Tuesday, March 6, 2012


Movie goers in Livonia, MI grumble about expensive snacks. In economics, this very example is a classic intermediate micro problem (see Alchian and Allen's textbook for probably the best treatment you could hope for). In practice, regular folks see eight bucks for a box of Goobers and think it's a rip-off.

Buying snacks at the theater: predict what would happen to ticket prices (and theater attendance) if theaters were forced to sell candy and popcorn at the same price as at the local Wegman's.

Bonus points: what's the BATNA for not enjoying the refreshing flavor of Milk Duds?

(EDITOR'S NOTE: MR has a piece on this, a while back. Comments are interesting. A lot of people just don't understand economics. And, apparently, Sam is always fussing about stuff like this.)

No comments:

Post a Comment

Do you have suggestions on where we could find more examples of this phenomenon?