A dueling charity outside the store has led Amy to offer a $5 gift card when people donate a toy to the toy drive inside the store. The two charities are substitutes for one another and offer similar goals. Some people donate to charity to feel good about their actions, but others are willing to donate if they are incentivized to do so. The Samaritan decides to buy a jar of army men to get a gift card for each one.
Amy and Jonah are trying to help Mateo with a toy drive inside the store, but there’s a charity event happening outside the store. Amy asks the man to leave since he’s serving as a substitute for Mateo’s charity. A crowd gathers and accuses Cloud 9 of selling products for more than the cost and keeping the profit, i.e. being a profit-maximizing firm. Amy points out that all stores sell things for more than they cost and earn profit.
There’s a sale on non-toxic, organic pillows and Garret adds that customers should be weary of what that means the other pillows contain. By providing such labels on certain products, it means customers are likely to assume the alternative products contain harmful ingredients. This asymmetric information, where the store knows more about the products than the customers do, can lead to inefficiencies in the market.
Jonah has resigned as the store’s Green Ambassador, but he isn’t happy with how the other employees are handling their new responsibilities. He feels as though they aren’t really taking the job seriously. He notes an important issue in economics around people who say they are willing to do something (stated preferences) and how they actually behave (revealed preferences).
Jonah sets up a baby registry to help Amy afford some of the things she’ll need for her newborn. Her coworkers are mad they weren’t invited to the fake baby shower, so the store throws Amy (and others) a baby shower. After getting through the gift portion, Amy thanks everyone for the gifts, but notes that some of the gifts she received were garbage. Only the car seat was a gift that she actually wanted and was the purpose of setting up the baby registry. Gift giving is often considered inefficient because people don’t fully know what the other person’s willingness to pay is for an item. Had Amy been given cash, she could have purchased items that she valued.
Amy is single again and is talking about the new things she wants to do with her free time. She’s bought some plants and wants to start doing puzzle games, but her coworkers don’t seem all that excited for her. Tastes and preferences are an important factor in analyzing markets.
Search theory describes how mutually beneficial transactions are achieved when there are a variety of heterogeneous options available. Throughout this particular episode, Amy deals with people trying to help her find a partner, but she’s not well informed of their quality. Matching markets often involve some form of imperfect information that participants must face when trying to decide to transact.
Jerusha and Glenn are over for a party that Amy is hosting and Jerusha takes the time to console Amy on her recent divorce. Jerusha actually points out the sunk cost fallacy and praises Amy for her divorce since it’s better than staying in a marriage that doesn’t make you happy. A classic sunk cost fallacy example is often relationships where one party is unwilling to break up the relationship because of the amount of time they have spent together.
In the previous season, a massive tornado destroyed Cloud 9. Earlier in the episode, the employees held a memorial for a coworker (Brett) who they believed passed away during the tornado. Dina, normally the most confident worker, is a bit freaked out by a rainstorm outside and suggests that they head to the storm shelter. Her risk tolerance seems to have shifted to becoming rather risk averse following the tornado strike. Preferences for risk can change and be context dependent. In this case, a traumatic event a few months earlier has made a large impact on Dina’s tolerance for risk.
Glenn has been asked to fire 6 people before the end of the day, but he’s having trouble deciding which workers will be terminated. Amy decides to help him by having Glenn rank employees to narrow down the list. While evaluating employees, Glenn notes that Sarah is preferred to Elias. He’s trying to convert his subjective preferences into a ranking system.