Thursday, December 23, 2010

Seinfeld Economics

Although my field is Number theory, I enjoy Game theory.

The Chinese Restaurant (Lying to Uncle)

Jerry lies to his uncle and says he can't go to dinner with him.
“Did I do a bad thing by lying to my uncle and saying I couldn't go to dinner?

Opportunity cost

Movie Script

The Chicken Roaster

Cost-benefit analysis, Externality

A Kenny Rogers Roaster restaurant opens across the street from Kramer. He can't stand the red glare from Kenny's neon sign, and moves into Jerry's apartment. But he becomes hooked on Kenny's chicken, and eventually accepts the red glare in exchange for access to the chicken. When Kenny's shuts down, the lights go out, and Kramer's overall welfare falls—the benefits of the chicken outweighed the cost of the glare.

Here’s a thought experiment: You go to the local pizzeria, order yourself a calzone to go and then leave $1 in the tip jar before you leave. Except something goes horribly wrong: The employee who helped you doesn’t notice that you’ve left him a tip. Should you A) Just be happy knowing that you’ve done a good deed, or B) Tell the employee so he knows you’ve done a good deed?

Most normal people would probably shrug it off and choose the first option, and a select few might choose the latter. But if you’re George Costanza from the popular show Seinfeld, you would actually choose a third option: Stick your hand into the tip jar and try to take out the dollar so you can put it in again while the employee is looking. And in the process you would prove a valuable point: Altruism isn’t really altruism if you’re getting credit for it.

Here are more examples :

Two economics professors who recently launched this website that analyzes dozens of Seinfeld episodes for the money lessons that viewers can learn.

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