This morning I blasted my computer speakers in order to hear my iTunes in the shower. Less than 2 minutes later, I thought about the noise [a negative externality] that my landlord and his customers are experiencing downstairs. Next, I thought about a possible threat of a rent increase [a tax] next year to limit this noise pollution. For me, the thought of this threat, alone, served as a correction of this external cost [leftward supply shift].
I enjoy attending rock concerts very much and try to see as many shows that my time and wallet permit. Over the last couple years I have noticed that arenas have been far, and I mean far, from sold-out at many shows.
I see this as a response to very high ticket prices and absurd Ticketmaster service charges. When 30-50% of the seats are empty [a surplus], shouldn't that send a signal to Ticketmaster to cut prices? I believe the demand for most concerts are relatively price elastic (there are exceptions like a Led Zeppelin reunion show) therefore lower prices should only increase revenue.
Ticket promoters seem to be in the process of researching this idea. After a handful of shows failed to sell many tickets at regular prices, LiveNation devoted July 29 to $10 tickets for select shows. Sounds good to me, but what about all the people that paid over $70 with service charges for the same ticket? Here, I am reminded of the textbook example of a price discriminating monopolist.
There are two types of people that cross a busy street when cars are coming: the type that thinks a car should slow down because they are in the middle of the street and the type that runs across because they know they aren't supposed to cross there anyway. I believe most people fall into the latter.
The people that run across the street recognize that cars go fast and can kill them if they are struck; for me, a simple cost benefit analysis and some rational human behavior explains these types.
The people that take their time and expect the cars to slow down for them, are the selfish, self-centered, and higher risk taking individuals that are very trusting of drivers. They also don't mind getting honked at, cursed at, or any single-finger expressions waved at them. But, I wonder. Are these the types that are more likely to start their own businesses, become CEOs, invest their 401ks in riskier funds, thus ultimately ending up with the better chances of earning higher salaries?
I attended the famous Bronx Zoo donation Wednesday day when the Zoo is mobbed by people, camps, and schools. The deal is that admission is free but you should make a donation to the Zoo for each guest in your party. The suggested minimum donation is $5 (Regular Zoo admission is $15). Judging from the look on the ticket window employee's face, they were not always getting that $5. Why? Is it because many people really cannot afford the $5 or are they taking advantage of this "free" day? I am sure that money not spent on the ticket goes to other sources in the Zoo such as food and drink, which yields a very high margin for the Zoo.
I also wonder if everyone is honest when the admission window asks "how many in your group today?" Dan Ariely writes in Predictably Irrational that honesty is tremendously important in our economy and Adam Smith would even agree. Ariely argues that people should carry around the "10 Commandments" or read the Bible or Quran, for ethical reasons. Meaning, that moral codes keep people honest especially when some higher power is watching over. I found this to be a very interesting point, except I wondered about the many atheists, satanists, and apathetic people out there. Is there a code of conduct in Satanic cults?
If you've ever been to the Bronx Zoo, you would know that the sea lions rule, the monkey house is cool, and the gorillas are just awesome! However, I could not believe the rudeness of the people there; the pushing and shoving, and even elbowing with a "sorry" rarely expressed. It was mind boggling to me. Has parenting become that bad? Does the marginal cost of teaching your child good manners outweigh the benefits?
Also, I noticed two young girls by the bison. They walked up to the exhibit, and one exclaims "oh cool," rather loudly because her iPod was blasting in her ear that I could even make out the hit single by Flo Rida. Then she picks up her Team Mobile Sidekick, and starts typing ferociously on the mini keypad. Why bother going to the Zoo?
How can we better our society and economy? The answer in the long run is always simple...EDUCATION. Teach your kids good manners, teach them how to enjoy the little things in life, teach them how to contribute in a positive way, teach them how to say "sorry" and "thank you," and teach them the importance of education so that they can pass on the important values to their kids someday.