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Tastes & Preferences (Micro)


6.3 Brides for Seven Brothers (8/31/1999)

Sex-selective abortions in China, South Korea, and Taiwan have resulted in excess of male over female births.

Keywords: abortion, amniocentesis, birth ratio, boys, bride, China, girls, infanticide, one-child policy, pension, son preference, South Korea, Taiwan, ultrasound

Advantage vs Behavior (7/7/2006)

Theory of advantage is not theory of behavior.

Keywords: advantage behavior, Boulding, consumer behavior, marginal benefit, marginal cost, marginal optimizer, marketing, optimization

Bad Decision - TED lecture (2/28/2014)

Bad decisions are made because people are bad at figuring out the odds and values of possible events.

Keywords: availability heuristic, expected value, gain, loss, odds, shifting comparisons

Busy secretary - The principal-agent problem (11/2/2011)

The principal-agent conflict is endemic in employer-employee and supervisor-supervisee relationships.

Keywords: principal-agent problem

Doing It Now or Later (8/20/1999)

People who believe that they will procrastinate when faced with immediate costs and prematurely appropriate immediate rewards may counteract this tendency sometimes to their own benefits.

Keywords: addiction, costs, misbehave, naive, present bias, present-bias, procrastinate, procrastination, rewards, self control, self-control, smoking, sophisticated, time inconsistency

Easy Money (12/21/2001)

If the insured takes less care to prevent loss, the insurer might be subject to unanticipated loss because of such moral hazard.

Keywords: ABC, Buena Vista Entertainment Inc., deductible, easy money, Goshawk Syndicate, insurance, loss, millionaires, moral hazard, ratings

Eat Your Cake Now (11/2/2011)

Who doesn't like to eat their cake and have it at the same time?

Keywords: budget deficit, IOU, Social Security, Trust Fund

Eat Your Cake Now - cartoon transcript (6/22/2012)

Who doesn't like to eat their cake and have it at the same time?

Keywords: budget deficit, IOU, Social Security, Trust Fund

Eggs for Sale (4/14/2000)

Selling of renewable human eggs to infertile women may be mutually beneficial, but are fraught with ethical overstone.

Keywords: broker, donation, donor, egg banks, eggs, fee, fertility, IVF in vitro fertilization, match, sperm, technology

Faking It (9/26/2011)

Scarcity value does not depend on technical competence but scarcity itself.

Keywords: branding, counterfeit, external benefit, free ride, information, market signaling, scarcity, shadow branding

Flat-rate Pricing (6/22/2006)

Flat-rate pricing may increase the bottom line of businesses when consumers over-estimate the amount they might consume and under-estimate the cost of un-restrained use.

Keywords: all-you-can-eat, Boston, flat-rate pricing, Greyhound Bus, gym membership, health club, procrastination, Red Lobster, variety

Framing Perceptions (6/22/2006)

Since people are risk-averse with respect to gain and risk-seeking with respect to loss, their choices can be easily manipulated by whether an offer is framed as a gain or a loss.

Keywords: expected value, framing, gain, loss, perception, risk averse, risk seeking

Happiness - Absolute or Relative? (6/4/2004)

If happiness depends on one's relative wealth, one will never be absolutely happy as long as there are others who are even richer.

Keywords: leisure, negative externality, relative happiness, status, wealth

Harvesting the Future (12/21/2001)

Injury victims might be prevented from selling their streams of future settlement payments for a lump sum for fear that they might not spend their quick cash wisely.

Keywords: annuity, car loans, credit card balance, discount, factoring, future payments, interest rate, lottery, lump sum cash, present value, structured settlements, time preference

Health Risk is a Matter of Life and Death (6/22/2006)

Health insurance premiums tend to be high for individual policies because of adverse selection and moral hazard.

Keywords: adverse selection, auto insurance, coverage cap, deductible, defined benefit, defined contribution, health insurance, health savings account, moral hazard, policies, premiums, third-party payment

If It Is Too Good To Be True! (10/8/2017)

The simple-minded addiction to the efficient market hypothesis can lead to super-rational behavior.

Keywords: cartoon, efficient market, rationality

Image Polishing (8/20/2009)

Image polishing is a powerful incentive for charitable donations.

Keywords: blood, charity, donations, image, name recognition, neuroscience, tax deduction

Is Somebody Watching? (10/8/2017)

People behave better when they suspect others are watching.

Keywords: behavioral economics, cartoon, mirror, situational honesty

Life Is Illogical (10/8/2017)

Intransitive choices are illogical but make life manageable.

Keywords: Arrow Impossibility Theorem, intransitive choices

Life by default (1/16/2006)

Present bias and inertia lead to low enrollment in 401(k) retirement plans even though employer matching of employee contribution is quite generous.

Keywords: 401(k) retirement plan, default position, enrollment, opt in, opt out, participation, present bias, rationality

Looks Matter (11/5/1999)

Looks matter when most people are plain looking, even in jobs where looks do not affect job performance.

Keywords: appearance, beauty, looks, salary., scarcity, wage

Luck of the Draw (9/7/2005)

Luck may be just as important as fitness in determining who survives the market test.

Keywords: citations, fittest, human capital, luck, piano competition, preferences, survival, talent, taste

Not Now, Later! (8/19/2009)

Self-control overcomes the present-bias effect and can be enhanced through learning or external cues. -

Keywords: 401(K), default position, delayed gratification, marshmallow, present-bias effect, self-control

Private Truths and Public Lies (10/6/2000)

Private preferences, long suppressed by public sanctions, may suddenly surface to overthrow the status quo when a precipitating spark reveals a critical mass of fellow dissenters.

Keywords: bandwagon, critical mass, domino effect, preference falsification, private preference, public preference, threshold

Sharp Shooters - nudging in action cartoon (10/8/2017)

If you want your toilet floor clean, make urinal use into a target practice. A little nudging can go a long way.

Keywords: cartoon, externality, nudging, spillover effect, target practice, urinal

Statistical Victims (6/22/2006)

When identifiable victims are involved, people are willing to spend disproportionally more resources to save a few lives rather than spending the same amount to save a much larger number of statistical victims.

Keywords: collective action, health care, identifiable victim effect, Jessica McClure, lead paint, organized group, proportionality effect, risk, single-interest group

The Evolution of Defectors and Cooperators (8/13/1999)

There is selective advantage in being always honest even when it may be disadvantageous to do so at times.

Keywords: advantage, charitable, cooperators, Darwinism, defectors, detection, evolution, free ride, payoff

The Origin of Predictable Behavior (11/5/1999)

Economic behavior is predictable largely because bounded rationality leads people to adopt rules of thumb which display greater regularity than does optimization.

Keywords: behavior, bounded rationaltiy, flexibility, institutions, optimization, predictability, rationality, regularity, reliability condition, rules, sunk costs, uncertainty

Trust and Betrayal (5/9/2006)

Aversion to human betrayal may reduce potentially beneficial exchanges.

Keywords: aversion, betrayal, game, motive, trust

Unsinkable Sunk Cost (6/17/2004)

Health club usage patterns clearly show that members are emotionally attached to sunk cost even though most economists think that rational incremental decisions should only compare marginal benefit with marginal cost.

Keywords: health club, irrational choice, rational choice, sunk cost

Variety Is the Spice of Life? (7/27/2000)

Thanks to the law of diminishing marginal utility, couples in a heated love relationship manages to divert exclusive time spent together to other higher yielding activities.

Keywords: diminishing marginal utility, diminishing returns, love, satisfaction, variety