Many students have expressed discontent with our current voting system, especially as it relates to the ideas of “choosing between two bad options” or “wasting your vote” on a third candidate. Many articles, bills, and petitions have called for electoral reform, along with celebrities such as Lady Gaga. In this article I will go over the economic idea of a social choice rule, or mechanism which describes how we can move from individual preferences to group preferences, or social preferences. For a primer on the economic idea of preferences, see last week’s post, Accounting for Taste: Ice Cream Preferences. One of the best articles Continue reading Arrow’s Impossibility Theorem: Can We Hit a Societal Bullseye?
You may have heard of Brandless, the e-commerce startup launched this year. The San Francisco-based company, founded by entrepreneurs Tina Sharkey and Ido Leffler, flaunts online groceries and essentials with an enticingly simple pricing model: everything is $3 or less. Why is it called Brandless? The inspiration for this online grocery store, Sharkey says, was the so-called “brand tax” (additional costs for shipping, warehouse space, etc.) on traditional consumer packaged goods (CPGs). In addition, Sharkey makes the claims that millennials don’t want to buy their parents’ brands and that there is an overwhelming variety of choices in grocery stores today. Continue reading Demand Without a Brand: Online Grocery Store Eliminates “Brand-Tax”
As a social scientist, I would just like to come right out and acknowledge my bias. Between chocolate, vanilla, and strawberry ice cream, chocolate is my favorite, followed by vanilla, then strawberry.This article is intended to explain a fundamental concept in microeconomics, consumer preferences, using a sweet example. To model consumer behavior, economists look at how consumers make comparisons between goods. Briefly, some notes on notation. If I said, “I like chocolate better than vanilla ice cream,” it would be written as Chocolate ≻ Vanilla. (Note, ≻ is not the same as >, which is used for ordering preferences) If I Continue reading Accounting for Taste: Ice Cream Preferences
“Wherever the Art of Medicine is Loved, there is also a love of Humanity.” -Hippocrates Typical notions of healthcare and medicine are intrinsically linked to benevolence. After all, the modern Hippocratic Oath states that, “I will prevent disease whenever I can.” It seems strange then that the total nominal spending on medicine in the U.S. exceeds $450 billion annually while the global pharmaceutical market is predicted to reach an annual value of $1.12 trillion by 2022. This paradoxical relationship between medicine and profit-maximizing firms begs some interesting economic questions, specifically how the drive to maximize profits impact the consumer’s well-being. Continue reading Intellectual Property Laws in the Pharmaceutical Industry: Facilitating Monopolies or Catalyzing Innovation