Sunday, November 25, 2007

Articles by the Undercover Economist

Some interesting "everyday economics" articles and blog entries by
the author of "The Undercover Economist", Tim Harford.

1. "Starbucks Economics"
"Here's a little secret that Starbucks doesn't want you to know: They
 will serve you a better, stronger cappuccino if you want one, and they
 will charge you less for it. Ask for it in any Starbucks and the
 barista will comply without batting an eye. The puzzle is to work out

2. "Beauty and the Geek"
"Economists have found evidence that voters prefer a pretty face in the
 United Kingdom, Australia, Finland, Germany, and the United States."

3. "Desperate for a Wii"
"The economists' question, of course, is why on earth Nintendo doesn't
 raise the price until supply equals demand?"

  "The Great Xbox Shortage of 2005"
"Why you can't buy the one present you really need."

  "Xbox Economics, Part 2"
"More reasons Microsoft isn't charging enough for the season's hot
 game console."

4. "The Renter's Manifesto"
"Wherever people seem particularly keen to own their own homes - as in
 the United Kingdom, Spain, and some U.S. states - employment suffers
 as a result... Renting your home and staying flexible do wonders for
 your chances of always finding an interesting job to do."

5. "Why the Stock Market Rises in January - and why it shouldn't"
"The January effect is a challenge to the efficient markets hypothesis.
 A reasonably bold version of that hypothesis is that you can't beat the
 market without inside information. All publicly available information -
 including corporate accounts, price history, and what month of the year
 it is - is already taken into account in the market price. A rule that
 says 'buy on Dec. 31 and sell on Jan. 31' just shouldn't yield
 spectacular returns. Yet it has."

6. "The Conjurer's Dilemma - how magicians protect their tricks"
"Intellectual property law does not protect magical tricks very well,
 and it does not help much in high fashion or in haute cuisine, either
 - all areas that Loshin describes as a 'negative space' for intellect-
 ual property ... For the fashion industry, a lack of intellectual
 property protection may not be a problem: The trickle-down of high-end
 fashion helps create obsolescence and the demand for more high-end
 fashion. But chefs and conjurers need a little help protecting their
 ideas. Lacking legal protection, they resort to professional norms."

7. "Match-fixing"
"[G]ambling should only be allowed on results that really matter. That
 might help, and although some players have been accused of match-fixing
 in a more dramatic way, such a rule would certainly reduce the

8. "Price fighters"
"[W]hy do central bankers aim to keep it above zero, rather than trying
 to eradicate it?"