Friday, November 30, 2012

What can you buy for $5?

Good morning economists! The budget constraints nowadays have an adverse effect on consumption. So when someone advertises a product or service which he/she can perform for $5 then that is what I call an attention grabber. So what can you buy for $5? Here is a list with the most weird services offered over the internet:

1) A person willing to eat catfood. Apparently this person is willing to eat feline food for a fiver...Although a small dosage may not really pose a problem, I suspect that if the "service" hit, she will be spending her hard earned money on doctor visits. Here is the link.

2) For a fiver, a woman with the alias Natalia, is willing to flirt with husband, wife, boyfriend, girlfriend to test their loyalty. Be aware...you have been warned. Here is the link.

3) Another person over at fiver, is willing to write a message on her lips and take photos as a means of promotion. I would very much like to see a promotion of the firm "Ziffren, Brittenham, Branca, Fischer, Gilbert-Lurie, Stiffelman, Cook, Johnson, Lande & Wolf." And yes, there is such a company! The link!

4) A "brave" user on fiver is willing to fill his shoes with ketchup or mustard and wear them for five minutes. Yes the buyer has the option of ketchup vs mustard! (link
Have a high "fiver" day!


Thursday, November 29, 2012

Meet the man that was run over by his own car

Good morning economists. Are you familiar with the term "preemptive fines"? These are fines (penalties) that people have to pay if they demonstrate indifferent behavior which may result to a crime. For example, recently a woman had her car stolen outside a newspaper kiosk where she stopped to buy a newspaper but left the car running. She was hit with a police fine because her behavior caused the thief to steal her car.

Yesterday, police were shocked to find Brian Reynolds laying injured after he attempted to stop a car with his bare feet, in other words he tried to pull a Flintstone. This was after the brakes on his 1987 Chevy failed. The otherwise victim in this case was given a $35 fine for handling defective equipment.

As we find ourselves in the midst of a recession, are these preemptive fines effective? A brake change can cost up to several hundreds of dollars. A $35 fine is unlikely to deter putting off the brake change up to the point of failure. Should fines be revised in periods of recession and if so in what way?

Have a "fine" day!

Tuesday, November 27, 2012

The theory of relativity in economics

Good morning economists. We have all heard of the saying that "one man's trash is another man's treasure." Or the more classic "the beauty is in the eye of the beholder". Today we will talk about the subjective valuation of goods and services.

Have you ever tried to buy a used car? The salesman will try to highlight all the extras that come with the car arguing that they normally cost hundreds of dollars to have them installed.

Now have you ever tried selling a used car? When you let the salesman know about all the extras, he is quick to dismiss them. In fact all of the salesmen that I talked to argue that the extras do not add to the real value of the car.
So I will rephrase the good old saying. It seems that "the value is in the eye of the beholder". Come to think of it. Is there such a thing as an objective valuation?



Have a valuable day!

Monday, November 26, 2012

On the economics of generosity

Good morning economists. A while back, we discussed the idea of the dictator game in economics where a subject is given a specific amount of money and is presented with an opportunity to share his/her endowment with a second person. The conclusions for this game reveal that people are more altruistic than economic theory presents them to be. They are indeed prepared to share as opposed to keeping the entire amount for themselves, however, one needs to ask what their guiding motive is.

A while back, I was walking along a busy street with my significant other, when we discovered a wallet lying on the pavement. We picked it up and noticed that there were a couple of credit cards inside together with a photo ID of the owner and also some cash as well. Without a second thought we presented the wallet to the police that returned it to its rightful owner. Of course a wallet with 30 something Euro did not impose any moral dilemma.

The second story from Sacramento USA, involves two ventilation workers who discovered $300.000 worth of gold dust stored away in 12 jars of baby food as they were working underneath the floor grid. They were both extremely surprised. One of the workers admitted that he thought about keeping the gold, but eventually he returned it to the homeowner. Could it be that he was forced into this action since his co-worker knew about the find? Plus, let us face it...it would have been difficult to remove 12 jars of gold dust without being discovered by the homeowner.

