Dec 15, 2011
Thinking Beyond Stage 1

Winners & Losers

One of the most distortionary things in politics is to frame issues in terms of who wins and who loses. Almost any major policy debate you can think of invokes images of people who lose and people who win. It’s natural to see why framing things in these terms is so appealing:

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Jan 1, 2011
Efficiency, Time Economics

Taking Advantage of Resource Contention Inconstancy

Most members of society mostly lives their lives in-sync. Everyone wakes up and drives to work between 6 and 9AM. Everyone works from 9AM to 5PM, then at 5PM they drive home. After 5PM many people go out and eat dinner or enjoy entertainment. Many people use the weekends to go shopping.

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Dec 29, 2008
Efficiency, Retail, Pricing Theory, Behavioral Economics

Additional Fees

I always love (hate) it when companies give a price that’s virtually meaningless to the consumer (or at least it should be). Some products and services have this concept of a “price” then “additional fees” that serves no purpose other than to confuse the consumer and make it more difficult to gather price information.

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Jun 28, 2008
Efficiency, Retail, Pricing Theory

Price Importance in the Book Market: Why buy books at Borders?

Given the vast discounts you can get by buying books on, why do people buy books at bookstores anymore? It doesn’t quite make sense to me. Obvious advantages of brick-and-mortar book stores are the environment, friendly service, and the ability to see books before buy. Obvious advantage of is the ability to buy a book in 5 minutes from the comfort of your own home.

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Jun 26, 2008
Efficiency, Energy

How to lower gas prices: Calm down, and learn some economics.

The current state of record gas prices has lead to a barrage of uninformed discussion and downright silly claims that is absolutely maddening. Why more economists don’t step in to correct the record and straighten out the nonsense (mostly in the name of maintaining “neutrality”) is also frustrating. Last time I checked neutrality has nothing to do with differentiating nonsense from fact.

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Mar 11, 2008
Education, Efficiency, Pricing Theory

Why you pay so much for college textbooks

So for RIT students it’s that time of year again - college textbook purchasing time. Every quarter the price of textbooks rise considerably and students always find themselves buying new copies of books. Some of the prices seem outrageous and totally unjustified - two books I recently bought for accounting and finance were $180 each. Now on face value this price may or may not be “reasonable” from a cost perspective. It very well could be that the vast amount of research and work needed to produce a given book “justifies” such a high price, particularly since by its very nature book production involves very high fixed costs and low variable costs - and there’s not that many students to divide the fixed costs over. But this raises another question as to whether the textual opulence of modern textbooks is really necessary. I’m sure there are several studies out there analyzing the textbook market with much more sophisticated analysis than what I present here. Here are my thoughts from pure intuition:

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Mar 5, 2008
Food, Behavioral Economics

Would you like a large?

Ever notice that at the barnes & noble cafe when you leave your size ambiguous they never ask “what size would you like?”  Instead they say, “would you like a large?” Presumably they do so with the expectation that people are more likely to respond in the affirmative to a question like “would you like a large?” than actually give “large” as their answer if asked what size they would like.  There is significant evidence that how a question is asked has an extremely large impact on the statistical results of that question.  What’s more is that a large is actually a venti, not a grande as most people would expect (considering grande is what actually means large in Italian…)  This is an excellent and intelligent way for Barnes & Noble to capture more consumer surplus - I always smile when I hear this question being asked and the customer unsurely replying “uh.. yeah”.

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Jan 13, 2008

Retailing: Why does XL abound but M and L always sell out?

Most of us have experienced buying clothes but never being able to find the size we want. Particularly during clearance times, it seems that there are always excess articles in XL and XXL sizes but rarely any left in M and L. Economic reasoning tell me that this should not be so – it represents a relative misallocation of resources that could be more optimally arranged.

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Jan 8, 2008

Wal-Mart Respects My Time

I’ve noticed this holiday season that Wal-Mart is taking a different approach towards attracting customers: respecting their time. Around black friday back in November, Wal-Mart was promising more open cash registers for shorter lines and quicker checkouts. Near Christmas I heard commercials advertising “gift card only” check-out lines, enticing people to purchase gift cards without all the hassle typically associated with checking out at Wal-Mart during busy times.

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Jan 5, 2008
Efficiency, Thinking Beyond Stage 1

New Sowell Book: Economic Facts and Fallacies

As some of you know, I am a huge fan of the venerable economist Thomas Sowell and his writings. Thomas Sowell has a gift for eloquently preaching economic fact and collapsing faulty arguments like a house of cards.

I was pleased to discover this weekend that Dr. Sowell has a new book out called “Economic Facts and Fallacies” which continues in his long writing tradition of presenting economic and social arguments which challenge widely-held beliefs to average citizens. While I find the greatests of his intellectual works “The Vision of the Annointed”, the most knowledge-packed book for everyday people regarding economic issues is by far “Basic Economics”, which recently was updated to a new edition.

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Dec 20, 2007
Legal, Traffic

The High Cost of: Road Work

This will be the first in a series of articles which I preface with “The High Cost of” and the line of discussion is meant to stimulate thinking about the true costs of various things in real life. One of the most interesting concentrations in economics is cost-benefit analysis – not necessarily the formal methods of applying it, but the more abstract way of deciding which costs and benefits should be quantified.

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Dec 15, 2007

The Kickoff

Welcome to my new blog! To kick this off, I’ll start with an introduction and an overview of my philosophy:

My name is Ben Hughes and I’m currently a senior at Rochester Institute of Technology, finishing up a double major in Information Technology and Economics. I’m a Ruby on Rails web developer, jazz musician, tennis player, and amateur economist interested in policy issues. I am philosophically libertarian and believe that the free market works better than most non-economists assume. Capitalism, or the free market, often deserves more “respect” than most people grant it, hence the name of this blog.

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