A Curious Little Blog

The examples I gave in the last entry were clear-cut:  I'm pretty sure that, from the point of view of maximizing your personal pleasure (which is what economics is about), you should not consider the cost to the vendor in your calculations (unless for some reason hurting the vendor was part of your calculations -- but in that case, you would almost certainly be better off not buying from him at all).  The examples in this entry still puzzle me; I'm not sure where the correct logic lies. The first is from The Armchair Economist by Steven Landsburg, which I thoroughly recommend to everyone.  I found myself agreeing with almost everything in it, but one case still leaves me puzzled.  Suppose you are going to a show of some sort and have bought 2 tickets at $50 apiece for you and your guest.  When you get to the show, you can't find the tickets.  Should you buy more, or should you be unwilling to buy them because you don't want to pay for the same thing twi...

The discipline of economics is founded on the idea that people are rational, at least to the extent that they will buy less of a good the more it costs.  But people are not always rational, of course (see, e.g., Dan Ariely's Predictably Irrational ). Some economists, such as Ariely, think our enduring irrationality is a blow against traditional economics.  I don't agree, but that is a topic for another entry.  What I'm interested in is some examples of apparently irrational purchasing behaviour that I have observed. For example, I once heard someone discussing what toppings to put on a pizza.  "If I'm going to pay for extra toppings, I like to get meat so it's worth the money," he said.  At first, that seems to make sense:  all toppings typically cost the same, but meat is obviously more expensive than, e.g., mushrooms or onions.  But if you think about it, you're not trying to get the most expensive toppings for your money; you're trying to ge...