The Behavioural Economics Of Surge Pricing

May 30, 2016 in Daily Bulletin

As Americans return from Memorial day barbequeus they’ll likely be wincing at Uber’s surge pricing. Keith Chen, head of economic research at Uber, spoke with NPR about some of the intriguing things he’s found in an analysis of Uber’s surge pricing data:

  • Passengers are more likely to agree to Uber’s surge pricing, if the amount of surge is 2.1, rather than 2.0.
  • The reason is because when it’s 2.1 passengers think that there’s a complicated algorithm deciding the amount of surge. When it’s 2.0 it looks like Uber is just doubling prices and may not have put a lot of thought behind it.
  • Passengers are also more likely to accept surge pricing if their phones are low on battery – probably because they don’t want to risk waiting and trying again in 15 minutes to see if surge pricing disappears.
  • One way for Uber to assuage passenger anger about surge pricing would to be boost the base fare, and instead of adding a surge during busy periods, offering a discount during non-busy periods.
  • But while this may help placate passengers, drivers would probably then become angry at the idea of driving for a discount during non-busy periods.

The full podcast is interesting. You can hear it here.

Source: NPR

Via: Quartz

The Economics Of Hamilton, The Broadway Show

May 29, 2016 in Daily Bulletin

Hamilton is a Broadway show that has become the next big thing. Michael Sokolove looked at the economics of that kind of success:

  • Usually Broadway shows aren’t that great an investment. But when you have a hit like Hamilton there are few returns of investments so appealing.
  • After you pay the initial upfront costs the show can run for decades, and in multiple locations.
  • All in all investors put in $12.5 million for the show. It is soon expected to make $1 billion in profit in New York alone.
  • In fact the show earns half a million dollars in profit every single week.
  • And $82 million worth of tickets for future shows – the equivalent of 400 sold out shows – have been sold.
  • The producers of the show could easily make more money. While they sell tickets for between $67 and $477, scalpers go onto sell the tickets for up to $2,000.

Read more here.

Source: The New York Times

Via: Marginal Revolution

Your Parents Do Have A Favourite Child And It May Depend Upon Your Gender

May 28, 2016 in Daily Bulletin

Emily Bobrow looked at parental preferences for gender:

  • Couples are more likely to stay together if their child is a son rather than a daughter.
  • This seems to primarily be because fathers have a preference for sons over daughters. Mothers are mostly ambivalent between genders.
  • One reason for this preference seems to be that fathers struggle to form a connection with their child. Babies literally rely on their mother’s body to live, while father’s have to create a role for themselves.
  • In that context it’s easier for the role to model what it means to be a man, and shape the child as such.
  • Men also seem to struggle to make friendships in adulthood. A son can fulfil the desire for an emotional connection with another male.
  • All of this may also explain why the fathers of sons seem to work harder, bring in more money, and spend more money.
  • Interestingly households with male children also spend more money on “women’s goods” like jewelry – indicating that mothers benefit too.
  • But a son can also mean that unhealthy relationships persist. Women are less likely to leave their husbands if they have a son – believing that sons need fathers.
  • In contrast, with daughters, they feel that it’s important the daughter have a good role model for what a man should be like – making women more likely to leave an abusive husband.

Read more here.

Source: 1843

When You Have To Pay To Sit Next To Your Child

May 26, 2016 in Daily Bulletin

In a quest for revenues, US airliners have taken steps that make it difficult for parents to sit next to their children writes Scott McCartney:

  • Many seats in an airplane cabin are now given a designation such as “extra legroom” which requires a charge to reserve.
  • It vastly limits the number of open seats on an airplane at the cheapest fare.
  • This means that families are finding it increasingly difficult to travel together.
  • The American government is trying to change this. The upper house passed a unanimous provision to require that children be seated next to their parents. However it’s unclear if the lower house will allow it to go through.
  • Other airlines are taking their own steps to assuage the problem. United Airlines is allowing people with young children to board the plane early once again, giving them first dibs on seating.

Read more here.

Source: The Wall Street Journal

Via: Gizmodo

The Rise Of Food Fraud

May 25, 2016 in Daily Bulletin

You may not always be eating what you think you’re eating. Natalie Whittle wrote about food fraud and how things came to be this way:

  • The story of a fish “freshly caught off the coast of Scotland” illustrates why food fraud is so difficult to catch. The fish is captured by a Russian ship, sent to China to be fileted, then sent to Korea to be stored, and sold on to other intermediaries from there.
  • Organized crime has been getting into this business because it’s so easy to infiltrate and because it requires things that they normally have – like haulage, storage, and money laundering capabilities.
  • It’s innocuous items that are targets for fraud. The apple juice you’re drinking may not be what you think it is. Margins may be low but a lot more apple juice is drunk than champagne.
  • Similarly testing indicates that 25% of dried oregano is cut with things like olives, and hazelnut leaves.
  • The industry is hitting back. A lab in Belfast uses a £500,000 machine that has been repurposed to detect chemical traces of foreign food instead of cancer.

