Categories
Labor Principles

Surprise Incentives

Each year employees participate in Color Wars, where the employees are divided 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 Color Wars or the pizza party, incentives can usually be a way to induce higher levels of productivity. It turns out that each team member also receives $100, but Glenn was saving it as a surprise incentive. Amy has to explain to him that incentives need to be announced at the beginning in order for them to actually work.

Categories
Consumer Choice & Behavioral crime Principles

A Truck with No Radio

As Dina and Amy go searching for Bo, Amy notices that Dina doesn’t have a radio in her truck. It turns out that Dina special-ordered her truck without a radio (even though it costs more) because she believes it would make her truck less appealing to potential thieves. If criminals behave rationally (which Gary Becker argued that most do), a truck without a radio wouldn’t be worth the potential cost associated with car theft. Dina has removed the incentive to steal her truck.

Categories
Principles

A customer is checking out at the pharmacy, but asks Tate if he can ring up just a few more items. Even though is main job is a pharmacist, he obliges the customer. With a long line behind the customer, Tate recognizes that his Doctorate of Pharmacy is probably better spent helping his customers with medical needs rather than helping the customer avoid another line at the front of the store.

Categories
Health Principles

Allocating a Flu Shot

There’s a long line of customers hoping to get a flu shot, but there’s only one vaccine left. Jonah has been tasked with identifying which customer will get the last flu shot for the day. Jonah argues that it should go to the person who needs it most, which would be an argument based on equity. The next person in line believes that he should receive the shot, which could be an argument in favor of efficiency. Because of the low price, there appears to be a temporary shortage. Rationing and a lack of a market for price adjustments creates shortages and inefficient allocations. The store could raise the price of the last remaining few shot as an incentive to have others return tomorrow for the normal price.

Categories
Health Principles

Curing an Ear Infection

Mateo has come down with an ear infection and everyone in the store has a way of curing it. While some recommendations are more appropriate than others, each believes that their method will cause Mateo’s ear infection to be cured. The problem? They’re mixing up correlation with causation. Each of them believe their method will cause the ear infection to diminish, but they may only be experiencing a correlation.