolic scoreboard but are not paid with real money. You could argue that one well-designed quasi-market is … Continue reading
Why do consumers still purchase GM cars? *
According to this working paper by professors Susan Helper and Rebecca Henderson in the Harvard Business Review, GM’s market share in the US fell from 62.6% to 19.8% between 1980 and 2009 … In other words, a large fraction of US consumers … Continue reading
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Tagged Consumer Behavior, Economics, General Motors, Rational Choice
2 Comments
Thoughts On Northwestern Football Unionization
Originally posted on Cheap Talk:
These are my thoughts and not those of Northwestern University, Northwestern Athletics, the Northwestern football team, nor of the Northwestern football players. As usual, the emergence of a unionization movement is the symptom of a…
The tragedy of the outer space commons?
Check out this fascinating paper Earth Orbit Debris: An Economic Model in which the problem of space debris is modeled as a negative externality. What is the optimal number of space satellites, and who decides? Do you believe there are already too many … Continue reading
Economists are not scientists
Sorry Professor Mankiw, but economics is not really a science. Economics is politics and normative value judgements all the way down, and you yourself end up admitting as much in your most recent essay in the Sunday Times. So why do … Continue reading
prior probability 