andrew_gelman_stats andrew_gelman_stats-2012 andrew_gelman_stats-2012-1105 knowledge-graph by maker-knowledge-mining
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Introduction: Felix Salmon writes : Economists Justin Wolfers and Betsey Stevenson have a problem with Grant Achatz’s pricing strategy at Next, where tickets are sold at a fixed price and are then free to be resold at an enormous markup on the secondary market . . . “It’s democratic in theory, but not in practice,” said Wolfers . . . If a person can sell a ticket for $3,000, the true cost of going to the restaurant — what an economist would call the opportunity cost — is $3000, because that’s how much money the person is giving up for the meal. Bloomberg’s Mark Whitehouse concludes that Next should “consider selling tickets to the highest bidder and giving the extra money to charity” . . . What strikes me is how weird this discussion is. Why should this restaurant owner have some sort of moral obligation to maximize his income and then donate to charity? For one thing, if he really did make more money off the deal he might just keep it. But more to the point, this sort of maximiz
sentIndex sentText sentNum sentScore
1 Felix Salmon writes : Economists Justin Wolfers and Betsey Stevenson have a problem with Grant Achatz’s pricing strategy at Next, where tickets are sold at a fixed price and are then free to be resold at an enormous markup on the secondary market . [sent-1, score-0.498]
2 “It’s democratic in theory, but not in practice,” said Wolfers . [sent-4, score-0.149]
3 If a person can sell a ticket for $3,000, the true cost of going to the restaurant — what an economist would call the opportunity cost — is $3000, because that’s how much money the person is giving up for the meal. [sent-7, score-0.785]
4 Bloomberg’s Mark Whitehouse concludes that Next should “consider selling tickets to the highest bidder and giving the extra money to charity” . [sent-8, score-0.565]
5 What strikes me is how weird this discussion is. [sent-11, score-0.075]
6 Why should this restaurant owner have some sort of moral obligation to maximize his income and then donate to charity? [sent-12, score-0.771]
7 For one thing, if he really did make more money off the deal he might just keep it. [sent-13, score-0.109]
8 But more to the point, this sort of maximization argument is deadly because of its universality. [sent-14, score-0.232]
9 Should Mark Whitehouse be doing things he doesn’t feel like doing, just so he can maximize his income and donate the extra to charity? [sent-15, score-0.468]
10 And in what sense would you ever expect restaurant tickets to be “democratic” (in the words of Wolfers)? [sent-16, score-0.424]
11 In this case, Wolfers and Whitehouse are going through some contortions to argue (2). [sent-20, score-0.282]
12 I’m guessing that if Grant Achatz were to implement the very same pricing policy but talk about how he’s doing it solely out of greed, that a bunch of economists would show up and explain how this was actually the most moral and democratic option. [sent-23, score-0.626]
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