“Why some buyers pay more than others.” Robert Frank begins the so-named chapter of The Economic Naturalist with this statement: The law of one price applies most forcefully in perfectly competitive markets—roughly speaking, markets like those for salt or gold in which numerous suppliers sell highly standardized products. Frank goes on to probe the paradoxical-seeming … Continue reading The Law of One Product: Robert Frank, Tesla, and Hurdle Pricing
Economics
A Black Friday question for The Economic Natualist
In honor of Black Friday, I have a question for the ‘Economic Naturalist’. My wife and I both received Thanksgiving sale catalogues from a clothing chain retailer. A sticker on the front of my wife’s catalogue offered 40% off a qualifying purchase; the sticker on the front of mine offered 50% off. Why would a … Continue reading A Black Friday question for The Economic Natualist
Sanforized* Economics: A Look at Shrink Theory
A week or so ago, Alvaro La Parra-Perez tweeted a link to a Rafael del Pino master conference presentation (think of this as being asked to address bigwigs by Brookings Institute or American Enterprise Institute) by John Joseph Wallis of the University of Maryland. Wallis, an economic historian, entitled his presentation “The Nature of Long-Term … Continue reading Sanforized* Economics: A Look at Shrink Theory
William Baumol (1922-2017)
"A distressing phenomenon is occurring throughout the industrialized world. Many community services have been deteriorating - fewer postal deliveries, larger classes in public schools, less reliable garbage pickups - even though the public is paying more for them." --Baumol and Blinder, Macroeconomics: Principles and Policy, 5th Ed., 1991 I so hated economics in college that … Continue reading William Baumol (1922-2017)
winter tomato 