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Consumer Choice & Behavioral Market Structures

Paid Donations

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.

Categories
Consumer Choice & Behavioral

Donation Competition

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.

Categories
crime Game Theory

Separating the Criminals

Part of Dina’s role as head of security involves running the shoplifter rehabilitation program. People who have been caught shoplifting can complete the course to avoid having their crimes reported to the police. Dina tricks them into ripping up their workbooks to determine which of the group is actually interested in the rehabilitation process. This trick is done to separate the group into two smaller groups so she can focus on the ones who are likely to not steal again. This is Bo’s third time falling for the trick.

Categories
Consumer Choice & Behavioral Supply & Demand

Non-Toxic Pillows

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.

Categories
Game Theory Labor

Incentivizing Steps

Glenn and Dina hand out step trackers in the break room and announce a corporate competition to see which store has the most steps at the end of the week. The incentive to motivate the employees? Lunch with a regional vice president. The employees doesn’t seem all that motivated until later in the episode when the stores begin to communicate through a leaderboard and messaging system, or so it seems! Amy and Jonah enter fake messages from the Bel-Ridge store in an attempt to motivate their branch.

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Health Inequality

Healthcare Inequality

Dina and Amy head to the hospital to deliver their children, but it turns out that Amy’s insurance isn’t accepted at the hospital they’ve shown up to, but Dina’s health insurance is accepted. Both work at Cloud 9, but managerial health insurance provides more benefits than other employees. This differencing of employee benefits contributes to inequality between white- and blue-collar workers.

Categories
Market Structures

The Extra Smailes

Cloud 9 is instituting a new policy in an effort to compete against online retailers. Associates now are asked to make small talk with the customers and “go the extra smailes.” Since Cloud 9 sells the same products as online retailers, the store is trying to provide a non-price advantage to convince customers to shop locally.

Categories
Supply & Demand

Rationing During a Blizzard

A blizzard hits the St. Louis area and customers are lined up to purchase items they now need. Garrett announces that the store has decided to ration all types of water rather than raise prices in an attempt to prevent people from hoarding water. Another alternative allocation mechanism would be to raise prices, but they have opted instead for an authoritarian approach. As Garrett names the different products under rationing, we also get a list of substitute products which shows the range of product differentiation at the store.

Categories
Supply & Demand

Uber Surge Pricing

A large blizzard has hit the area and the employees have finally decided to go home. While outside, some of the employees appear stuck because public transportation may not be working. Garrett suggests a few of them share an Uber, but because of the increased demand for transportation, the ride is surging to $1,400. The employees decide to head back inside.

Categories
Consumer Choice & Behavioral

Stated vs. Revealed Preferences

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).