The Why Axis: Bribing People and Competition

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Here’s a delightful discussion of the main points in the first two chapters. Next Monday Geremia will be taking you for a ride along chapters 3 and 4, so please read along! Chapter one They dive right into the juicy stuff. What incentivizes people? Why are incentives so tricky? Gneezy and List hammer home the point that monetary incentives don’t always work in your favor. Sometimes, like for poor Rebecca and her daycare, putting a money penalty effectively makes the problem worse. As the authors explained, there’s lots of reasons for this. For starters, she set the penalty at $3 Continue reading The Why Axis: Bribing People and Competition→

The War on Drugs…in 1511

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Abyssinian goat herders may have been the first people to use the coffee bean for it’s psychoactive properties. The goat herders were likely to have observed their goats eating  red berries off one particular tree, Cofea. After trying the berries themselves the goat herders experienced the psychoactive properties of the berries, and somewhere along the line they learned to roast the beans to make coffee. Now, caffeine is the world’s most widely consumed psychoactive substance. And though it has become the world’s leading choice of stimulant, what happened before it achieved it’s popular status? Why was coffee banned with such force? Continue reading The War on Drugs…in 1511→

Continue along The Why Axis with Sound Economics

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In a Sound Economics post from earlier this week, Tesha introduced us to The Why Axis. If you liked what you read and are interested in reading along with us, we will be posting along the way.  Here is our current reading/posting schedule: Week of 3/21: Chapters 1 and 2 Week of 3/28: Chapter 3 and 4 Week of 4/5: Chapter 5 and 6 Week of 4/12: Chapter 7 Week of 4/19: Chapter 8 Week of 4/26: Chapter 9 Week of 5/3: Chapter 10 and 11 We would love to hear your comments and responses as we develop and share our Continue reading Continue along The Why Axis with Sound Economics→

Are Universities Turning into Hedge Funds?

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A recent article from The Nation claims that university endowments are being heavily invested in hedge funds. This “intersection between higher education and high finance” means that university money is torn between paying hedge fund managers and being spent on actual education resources. This criticism was first brought up regarding Harvard investing 15% of its $38 billion endowment in hedge funds. In reality, public universities are looking to hedge funds as well now that state aid is decreasing. Hedge funds utilize high risk methods for large returns, and often operate in convoluted overseas structures to avoid taxes. Investing endowments in risky hedge funds rather than investing Continue reading Are Universities Turning into Hedge Funds?→

Morocco Launches Gigantic Solar Power Plant

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To follow up on Nicky’s post about solar energy efficiency, Morocco has recently launched a power plant (called the Noor I) in the Sahara Desert that is capable of generating 160 megawatts of power. These solar panels cover thousands of acres of the desert (can actually be seen from space) and when the two other Noor plants are implemented they will offer renewable energy to over a million Moroccans. What are the economic impacts of this implementation? Right now, Morocco relies on imported sources of energy for 97% of its total energy use (according to the World Bank) while also having its electricity demand Continue reading Morocco Launches Gigantic Solar Power Plant→

Video Games: Just a Plastic Disk

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For all those Xbox, PlayStation, Wii owners out there, have you ever thought about why your video games cost you so much these days? The average game costs about $60 when it is first released and can go to about twice that if it includes bonus material. But if you think about it, the actual game is just a plastic disk. It can’t be that difficult or costly to produce. But you guessed it… individual games for consoles such as Xbox or Playstation actually have huge budgets. In 2014 Activision, a popular video game developer, announced that one of their Continue reading Video Games: Just a Plastic Disk→

Facebook’s New Reactions

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In the past few weeks, you might have noticed that Facebook rolled out new ways for you to react to your friends’ posts. You’re no longer limited to just “liking.” Now, among other things, you can express laughter, “wow,” sadness, and anger. Fom the user’s perspective, is almost definitely a good thing. Deciding whether it’s polite to like a post about your friend’s dead pet fish was always tricky. You might think that providing a more nuanced way to react to your friends’ lives explains why Facebook implemented this feature, but that’s not the whole story. Providing a satisfying user experience isn’t their only Continue reading Facebook’s New Reactions→

Introduction to Econ Book Club: The Why Axis

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  Sound Economics has begun its first ever book club where we have chosen to read The Why Axis; Hidden Motives and the Undiscovered Economics of Everyday Life, by Uri Gneezy and John A. List, who are two of Forbes magazine’s “worlds most powerful economists”. The aim of their book is to provide the breakthrough ideas to challenge the assumptions of human decision-making. Gneezy added that the book provides “new understanding of the hidden motives that drive people to behave the way they do and of how we can achieve better outcomes for ourselves, our companies, our customers, and society Continue reading Introduction to Econ Book Club: The Why Axis→

The European Pension Problem and what the U.S. should Learn from It

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[This post was written for Sound Economics by Geremia Lizier-Zmudzinski] The 20th century saw a rise in global prosperity as medical and economic advancements contributed to vast improvements in the life of the average person. However, they haven’t come without unintended consequences – one of which is now very obvious in Europe. Thanks to rapid progress in medicine and health care, life expectancy across European countries has risen from 69 to 80 since the 1960’s. Meanwhile, as industrialization, global trade, and technological improvements, to name just a few factors, have improved the quality of everyday life, people are less inclined Continue reading The European Pension Problem and what the U.S. should Learn from It→

North Korea the Closed Economy (?)

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The CIA world fact book reports that North Korea’s GDP in 2011, 2012, and 2013 was at $40 billion each of those years. The GDP composition is broken down in agriculture (22% of GDP), industry (47%), and services (31%) (2015 est), and only 5.9% of GDP provided by exports. However, the service sector, in which North Korea’s economy gains a third of it’s gross domestic product, largely consists of a tourist industry (ethical implication?). CNN can provide you even more information on How North Korea Makes Money. “This is a time machine. This is 1930’s Russia or this is 1950’s Continue reading North Korea the Closed Economy (?)→