Tag: signaling

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
Supply & Demand

Discount Sushi

Sushi is on sale, but people should question whether it’s worth the risk? If companies have too many products, it may indicate that the price was set too high. When a surplus exists, firms reduce the price so that the market clears. Unfortunately, the quality may not be as high as it was the day before.

Categories
Market Structures Supply & Demand

Gluten Free Water

In this brief transition, a customer selects a bottle of gluten free water from an endcap display. Advertising is often used to differentiate products from competitors, even when no apparent difference exists. Water doesn’t contain gluten, but people may be willing to spend more if they believe it does and care enough to avoid it.

Categories
Labor Unemployment

Last Chance Employees

Jonah is happy that he won the betting pool over which temporary employee would quit first, but it turns out that a lot of these temporary employees are part of a program at Glenn’s church that works with people who have trouble getting jobs. Many of the employees have criminal records or are former drug addicts, and that makes them less likely to be hired without assistance.

Categories
Labor

College as an Adult

The employees are locked in the store after hours while hanging up signs, but Amy laments that she has more important things to do: she has a midterm to study for. Trying to be relatable, Jonah reminisces about his time in college: getting drunk and having philosophical debates. It begs the question of how much human capital accumulation actually occurs and provides some support for the signaling model. Amy is treating college like an investment, so she resents Jonah’s downplaying of its importance.