Friday, October 07, 2005

Maybe I could win an Ig Nobel Prize?

On the subject of the Nobel Prize, last night they also gave out the annual "Ig Nobel" Prizes for research that is unusual/humorous. As they say, research that "cannot or should not be reproduced."

The award this year in Economics was awarded to Gauri Nanda (a master's student at MIT) who:

"invented Clocky, an alarm clock that scurries around the room as it rings, forcing the person it awakens to get out of bed and chase it."
Click here to see the rest of the awards for this year and past years. My personal favorite is an actual published paper entitled: "Pressures Produced When Penguins Pooh -- Calculations on Avian Defaecation." Talk about a bad laboratory job for some grad student...

Addendum: Here is the website for "Clocky." You can even buy a boring t-shirt.

(Source: Division of Labour)

Nobel Prize Possibilities

The 2005 Nobel Prize in Economics is scheduled to be announced on Monday.

The top candidate whose work I am most familiar with is Oliver Williamson in contract/transaction cost theory.

Here is a link to an actual betting market that they had for the 2004 Nobel Prize in Economics (it has not been updated for 2005). You could buy shares in an economist and then you win a share of the proceeds if that economist wins the Nobel prize (it did actually predict the winner last year).

Sadly, my teaching of high school economics and "groundbreaking" work in the area of paper footballs and paper airplanes is once again likely to be overlooked by the Nobel committee...

Automatic bonus points for any of my students that can look up and give a quick summary of Williamson's contribution to the field of economics (in your own words, not copied directly from somewhere of course).

Thursday, October 06, 2005

Stocks Recommended in Spam Emails

If you needed more reason to ignore spam email, here it is: Spam Stock Tracker

The author of this site tracked the performance of any stocks that he was offered in a spam email for a few months. His results were unsurprisingly horrible. In his words,

"almost ALL of those stocks I added went up a few cents max, then dropped like flies the next day."
What do those results tell you about why someone might send a spam email advertising stock that they own? How might those spammers make money off the stock if they only increase a few cents the first day and then drop sharply?

(Source: Marginal Revolution)

Wednesday, October 05, 2005

Economics of Gift-Giving

One puzzle that seems to contradict the economic way of thinking is the fact that people give gifts at holidays or on birthdays instead of money. One would expect that people would always rather receive money for two reasons:

1.) Almost all gifts are not exactly what the person wanted, and the receiver could buy something they like better for the same amount of money.
2.) Even if the "perfect" gift was given, the receiver could still have bought that same gift if just given the money.

Therefore, in most cases, money gives the receiver more utility, and at worst, it gives the same utility as a gift.

Question to think about:
Why do people give gifts instead of the equivalent amount of money?

Post a comment through the link below to weigh in on this question.

Welcome to the New Walker Economics Blog

I plan on using this blog to post interesting articles on current news events and some of my own comments to go along with it.

Most of the articles I post will have some relevence to basic economics, and I will occasionally ask a question that I want to generate discussion about in the comments section.

This blog will start as just a blog for my AP Economics class, but I eventually plan on expanding the audience to more people within the Walker community.