Homer Economicus?

March 9th, 2010 · 8 Comments
Behavioral Econ · Just For Fun

Oh, The Simpsons…so a couple of months ago I was approached with the idea of writing about the economics to be found in the Simpsons…I figured that this would be fruitful, since if the Harvard stereotypes regarding the writers are true, it stands to reason that a number of the writers have taken the class that I (used to) teach.

This all started with a paper written by Joshua Hall at West Virginia University- the paper is, in fact, titled Homer Economicus: Using The Simpsons
to Teach Economics. As it turns out, I got much more than I bargained for. First of all, there are over 400 episodes of the show…and yes, I could have done the math to figure this out beforehand, given that the show has been on the air for 20 years. In addition, there are references to economic concepts in over 90 percent of the episodes I have gone through thus far (116 as of about a half hour ago). I have way more material than I need for the book chapter that this was supposed to be for, and I’m too much of an OCD researcher to stop partway through, so I’m probably going to turn my notes into a database of some sort so that people can look up references by topic and use them as teaching tools in their classes. But, as usual, I digress…

My chapter is supposed to be about behavioral economics, so I was very amused to see the following on the Nudge Blog:

(There is actually empirical evidence that this nudge would work. Brian Wansink shows in Mindless Eating that even something as simple as putting candy out of sight or a few steps away can have a big impact on consumption.)

If you are not familiar, Nudge: Improving Decisions About Health, Wealth, and Happiness describes how small changes in the way that choices are presented (choice architectures) can have big effects on the choices that people make. For example, authors Richard Thaler and Cass Sunstein talk about the effect of defaults on 401k savings behavior and give evidence that a simple opt-out versus opt-in scenario increases participation by a factor of four without actually limiting the underlying choices that people have available to them. (The concept is generally referred to as libertarian paternalism, which I have mentioned before.) Their stance is that it’s pretty much impossible to design a choice architecture that doesn’t nudge you in some sort of direction, so we might as well be smart about presenting options in ways that maximize people’s long term happiness (at least as best as outside observers can understand it).

I suppose in some way I am trying to nudge people into wanting to learn economics.

Tags: Behavioral Econ · Just For Fun

8 responses so far ↓

1 steve // Mar 9, 2010 at 5:37 pm

I’m loving the simpsons econ. well done.

one example can teach so much.

it is an additional transport cost. but given this transport cost, the seller, Apu, will position products accordingly to maximise his revenue. products with inelastic demand will be further away, (probably fruit) and products with elastic demand (such as impulse buys of candy) will be positioned close to the counter; re economic geography. i.e. in this case, Apu takes a hit in revenue to help homer maximise well-being.

there would also be some interesting analysis on how to price these goods including the transport cost. the inelastic demand goods would be lower priced when further away but by a portion less than that required for elastic goods; re micro/supply and demand.

love it.
2 econgirl // Mar 9, 2010 at 6:07 pm

The findings of behavioral economists are even more interesting since in a lot of cases the transport costs and such that you refer to aren’t enough to “rationally” sway a lot of decisions, but they do anyway. Psychology is a funny thing…
3 steve // Mar 9, 2010 at 6:19 pm

do you think this is because people get their estimate of transport cost wrong? alternatively maybe there is some information transaction cost missing; that walking accross the store involves considering all the alternatives, whereas people may consider also minimising this transaction cost and just purchasing what is close to the counter.

my expectation would be that consumers are still rational, it is us economists who have missed some extra cost, benefit, or risk factor in our analysis.
4 Justin Ross // Mar 9, 2010 at 8:38 pm

I have just gone ahead and perched a laptop by my tv, so I can write as things appear. BTW, if you see something that is an example of a positive production externality, send it my way!
5 Scott Ritchie // Mar 10, 2010 at 12:30 am

Yet another post about nudges, defaults, and opt-out systems where you fail to mention organ donation
6 Tim Schilling // Mar 10, 2010 at 5:15 pm

Econgirl,
There seems to be problem with the link in the second paragraph.

Loving the post, btw.
7 econgirl // Mar 10, 2010 at 10:24 pm

@ steve: I am hard-pressed to come up with an explanation of how I am missing some sort of cost that makes it prohibitively unattractive to reach into a drawer for a candy as opposed to get it from a jar on a desk. Differences in salience seems to be a more likely explanation.

@ Justin: no positive externalities, just three-eyed fish.

@ Scott: but I DID mention organ donation on Valentine’s Day, so there. =P

@ Tim: Thanks. It should be fixed now so y’all can see the paper.
8 tamara // Mar 15, 2010 at 9:05 pm

the simpson have been around for some time from republicans to dems goverments and vice versa. They have a leason or something that relates to life in every episode.
Economics uses math that doesnt mean is boring

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