Like Freakonomics, The Armchair Economist applies the investigative techniques of economics to answer everyday questions. I think a quoted passage may reveal why I find such books delightful.

Last night my wife and I could not decide which movie to see. She leaned toward Cries and Whispers and I to Sorority Babes in the Slimeball Bowl-o-rama [Luke’s note: yes, this actually exists]. We agreed that the person with the stronger preference – expressed in dollar terms – should prevail. The problem was to determine whose preference was stronger. The problem was compounded because we were both perfectly willing to lie to get our way.

Here is what we did. We each wrote our bid on a piece of paper. The high bidder got to choose the movie but was required to make a charitable contribution equal to the loser’s bid.

It was worth exactly $8 to me to get my way. Because winning meant paying the amount of my wife’s bid, I hoped that I would win if my wife bid less than $8 and that I would lose if she bid more. I was able to insure this outcome by bidding exactly $8. In other words, my own purely selfish motives led me to make an honest revelation. My wife did the same, and the person with the stronger preference won…

An economist is somebody who thinks it is worth wondering why everyone doesn’t choose movies in exactly this way.

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