In an article for The New York Times, Cornell University professor Robert Frank describes the interesting, real world puzzles that his students investigate. Frank, whose book The Economic Naturalist uses a similar Q&A format, gives the example of the difference in ticket price between Broadway productions and cinema screenings. The premium price for theatre hits effectively rations scarce seating – whereas the movie can be cheaply screened at additional cinemas and additional times without the same cost barriers as live shows. Frank explains that getting students to pose real world conundrums can give a better understanding of economics as well as keeping it interesting.
Blog Farnam Street repeats advice from one of the most successful car salespeople in the world, Joe Girard. It says that when asked how he manages to get people to like him, Girard answered “I tell them that I like them”. The blog says that the answer is “psychologically sound” as people are more likely to say “yes” to people we like.
Auctions can be an effective way of finding the price a customer is willing to pay. And now the system is being applied to spare business and first class seats on flights, reports The Wall Street Journal. It says several airlines are offering the chance to bid on upgrades, presumably ending up with a lower cost ticket than if they had bought the fare originally. But the article says bidders in the auctions don't get a clear idea of how many travellers they are competing against, or how many seats they're fighting for.