Thesis Corner | Kenji Sekino

Welcome back readers! This week on Thesis Corner we have another interview for you, but first have you heard about the PIE Conference happening on campus this weekend? Economics department professor Lisa Nunn will be one of the speakers tomorrow, along with many other campus voices about what frames their worlds. Check it out on Facebook. Also, if you’re an Economics student, we will be having Social Hour this afternoon from 4-6pm at Engine House No. 9. The department will provide the appetizers and conversation, all you need to do is show up! Now, here’s Kenji Sekino and his thesis on crime economics, “When Contempt Causes Animosity: How criminals perceive criminal Continue reading Thesis Corner | Kenji Sekino

Signaling and the Dutch East India Company    

About a month ago, NPR’s podcast planet money aired an episode on shorting the stock market, and specifically, the very first short in the stock market. This may be one of my very favorite episodes they’ve ever done, for two reasons. The first reason is that it represents the beginning of a very interesting (albeit dangerous) phenomenon in the stock market. The second is how signaling gave birth to many of the features of the modern stock market. This second part is interesting, and I’d like to give some explanation as to how it works, and then, how it birthed Continue reading Signaling and the Dutch East India Company    

The Economics of Buzzfeed

It seems like one can’t go anywhere on the internet without being exposed to some sort of obnoxiously catchy title that is practically begging to be clicked on. Whether it’s a slideshow of before-and-after weight loss pictures that will “blow your mind,” or an article talking about an obsolete cultural phenomenon that “only 90s kids will understand,” these links have permeated nearly every social media site and search engine. These attention-seeking articles are known as linkbait. Linkbait (also known as clickbait, although some people argue that they are different), is a type of digital advertising technique that showcases a story with a provocative Continue reading The Economics of Buzzfeed

Spreadsheets, Jeopardy, and Automation

At first blush, Jeopardy and spreadsheets might seem like they don’t have a lot in common. However, together they illustrate the quantum leap economic automation is poised to take. NPR’s Planet Money recently ran a great episode on the genesis of computer spreadsheets. In a nutshell, before computer spreadsheets accounting clerks kept giant paper spreadsheets by hand. This was a laborious, error-prone system. Once computer spreadsheets arrived on the market, those clerical positions began to evaporate. However, non-clerical accounting positions expanded rapidly. The computer spreadsheet also allowed the financial sector to grow rapidly. So there was a loss of jobs due to automation, Continue reading Spreadsheets, Jeopardy, and Automation

Ambiguity Aversion: Avoidance of the Unknown

If you are familiar with the idea of risk aversion, our innate preference for a sure outcome over a gamble that would result in an equivalent or higher expected value, the concept of ambiguity aversion is very similar. It claims that people show a preference for known risks over unknown risks. Ambiguity aversion differs from risk aversion because it applies to situations in which probabilities of outcomes are unknown, while risk aversion is based on scenarios where a probability can be assigned to each possible outcome. The famous experiment used to describe this idea, the Ellsberg paradox, begins by presenting Continue reading Ambiguity Aversion: Avoidance of the Unknown

The Shoplifting Fee

Most stores have strict rules and regulations they follow when it comes to shoplifting. The purpose of loss prevention departments is to spot thieves and recover stolen items. When a person is caught or suspected of using the five-finger discount, many stores have the very limited right to make citizen’s arrests and/or search the individual (e.g. shopkeeper’s privilege). However, some stores are no longer arresting or searching suspected shoplifters, but instead giving people a choice: they can take a $320 class and walk out scot-free, or the store calls the cops. The Corrective Education Company (or CEC) is a Utah-based business founded Continue reading The Shoplifting Fee