Herein lies the answer as to why the dictator game shows behavior which departs from the parameters of economic theory. INFORMATION. In the dictator game all the subjects know how the game is played. Even the receiver knows that the dictator has an endowment that may be shared between the two. If the receiver did not know about the endowment, the sense of altruism that the dictator feels from sharing is immediately nullified. As such he/she would most probably keep the entire sum instead of sharing. I am willing to bet that if the worker described above was working alone and the owner was not at home those jars of gold would have disappeared in a few seconds.

Overall, generosity can be triggered by symmetric information between two or more subjects. The greater the asymmetry, the lower the urge to be generous!

Have a generous day!

Sunday, November 25, 2012

The economics of lying

Good morning economists and have a lovely week. I was reading on the news the other day about Perse school in Cambridge, England, where a strange rule allows students to get out of trouble with the headmaster (principal) if they manage to come up with a creative excuse within a time limit of 10 seconds. Thus, it is possible to talk their way out of punishment by lying and doing it so in a creative manner. Even though the principal of the school was criticized for allowing such a rule, he is convinced that students are forced to think "on their feet" therefore allowing them to develop mentally. The unorthodox rule, however, creates a problem in that it raises bad behavior activity that is premeditated. Allow me to explain.

We can classify lying into two general categories: premeditated lies and instantaneous lies. A premeditated lie is one that is prepared in advance because it is known to the culprit that he/she will engage in an inappropriate activity in the future. In case that he/she will get caught, the excuse will be already prepared. Even in this case though, the culprit knows that the lie may be accepted or rejected by a court of law.
 The second category is instantaneous lies. In this case, the culprit is accused of doing something which was not premeditated. In this case, the accused needs to come up with an excuse on the spot. Perse school's "get out of jail for free" card applies strictly to this category of lies and will not work in the case of a premeditated activity. In fact one can argue that because students are familiar with the rule, they will switch their behavior to premeditated activities that will allow them to defend themselves when they face the headmaster.

Is this a good thing you may ask? Let me remind you that premeditated crime is punished harsher because it shows intention! Time for the headmaster to change his tactics.

Have a truthful day!

Friday, November 23, 2012

Black Friday stories and lessons to be learnt

Good morning economists. By the time some of you will be reading this, you will have already concluded your Black Friday shopping. In fact I am writing this post at 3:37 am Eastern time and many of you are probably standing in line in front of your favorite store.

I have posted in the past about how special offers or low prices can affect a person's judgement. If the price is low enough, this can cause consumers to buy a product even though they do not actually really need it. They just consider that the offer is "too good to pass up".

I remember back in 2007 I was affected by the Nintendo Wii hype. The new games console was just released and people were lining up in front of stores on Black Friday to secure one of the limited pieces available. I was one of the many people who lined up in front of my local Target store anxiously waiting for the doors to open. Thankfully I was first in line because I arrived there at 12:30 am. The doors were opening at 6:00 am. Soon enough, about 200 people were lining up behind me.

At around 4:00 am the store manager opened the door and informed us that only 10 units of the games console arrived at that store. He handed 10 coupons to the first ten people standing in line that gave the bearer the right to buy the console in store within the next 24 hours. I was happy and relieved at the same time because I had the valuable coupon in my hand. The people who got the coupons agreed to go home, rest, and come back later in the day to claim their Wii. Upon leaving, I asked the remaining 190 people in line whether they were waiting to buy the console. Pretty much everyone said yes. I informed them that only 10 consoles had arrived and that we already had the coupons, so they could go home or to another store if they wanted.

The result? Nobody believed me even though I was telling the truth. Nobody moved from their spot and when the doors opened two hours later they found out the hard way!

Long story short I ended up buying the Wii only to sell it a couple of weeks later for a hefty profit on the black market (quantity demanded was a lot higher than quantity supplied boosting up the prices).

Moral of the story? Exercise good judgement. Do not allow the special offers to manipulate you into buying things you do not need. Black Friday is based on this phenomenon.

Have a nice, shop hunting Black Friday!

Thursday, November 22, 2012

Say yes to the dress...the everyday economist style

Good morning economists. Last night, I was watching an episode of "Say yes to the dress" on TLC. For those of you who have not heard about the show before, future brides visit the Kleinfeld bridal store where they hope to find their dress for that special day. (For those of you who wonder why I was watching the show, it suffices to say that there was nothing else on TV.)

