Jonah convinces Adam (Amy’s husband) to buy a new grill even though the couple doesn’t really need it. Earlier in the episode, Amy convinced Jonah to start selling stuff to people even if they don’t need it so they can win the store’s Color Wars. Adam and Amy don’t really have the savings to afford such a lavish purchase, but Jonah emphasizes how great the grill would be for Adam’s YouTube channel.
Each year the store participates in a competition that divides the employees between two teams to see which team can sell the most during the day. Glenn announces that the winning team will receive a pizza party. While the employees aren’t overly happy about either the competition or the pizza party, incentives can usually be a way to induce higher levels of productivity. It turns out that each team member on the winning team also receives $100, but Glenn was saving it as a surprise incentive. Amy has to explain to Glenn that incentives need to be announced at the beginning in order for them to actually work.
Adam has a YouTube channel where he shows people how to cook, but how does he differentiate himself from all of the other YouTube shows out there? His episodes are done in real time, which means that while his ribs are cooking for 2 hours, he just stands there and waits. He hates when shows just cut to the end and the meat is fully cooked. Jonah and Adam both remark that they never see that online, which implies that’s probably not really a feature people want.
Jonah has convinced Adam to buy a new grill and a new TV, but he didn’t know that Adam was married to Amy. Part of the reason he convinced Adam to purchase these items was so that his team could win the Color Wars and Amy could get a $100 bonus. While Amy and Adam are fighting, we learn that Adam is a serial entrepreneur and Amy invests in her human capital.
This scene is a good example of the tradeoffs associated with investing in human capital and physical capital. Adam wants to invest the money to support his business ideas, but Amy believes that investing in her college classes is better because it can lead to more money later.
Garret is in the process of convincing a customer to purchase a more expensive bike, the Vilano Forza, but the customer wants the cheaper RX-5 bike. Price isn’t the only determinant of a consumer’s utility function and Garret tries to convince the customer that the other features of the bike are worth the price. To end the scene, Garret also tries to get the customer to buy a bicycle helmet, which is a good example of a complementary good.
Adam and Jonah are watching Adam’s YouTube channel on one of the TVs in the store, but Jonah will use this as an opportunity to try and sell Adam a new TV. In order to win the Color Wars, employees are trying to sell expensive items to increase their team’s total. Jonah doesn’t know that Adam is married to Amy and begins to insult her in an attempt to get Adam to purchase the TV. Adam makes some key comments that connect with the economics of the household, namely that his and Amy’s happiness is linked. He’s careful to consider Amy’s happiness before making purchases, because their utility functions are interdependent.
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.
A man died on an expensive couch in the store, but both Cheyenne and Mateo want the couch. It’s not clear who deserves the couch, so they determine the best way to allocate the couch should be based on who sits on the couch the longest. Rather than having them pay for the couch in an auction, they will pay for the couch with their time.
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.
Amy asks Garett to finish the shift assignments, but he’d rather finish eating his lunch. Mateo jumps at the opportunity to make shift assignments and provide retribution for wrongs that have been done.
Teaching with Superstore