With alcohol regulation we decided to remember that it is the external cost that matters. Now one reason private costs might matter in terms of regulation is internalities. There is a discussion of this with regards to boozing here. This brings me to the idea of “addiction”. What is addiction, and why are we so …
Category Archive: Microeconomics
Permanent link to this article: http://www.tvhe.co.nz/2010/04/23/and-a-side-note-on-addiction/
Apr
15
2010
Another perplexing picture
The Freakonomics blog provides another perplexing picture (the last one was discussed here). This time we have a situation where it costs LESS to buy two of something then to buy just 1. So they are PAYING people to take the second unit. What gives? The way I see it, there are two likely explanations: …
Permanent link to this article: http://www.tvhe.co.nz/2010/04/15/another-perplexing-picture/
Feb
03
2010
Strategy spaces and monetary policy
Over at Worthwhile Canadian Initiative, Nick Rowe suggests that central banks should find something else to discuss instead of interest rates. The analogy provided is that of oligopoly competition: namely how the Cournot-Nash and Bertrand games have exceedingly different outcomes, even though the only superficial difference is that one game involves choosing output and the …
Permanent link to this article: http://www.tvhe.co.nz/2010/02/03/strategy-spaces-and-monetary-policy/
Jan
13
2010
Love is a prisoner’s dilemma
Well that is one of the interpretations from the Google autocomplete results for the search “how can I get my boyfriend/girlfriend to” (ht Offsetting Behaviour). Why? Well the third highest result when asking about boyfriends, and the fifth highest when asking about girlfriends is “how can I get my boy/girl to love me again”. The …
Permanent link to this article: http://www.tvhe.co.nz/2010/01/13/love-is-a-prisoners-dilemma/
Nov
06
2009
Taking unilateral action
When it comes to climate change the biggest argument against unilateral action is the lack of any tangible benefit. What can a single country really do to mitigate climate change? However, an article by Akira Yakita suggests that there are welfare benefits to action outside of the benefits to the climate. His central argument is …
Permanent link to this article: http://www.tvhe.co.nz/2009/11/06/taking-unilateral-action/
Nov
03
2009
Illegal downloading
The Herald reports that most music is bought by the very same people who illegally download a lot of tracks. It says plans … to crack down on illegal downloaders by threatening to cut their internet connections … could harm the music industry by punishing its core customers. Now that seems like a stretch. The …
Permanent link to this article: http://www.tvhe.co.nz/2009/11/03/illegal-downloading/
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