The funny thing is that the producers of the show came up with an episode which is a classic case study for economists! For the sake of anonymity, I will give you the gist of the story using generic names for the brides involved.

Two brides entered the store each with their respective families. The brides did not know each other and the fittings were conducted in independent rooms. Both bride A and bride B had a budget of $5000 for their dress. Both appeared to have the same taste and from what I could perceive they both belonged to the same social class. Both brides were trying on dresses within their budget when all of a sudden an important variable changed for bride A.
Bride A's mother handed her an open check informing her that she now had an unlimited budget for her dress. Suddenly, bride A was not satisfied with the $5000 dresses and opted for dresses with a higher price tag. She even tried on a $12000 dress before she settled to $7000 out of guilt that she did not want to spend a ridiculous amount even though she had an unlimited budget. She was satisfied with the price tag of $7000.

Bride B was trying dress after dress and when she was informed that there was one on sale for $2500 she was ecstatic! She tried the dress on and she immediately liked it. When she informed her family of the price, they were extremely surprised and were enthusiastic when she announced that the specific dress constituted her final choice.

To recap, bride A had to compromise for a dress that was worth a lot more in terms of money then bride B's dress. Bride B was ecstatic because she found what she wanted and was well under budget. Given the case study above, does unlimited budget always yield higher utility (satisfaction)? Apparently not!

Have a nice day!




Tuesday, November 20, 2012

Meet Noodles, a dog with a bank account!

Good morning everyone. No matter the country they are located in, nowadays, banks seem to complain about liquidity problems and insufficient deposits due to the recession. And yet Nat West bank in Leicestershire, England opened an account for Noodles, an otherwise sympathetic four legged creature. This came to the attention of the bank officials when Noodles the dog withdrew more money than there was available in his account.
As a result a letter went out charging Noodles an overdraft fee of $10. However, the fee was not recovered since Noodles and his owner moved house. Metro newspaper suggests that many dog owners open accounts for their pets in order to pay vet bills and other pet related expenses.

You know what they say..."it's a dog eat dog world out there". And apparently they have bank accounts as well!

Have a nice day!

Monday, November 19, 2012

Do you shop while on the toilet?

Good morning everyone! A new survey by CashStar and Harris Interactive reveals that more than 38 million Americans have purchased stuff online while using the restroom. The same survey also revealed that more than 4 million people shop while driving!

Welcome to the digital age where people shop in all types of weird places. Smartphones, tablets, laptop computers as well as the rise of deals that can only be found online are the reasons for this phenomenon. If simple actions like going to the restroom complement shopping online (hey the restroom may be the source of inspiration for some people) then why not do it properly. Meet the new gadget that is a must for a new home...
Personally, I would like to know what stuff people buy while on the toilet. In what room do YOU do your internet shopping?

Have a relaxing restroom day!


Sunday, November 18, 2012

Public servant looking for a date...

Good morning economists! Back in September, I posted about the economics of dating. Yesterday night I was out for coffee with some friends and the discussion shifted over to dating classifieds in newspapers and magazines. I have always found this classified section of the newspaper interesting as I am intrigued by the choice of language and content that some people choose to include in their ads.

Traditionally, men tend to highlight their social status in order to attract women. Ladies on the other hand, place greater importance on physical looks in their classifieds as a means of attracting men. This behavior according to my old sociology professor is inherently tied to the fact that the man has traditionally been the breadwinner in the family. Social theory suggests that a relationship is actually a contract where two parties agree to an exchange of characteristics that they bring to the table. This contract, however, does not remain untouched by the current economic recession.
Classifieds nowadays have financial stability and security as the main highlight, for both genders. Public servants have always enjoyed the feeling of job security so there are literally hundreds of ads daily about public servants looking for dates. Indeed there are so many of them one may think that either the public service is disproportionately huge, or, that it is comprised solely of single people who are looking for a date.

But as the government is looking to fight the budget deficit, public service will undoubtedly shrink. Will that change the world of dating classifieds? (See pic above!!!)

Have a lovely week! 

Thursday, November 15, 2012

Chili powder vs robber with a gun!

