Finally, the topic of monopoly is brought up several times in the book. Interestingly, Landsburg links the idea of price discrimination to monopolistic competition, arguing that the business needs some power to establish varying prices. In this case, such authority decreases the risk of competitors appealing to the highest paying clients by offering a lower price cap (Crapis et al, p. 3589). In the same chapter, Landsburg questions the statement that movie theaters have a monopoly over popcorn, arguing that this belief fails to consider the diversity of customers and their preferences. This question is left unanswered, but economic theory poses that high prices are justifiable due to customer demand. In this revised and updated edition of Steven Landsburg’s hugely popular book, he applies economic theory to today’s most pressing concerns, answering a diverse range of daring questions, such as: After this slight digression into the challenges of empirical research, let me return to my main topic: the power of incentives. It is the economist's second nature to account for that power. Will the invention of a better birth control technique reduce the number of unwanted pregnancies? Not necessarily — the invention reduces the "price" of sexual intercourse (unwanted pregnancies being a component of that price) and thereby induces people to engage in more of it. The percentage of sexual encounters that lead to pregnancy goes down, the number of sexual encounters goes up, and the number of unwanted pregnancies can go either down or up. Will energy-efficient cars reduce our consumption of gasoline? Not necessarily — an energy-efficient car reduces the price of driving, and people will choose to drive more. Low-tar cigarettes could lead to a higher incidence of lung cancer. Low-calorie synthetic fats could increase the average weight of Americans.

Some books are better than you expect them to be and others are worse, but it is unlikely that you err in one direction much more often than the other. If you consistently either overestimated or underestimated quality, you would eventually discover your own bias and correct for it. So it is reasonable to assume that your expectations are too low about as often as they are too high.There were parts of this which I would recommend to many people - explanations of commerce and government spending that made a hell of a lot of sense and which cut through the rubbish we see all the time in social and news media, stuff which I'd encourage everyone to take on board to avoid lazy assumptions and being a bit gullible. Some of the key discussions of 'zero sum' games/situations had great clarity.

This question cannot be answered by pure logic. One must look at actual numbers. In the middle 1970s, Sam Peltzman of the University of Chicago did just that. He found that the two effects were of approximately equal size and therefore cancelled each other out. There were more accidents and fewer driver deaths per accident, but the total number of driver deaths remained essentially unchanged. An interesting side effect appears to have been an increase in the number of pedestrian deaths; pedestrians, after all, gain no benefit from padded dashboards. Leeson, Peter T. “Logic Is a Harsh Mistress: Welfare Economics for Economists.” Journal of Institutional Economics, 2019, pp. 1-6. I have to give this book a three since I did learn something, although I really hold it in remarkable contempt. For the first time ever while reading an economics book, I felt like I understood the contempt held for the 'dismal science'. Revised edition on sale May 1. In this revised and updated edition of Steven Landsburg’s hugely popular book, he applies economic theory to today’s most pressing concerns, answering a diverse range of daring questions, such as: Why are seat belts deadly? Why do celebrity endorsements sell products? Why are failed executives paid so much? Who should bear the cost of oil spills? Do government deficits matter? How is workplace safety bad for workers? What’s wrong with the local foods movement? Which rich people can’t be taxed? Why is rising unemployment sometimes good? Why do women pay more at the dry cleaner? Why is life full of disappointments? Whether these are nagging questions you’ve always had, or ones you never even thought to ask, this new edition of The Armchair Economist turns the eternal ideas of economic theory into concrete answers that you can use to navigate the challenges of contemporary life. Armchair Economist: Economics and Everyday Life by Steven E. Landsburg – eBook DetailsThere is much talk about improving the efficiency of American car manufacturing. When you have two ways to make a car, the road to efficiency is to use both in optimal proportions. The last thing you should want to do is to artificially hobble one of your production technologies. It is sheer superstition to think that an Iowa-grown Camry is any less “American” than a Detroit-built Taurus. Policies rooted in superstition do not frequently bear efficient fruit. People respond to incentives" sounds innocuous enough, and almost everyone will admit its validity as a general principle. What distinguishes the economist is his insistence on taking the principle seriously at all times.

What is common in all of these rubrics? For one, they all invite healthy discussion and most importantly, if the proponent cannot prove it right, the dissenter cannot prove it wrong either so that makes all of these topics a moot point PDF / EPUB File Name: The_Armchair_Economist_-_Steven_E_Landsburg.pdf, The_Armchair_Economist_-_Steven_E_Landsburg.epub He deliberately avoids discussing the weight of human life, health or rights and their place in economics. Why a society demands the safety of people in hazardous situations is not completely attached to an economic cost is something he avoids commenting on. This book enforces the view that economists see everything in material cost (dollars, resources, production) without appropriately giving any importance to the unseen costs (happiness, quality of life, satisfaction) of economic policies.

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal. Chevalier, Judith A., and Anil K. Kashyap. “Best Prices: Price Discrimination and Consumer Substitution.” American Economic Journal: Economic Policy, vol. 11, no. 1, 2019, pp. 126-159. Occasionally people are tempted to respond that nothing — or at least none of the things I've listed — is worth any risk of death. Economists find this objection particularly frustrating, because neither those who raise it nor anybody else actually believes it. All people risk death every day for relatively trivial rewards. Driving to the drugstore to buy a newspaper involves a clear risk that could be avoided by staying home, but people still drive to drugstores. We need not ask whether small pleasures are worth any risk; the answer is obviously yes. The right question is how much risk those small pleasures are worth. It is perfectly rational to say, "I am willing to search for a cassette while driving if it leads to a one-in-a-million chance of death, but not if it leads to a one-in-a-thousand chance of death." That is why more people search for cassettes at 25 miles per hour than at 70.