A WWII Disney propaganda cartoon
tells people to save for taxes--something not needed once
tax withholding was introduced
in 1943. The first part of the film raises the issue of
whether people spend rationally over time, because if people
did make sound decisions over time, would a film like this
be necessary? Other things that are of interest in the film
is the implicitly recognized tradeoff between guns and
butter. There are also possible issues of war psychology,
though I do not know how that fits an economics course.
Perhaps it raises the issue of whether it is effective to
appeal to motives other than self-interest.
Dan Ariely, author of Predictably
Irrational, explains
behavioral economics, which maintains that people are systematically
irrational. If we recognize that we are not always rational,
what can we do to compensate? Ariely says that standard
economics assumes the world is as good as it can be and
cannot be improved. Do you think most standard economists
would agree? Why or why not?
Dan Ariely, author of Predictably
Irrational, uses tickets to Duke
University basketball games to illustrate loss-aversion or
status-quo bias in this clip.
Why do we value something differently when we own it than
when we do not own it? Can you think of other
examples?
The haggling
scene from Monty Pythos' Life of
Brian is funny because the seller views haggling not as a
means to an end, but as an end in itself. Haggling is a
contest to split up the surplus of a transaction, to
determine how much each party gets of that surplus. Can you
see how the notions of producer and consumer surplus are
involved in this clip? Also, economics does not have a
theory of what happens in the situation of one seller and
one buyer. Does this clip do anything to explain
why?