Good morning everyone! We have discussed in the past the increase in criminal behavior which is a consequence of the existing economic condition worldwide. As more and more people find themselves falling below the poverty level, some turn to illegal activities in order to compensate for their loss of income. In fact I was watching the news the other day and I was surprised to see that certain stores constitute regular targets for robbers. There are plenty of examples of store that have been hit repeatedly over the past few weeks. Convenience stores are especially susceptible to robberies. The fact of the matter is though, that convenience store owners are so tired of getting robbed that they have become specialists in thwarting potential criminals.

Would you prepared to defend your store if you were asked to hand all your money at gunpoint? Well, just like people find themselves in a desperate position so as to turn to robberies, victims are also desperate enough so they find the courage to defend themselves against crime. An example of this was witnessed in Massachusetts where a convenience store owner found a new innovative weapon to defend against a gunned robber.
Let me tell you, finding the courage to throw chili powder in the eyes of a man who was holding a gun reveals that the owner was desperate not to get robbed.

Would you hand over your wallet if you were robbed at gunpoint? Some people would, some others would be prepared to fight. In fact we can argue from an economic perspective that people with high marginal utility of money (people who value money more are usually in lower income groups) will fight and  people with lower marginal utility of money will hand over their wallets.

What would YOU do?

Have a nice weekend!

Wednesday, November 14, 2012

Marijuana legalized in the US, Europe to follow?

Good morning economists. Well, it seems that more people are now supporting the legalization of marijuana. In the past, the drug was legal for medical use but states like Colorado are now passing initiatives to legalize pot for recreational use. In Europe, marijuana is legal in Holland but with an estimated 1,7 billion dollars worth of merchandise being sold in 2011 alone, I am wondering whether other countries may be tempted to legalize it as well. Economic reasons alone could lead to legalization as in the midst of the recession taxing marijuana may be in the best interest of public economics.

A drug dealer in Brooklyn New York, who wished to remain anonymous donated half of the money he made in two days from the sale of marijuana to victims of hurricane Sandy. He donated 700 dollars, which means that his monthly income is estimated at 21,000 dollars. That's a lot of money to tax!
Meanwhile, investors are looking for ways to take advantage of this wave of legalization. Already, people are buying shares from medical companies that produce machines that identify people who are eligible to receive their dosage of the drug via fingerprints. It will be interesting to see what other types of companies will enter the stock exchange. Meanwhile the market price of a regular legal dose is 12 dollars.

Have a nice day!

Tuesday, November 13, 2012

The telephone game (Bitcoins part 2)

Good morning economists. If you recall a couple of days back I wrote an article about the bitcoin phenomenon. If you do not know what a bitcoin is or the story behind bitcoins you can access this information here.

The conclusion of my previous post was that bitcoin was a rather sluggish attempt to create an online currency that was plagued with security issues causing a lot of people to lose their hard earned cash. Yet still ever since I posted that entry, I have been receiving emails and messages from people arguing that the bitcoin was actually a success. One has even gone as far as to argue that I confused the purpose of the bitcoin. Some basic research can reveal that the bitcoin was the invention of a person who was never seen and who disappeared all of a sudden a few weeks before the system of the most important bitcoin broker was compromised resulting in huge amounts of bitcoins being lost.

This fixation of people on the idea of bitcoin, even after they might have fallen victims to hacker attacks or after they knew that other people were ripped off is puzzling. There are still people who believe that the bitcoin is or will be a success. But let me tell you. These are the people who are interested on making a profit so much so that they overlook important information that can save them a lot of money and heartache. They are blinded by they hype, so they cannot stop and think for themselves. Allow me to illustrate with a cartoon like representation.
 Remember when we were little kids and used to play the telephone game? Information was so distorted when passing from person to person that it did not make sense in the end. My personal opinion is avoid falling victim of the telephone game. Think for yourself, no matter the investment involved. And for all that is holy. Do stay away from bitcoins...for your own good.

Have a telephone free day!

Monday, November 12, 2012

The haunted toaster!

Good morning economists! Today I would like to discuss the notion of expected utility. Whenever we purchase an item or service, we expect to receive some degree of future enjoyment out of its consumption. But what happens when the item fails or requires technical support? It suffices to say that consumers are disappointed or become agitated from the fact that their enjoyment is not what they were expecting.