Read more here.

Source: Financial Times

Via: Marginal Revolution

Teaching Children About Organ Donations

May 24, 2016 in Daily Bulletin

Scott Wilson wrote about a charming initiative:

  • A lack of organ donors is a problem around the world.
  • To instill in young children early the benefits of organ donation, one organization, Second Life Toys, is taking broken toys from children and fixing them with an organ transplant from donated old toys.
  • Those who donate their old toys will receive a letter once their toy has been recycled to fix another child’s toy.
  • In the example above a squirrel’s tail has been used to heal an elephant’s broken trunk.

See other examples here.

Source: Rocket News 24

Via: Mental Floss

UN Votes For Cash

May 23, 2016 in Daily Bulletin

The Economist took a look at how votes at the UN can be converted into cold hard currency:

  • One analysis indicated that African countries that vote along with China at the UN see a boost in the amount of aid that they receive from the Middle Kingdom.
  • Every 10% increase in the amount of votes alongside China’s, leads approximately to an 86% boost in aid.
  • If Rwanda, for example, were to increase the number of votes it cast with China from 67% to 93% it could, perhaps, see a 289% boost in Chinese cash.
  • The practice isn’t limited to China. The United States also awards more aid projects to countries that vote along with it.
  • However, America’s record is more mixed. It, for example, provides billions to Afghanistan, but Afghanistan enjoys voting contrary to American preferences.
  • What seems wasteful is that diplomats from several countries – such as Burundi and Swaziland – don’t show up for a large proportion of the most important votes. They may be leaving money on the table.

Read more here.

Source: The Economist

What It’s Like To Work At Hogwarts

May 20, 2016 in Daily Bulletin

Rae Votta spoke to Hogwarts employees…more specifically employees of the Wizarding World of Harry Potter at Universal Studios Hollywood – a theme park:

  • Before being hired park attendants are asked basic trivia questions such as the four Harry Potter houses.
  • If they pass the initial screening they get put into a week of intensive classroom training where they learn the ins and outs of Harry Potter trivia, since engaged fans are going to expect them to know it all.
  • All attendants have to play characters but for the most part they’re all non-Hogwarts students. They want park guests to feel special and unique about being the ones who get to go to Hogwarts.
  • Attendants also aren’t allowed to claim that they know any of the main characters personally. They are, after all, not part of the story.
  • And if someone asks about Voldemort? Attendants must look terrified and refer to him as “You Know Who”.
  • The theme park itself is set in between the third and fourth books – there are posters about Sirius black escaping and the upcoming Triwizard tournament.
  • It is also perpetually winter, which explains why visitors are unlikely to bump into even side characters like Cedric or Cho Chang, who are presumably at home for the holidays.

Read more about what it’s like to work at the park over here.

Source: Mel Magazine

Solitary Confinement Isn’t Really Solitary

May 19, 2016 in Daily Bulletin

You get sent to solitary confinement you have to wile your days away alone. Or so you’d think. The reality is much worse, wrote Christie Thompson and Joe Shapiro:

  • 80% of federal prisoners in solitary confinement have a cell-mate.
  • This is largely because of prison over-crowding requiring wardens to get creative.
  • This sounds great – human contact – but in reality the cells built for solitary can really only fit one person. In many if two people are in the cell then only one person has room to stand.
  • Since you’re in solitary you also then spend every minute of every day in the presence of this person whose every breath you can hear.
  • As the cells were desined for individual prisoners there’s no way to tell a prison guard if your cell-mate is attacking you.
  • And that happens surprisingly often. If you’re in solitary confinement, then your moral compass is already probably a little off. And if you’re tired of your roommate you can get rid of them by killing them.
  • Given the number of prisoners serving out life sentences it’s not like there’s too much of a consequence – beyond being deemed mentally unfit and getting your own cell.

Read the stories of prisoners who were killed by their “solitary” cellmates, the effects it had on their families, and see photos here.

Source: The Marshall Project

Via: Marginal Revolution

That Time The Marine Corps Used The Video Game Doom As A Training Tool

May 18, 2016 in Daily Bulletin

Matthew Gault wrote about a video game inspired by the marine corps, which went onto provide training for the marine corps:

  • In the 90s the corps were facing a bit of a budget shortfall and weren’t sure they could afford all the training exercises they deemed necessary.
  • Two exceptionally lucky employees were then asked to play video games as their job, to find one that could perhaps supplement training.
  • The two (presumably after repeated missed deadlines and requests for just one more turn) settled upon Doom – the game is about marines fighting off evil and it had multiplayer options.
  • The game was heavily modded – the demon enemies were replaced with models that America was more likely to face on the battlefield. The weapons were made to look more similar to standard issue marine corps ones.
  • It was, of course, a game, and it couldn’t take the place of real training. But it encouraged recruits to practice teamwork and fast thinking skills.

Read more about the history of the game, and find out how you can play it over here.

Source: War is Boring