Categories
Principles

Employee of the Month

Glenn approaches Mateo with a request to not award Mateo with employee of the month for a 6th straight month. Glenn recognizes that Kelly may want to transfer stores because she feels unappreciated. Glenn thinks that giving Kelly the award, she may feel better about her situation at the store. Pareto improvements mean no one is made worse off by an action, but Mateo points out that Glenn is taking something from him and giving it to Kelly. This redistribution is common with the use of taxes to redistribute income to others in a society. While not Pareto-improving, it can be used to improve equity.

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.