why popcorn costs so much at the movies
he titular "pricing puzzle" here is the least convincing - the author confirms that cinemas are simply greedy and charge the maximum the market will bear. On the other hand, he devotes a fascinating chapter to demonstrating why subsidised staff housing at his university is counter-productive, and also writes persuasively about shop sales, manufacturers' rebates, and why so many prices end in. 99 - demonstrating with aplomb that the last is not quite as simple as we thought. Lest this all sound a bit Freakonomics-ish, McKenzie points out mildly that he was doing this stuff already back in 1975, and it is good to see him giving some of the modern gang an elegant kicking - as when he demolishes Steven Landsburg's idiotic idea that the problem of queues would go away if everyone switched to a last-come-first-served system.
McKenzie's own book is likely to attract most controversy for its final chapter, which argues that some part (don't ask how much) of the persistent pay gap between men and women is attributable to evolutionary biology, since women value wealth in prospective partners more than men do. This, supposedly, creates more earnings competition among men and so drives their wages up. Interesting if true, but how to verify it?
- How Prices Matter rices are ubiquitous, so much so that their importance to the smooth operation of a market economy (even one constrained by extensive polit- P ical controls as is the case in China) can go unnoticed and unheralded.
Prices are what - How Prices Matter rices are ubiquitous, so much so that their importance to the smooth operation of a market economy (even one constrained by extensive polit- P ical controls as is the case in China) can go unnoticed and unheralded. Prices are what all trades, whether at the local mall or across the globe, are built around. Tey facilitate trades among buyers and sellers who don't know each other, meaning they make less costly, or more socially benefcial, the allocation and redistribution of the planet's scarce resources. Indeed, as the late Friedrich Hayek is renowned for having observed, prices summarize a vast amount of - formation on the relative scarcity and, hence, the relative cost of resources (with much of the information subjective in nature) that can be known only by ind-i viduals scattered across markets and cannot be collected in centralized loc- tions, except through market-determined prices. 1 Because they summarize, and largely hide from view of buyers, so much i- formation spread among people throughout the world, prices can be puzzling.
Why prices are what they are, and change for reasons that are obscured by a multitude of economic events that can extend backward in time and forward into the future, can be mysterious. Explaining many puzzling prices can be - tective work that the modern-day Sherlock Holmes would surely fnd challenging.
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