Hypothetical Bias

One Red Paper Clip

Bored by Pareto optimality? The Core?  The Shapley Value? 

Start trading with one red paper clip.  See http://oneredpaperclip.blogspot.com/

'tis but thy name that is my enemy?

on the outside of a credit card solicitation i received today:

NO CONFUSING INTEREST

Just $7 a month for every $1,000 of account balance

one definition of interest: 2a. a charge for borrowed money generally a percentage of the amount borrowed.

Great news from Argentina ...

... for econ profs!

After a government suggested boycott of beef, the Argentine President has implemented an export ban and price controls on food and other products (For Argentina's Sizzing Economy ...):

In an effort to hold the official inflation rate to 1 percent a month, Mr. Kirchner has sought to persuade producers and stores to agree to voluntary freezes on prices of hundreds of products, including sugar, flour, noodles, bread, shampoo and pencils. Because red meat accounts for more than for 4.5 percent of the consumer price index here, more than seven times its weight in the United States index, it has become the government's most visible and symbolic target.

Econ students, start your engines: Explain how each of these government policies will affect the market for beef.

Terrorism insurance

Twice in the past year, Muhammad Said has survived assassination attempts that left his car riddled with bullets. He works part time as a bodyguard for his father, a Baghdad city councilman, and helps a friend who has contracts with the American military. Both are very dangerous jobs.

So last month, Mr. Said, a slim, baby-faced 23-year-old, did what a small but growing number of Iraqis are doing: He walked into the offices of the Iraq Insurance Company and bought a terrorism insurance policy. It looked like an ordinary life insurance policy, but with a one-page rider adding coverage for "the following dangers: 1) explosions caused by weapons of war and car bombs; 2) assassinations; 3) terrorist attacks."

It cost him 125,000 dinars, about $90. Mr. Said paid more than most people because of his risky occupation. The payout, if he dies, is five million dinars, around $3,500, or about what an Iraqi policeman earns in a year.

Source: New Business Blooms ...

Macro vs Micro

"The Social Security system, the safeguards if you lose your credit cards — these are macroeconomics," she said. "But an allowance is an excellent teaching tool for microeconomics, for money management. When their money is on the line, it's a whole different thing."

Source: The Allowance ...