Cheyenne gives Dina a gift to thank her for being a bridesmaid, but Dina thinks it’s just cheap jewelry that one of her birds might eat. She asks Cheyenne to return the gift and to just give her cash instead. The inefficiency of gift giving occurs when purchases of gifts spend more money on an item for someone than that person would be willing to spend if they had purchased the item themselves.
Jonah and Amy discuss whether or not it’s a good idea for Jonah to date one of his boss’s foster children. Amy tells him it is not a good idea to date the boss’s daughter, but Jonah feels that he and Glenn’s daughter have a connection. Because Jonah just met her, he’s not really sure if they would be a good match and his hope is that Amy can provide more information to help him make a better informed decision.
Store brand beef products are being marked down 80% and Garret suggests that customers should consider why a store would do something like that. He’s suggesting something may be wrong with the product, and perhaps the store knows more about the quality of the meat than the customers do.
Dina tries to impress her coworkers by giving them gifts, but she breaks into their lockers to give them their gifts. Some of the gifts are mildly offensive, but she thinks they are appropriate. The deadweight loss typically associated with gift giving is that people who give the gifts spend more money on the items than the recipient is likely to spend for the same item.
Dina has had a crush on Jonah for a while, but Jonah was always able to avoid the situation because he said he wasn’t comfortable dating a supervisor. He shares this news with his friend, shortly before the store manager announces that Dina has decided to step down as assistant manager so that she can focus on personal matters. Either-or decisions of this matter require people to weigh the costs and benefits of actions. Some of the costs for Dina include not being able to criticize Glenn, a reduction of her authority, and likely a pay reduction. She must believe that the benefits of dating Jonah outweigh those costs.
Bo and Cheyenne are shopping for wedding supplies in the store. Bo really wants to buy some laptops so they can smash them during the wedding as a form of entertainment. Amy is shocked because she knows how expensive it is to raise a child and believes that the couple should be saving the money instead of spending it on one day. Amy tricks Bo into playing a game with a price gun so that Bo and Cheyenne can see how expensive a child can be. People struggle to recognize the opportunity costs in their decisions, but Amy has made the cost more salient.
Glenn and Dina have differing opinions about what should be included in the pizza party they are planning for the winning team. Glenn stresses that the budget is only $60, but Dina really wants a piñata. Glenn, on the other hand, really wants a clown at the party, but Dina doesn’t believe that’s necessary. This scene is a good introduction to the concept of budget constraints, optimization, and tradeoffs. Since Glenn and Dina have different utility functions, their willingness to purchase different items isn’t compatible.
Jonah bought a sex doll that he believed looked like Amy. He planned to dress the doll up and tease Amy throughout the day, but he realized that it got out of hand. He approaches Amy in the parking lot to apologize and show her a receipt as proof that he returned the doll. He ended up paying a very large restocking fee, more than the doll was worth, because there isn’t much of a market for used sex dolls.
Jonah actually summarizes a bit of Akerlof’s Market for Lemons paper in that he knows more about the quality of the doll (that it hasn’t been used at all) than the person who may purchase it. The collapse of the used market exists here because Jonah ends up paying money to not have the doll anymore.
A customer is having trouble identifying a new toothbrush to help with his tartar problem. With all the options available, some companies advertise as being good at fighting plaque while others focus on tartar prevention. When consumers have a lot of options, it’s sometimes hard to fully consider the tradeoffs. This paradox of choice can explain why some people don’t behave rationally when presented with a seemingly overwhelming number of options.
After being assigned to wrap gifts for customers, we learn that Garrett doesn’t actually no how to this. He tries to hide this by making an economic argument that wrapping gifts is inefficient since it just wastes time in the transaction process.
Teaching with Superstore