The Fed Can Fix It

Despite the name, I don’t just want to talk about the marvels of the Fed, but actually about how the Fed is a good model for other public agencies and corporations. The Federal Reserve has always been the target of criticism from all sides of the spectrum, but this is reflective of inherent strengths of the Fed that naturally can draw some ire from the Political space. The Federal Reserve has successfully led the country through over 70 years of economic hardships in way that no other governmental body truly could and this is due to its unique features that set Continue reading The Fed Can Fix It

Liberty in the Name of Liberty: Forced to Bake a Cake, Eating It, and Having It Too

In 2012, two men approached Masterpiece Cakeshop to bake a cake for their same-sex wedding. Jack Phillips, owner of Masterpiece Cakeshop, refused to bake this particular cake for religious reasons. The couple went on to file a formal complaint with the Colorado Civil Rights Commission for sexual orientation discrimination. The initial ruling stated that Philips did not have a first amendment right to deny the gay couple’s request for a cake. The commission also “ordered Jack and his staff to either violate Jack’s faith by designing custom wedding cakes that celebrate same-sex marriages or stop designing all wedding cakes, which was Continue reading Liberty in the Name of Liberty: Forced to Bake a Cake, Eating It, and Having It Too

Why Running is Becoming (more) Boring; Breakdown Game Theory Style

If you have ever been to a cross country race, or a track meet, you know endurance running is boring.  Runners can be going very slow and it’s hard to know how impressive it is, especially the races that take 20+ minutes. Recently championship races are getting harder and harder to watch, races that had audiences that spanned outside the running community.  Specifically, I’m talking about races such as the olympics, D1 nationals or the IAAF championship. The short answer: the races have been getting slower. The confusing part is that the runners are not getting slower, just these races.  The Continue reading Why Running is Becoming (more) Boring; Breakdown Game Theory Style

The Denomination Effect

To a rational decision-maker, the possession of $20 translates exactly to the ability to buy $20 worth of goods. The form of the $20 should not matter—whether it is one $20 bill, two $10s, four $5s, twenty $1s, or any configuration of change, the purchasing power is the same. However, humans are rarely perfectly rational, and this case is no exception. In the event that a person is given $20, that person is more likely to spend it if it is given in smaller denominations (for example, $1 bills or change) than if it is given in larger denominations (especially Continue reading The Denomination Effect

Post-Purchase Rationalization

Imagine this: A customer walk into a store looking for a new coat. In this store, she has two coats from which to choose. They have a few differences: they are each a different color, say green and blue; the blue one is made from thinner material; the green one has a larger, more obnoxious logo; the blue one has smaller pockets; the green one is a bit more expensive. Eventually, the customer decides she just has to pick one, so she does. Imagine she chooses the green one. Later, she wonders if she made the right choice, if she Continue reading Post-Purchase Rationalization

Everyday Economics: Not Just Supply and Demand

As an economics student, few things make me happier than applying economics outside of the classroom. While I admittedly over do it (sorry Sara, Doug, and Jenna) I still love finding examples in everyday life. My favorite definition of economics is, “Economics is the social science concerned with how individuals, institutions, and society make choices under conditions of scarcity.” This is definitely different than most people’s idea of economics, which tends to be something like, “the branch of knowledge concerned with the production, consumption, and transfer of wealth.” In this article, I’m planning to briefly summarize many of the ideas I have had Continue reading Everyday Economics: Not Just Supply and Demand

Life on the Margin: How to Make Optimal Decisions and Maximize Utility

Anyone who has taken an introductory Economics course has probably heard that optimal decisions are made at the margin. This is a foundational concept in Economics, but it can be confusing for those who are unfamiliar with Economics jargon. What is the margin? How do you know if a decision is optimal? Here is an example to illustrate the concept: Consumer A has some free time and wants to figure out how to spend it. A new episode of a television show she likes has just become available to stream. It would take an hour of her time to watch Continue reading Life on the Margin: How to Make Optimal Decisions and Maximize Utility

The Irrationality of Free

One of the books I’ve been reading for Economics of Happiness, the best connections class to make you happy (maybe except for the wine-tasting one) is Predictably Irrational by Dan Ariely, who examines some of the incentives and day-to-day interactions we have, how they affect our decisions, and more specifically, how they nudge us towards irrational decisions. One idea that we can’t deal with very well is the idea of free, or costing zero. If something is free, or costs zero, our decision making about that thing changes considerably. Predictably Irrational discusses how when presented with an otherwise great deal Continue reading The Irrationality of Free

SUB(stituting)?

If you’ve spent any time at UPS, you’ve probably thought at some point, “Is there actually going to be anything good at the SUB today, or should I go off-campus?” While the connection between economics and going to the SUB may not be clear, just remember that economics is the study of how people make choices. I’m currently taking an Economics of Online Dating class (Econ 341), which has a large focus in economic model building. A couple weeks ago, we were asked to create a model of decision-making under risk. Risk is defined as a situation in which all possible outcomes and Continue reading SUB(stituting)?

The Price is Wrong

This may not be the easiest pill to swallow, but worldwide, energy prices are far too low. In the United States, on average, the federal U.S. tax on gasoline has remained at merely 18 cents per gallon since 1993. We all know that there are negative effects that come with the overconsumption of nonrenewable energy, but is it reflected in the prices? When gas, or any other fossil fuel, is bought at market price, the cost fails to account for the environmental and social impacts that come with the production and consumption of these fuels. This issue is called a Continue reading The Price is Wrong