Back in 1984 on the "Today" show, a woman by the name of June O' Brien took it to another level, when on national TV she admitted that her toaster was possessed by the devil!
The toaster was spitting fire, burning the loafs of bread and apparently it also knew how to write (watch the video and you will understand). Today, this interview is deemed as the greatest interview in television history and this is all because of a toaster.

You know what they say..."you get what you paid for", meaning that a higher expected utility is positively related to a higher price that we pay for an item today. Do you agree with this statement?

Meanwhile, I wonder whether the toaster was "made in China". Not to make fun of Chinese products, but I had such a toaster which spontaneously combusted! Darn it, I should have called the television stations.

Oh well!

Have a nice day!  

Would you buy a $200 iPad?

Good morning economists! Of course you would buy it in a heartbeat. If you were buying a real iPad that is...A woman in Arlington, Texas, was approached in the parking lot of a gas station (!!!) by someone who offered her a deal on a brand new iPad. $200 instead of the $800 that it was retailing in the store. The woman was quick to accept the deal. When her sister opened the package, she discovered that she was actually sold a mirror dressed up as an iPad!
You know what they say, if the offer is too good to be true then it is usually not true at all!

The question that arises however, is why would anyone buy an $800 iPad for only $200? I mean, it does sound suspicious and the offer should make the scam alert go off. Of course the risk of being scammed is always there. However crooks need to decide on the price that they are selling the item, and this is no easy task!  The price needs to tempt the buyer into purchasing the item and at the same time it must not be too low so as to arise suspicion.

"Some of (the victims) think they’re getting a good deal on an iPad and it kind of blocks their sensory perception of right and wrong,” a Grand Prairie detective said and he is absolutely right. Apparently, the woman in our story above was blinded by the $600 savings on an iPad. Does she have the right to be upset at the crook who sold her the fake iPad or should she be upset with herself for her false judgement?

How much is your sensory perception of right and wrong worth?

Have a nice day!


Thursday, November 8, 2012

Bitcoin: thank God it failed!

Good morning economists. I would like to finish this week's posts with a discussion on the failure of the bitcoin. Chances are, that you, like me, have not heard of the bitcoin before. Indeed it was not until yesterday that this concept came to my attention.

Apparently someone by the name of Satoshi Nakamoto came up with the idea of a universal electronic type of money, called bitcoin. This virtual money could be earned by solving online puzzles by people who were called "miners". The economic theory behind botcoin seemed sound. Bitcoins were to be released slowly so that the value was kept relatively constant and the problem of inflation could be handled. Bitcoin was introduced just when the global recession hit, when investors were losing confidence in all major currencies. At the same time bitcoin exchange with real currencies could be facilitated through bitcoin brokers. Here is a short video released in 2008:
Bitcoins were to be used for online payments and several retailers were accepting them as a means of payment. However, it never really became a popular currency for exchange. At one time the exchange rate of the bitcoin to the dollar was 1 bitcoin for $27. This meant that demand for bitcoins increased dramatically and a few thousands of bitcoins were worth millions of dollars.

Then all of a sudden the online system crashed. Satoshi Nakamoto disappeared. Sometime later, the online wallets where consumers kept their bitcoins were attacked by hackers who were emptying them in the blink of an eye. Sadly, the bitcoin was not allowed to die there. It still exists today but no one in their right mind would (according to my own opinion) try to buy bitcoins.

The bitcoin was a failure, but its short lived success (in 2009) raises the topic of the need for an international currency. It seems that people are desperate for a unified currency, maybe as a reaction to the economic recession. Pity that this need was taken advantage of by a common thief.

Have a real currency date. 

Wednesday, November 7, 2012

Is anticipation part of the consumption process?

Good morning everyone. today I would like to discuss the topic of anticipation. Think about this...you just placed an order online for an item that you really want. Delivery through the post is about 5-6 working days. Because this is an item of desire, the anticipation to receive the item is building up during the wait period. In fact the anticipation is part of the whole enjoyment process (total utility). One can argue that this is what makes sites like Ebay so successful. Because they add to the total experience of purchasing and enjoying the item.
Of course the problem with such websites is that anticipation may rise to such a level, that it shadows any budget constraints so a lot of times people are overspending. I remember a friend of mine some years ago, bought an iguana cage off Ebay. Problem was, he never actually owned an iguana.

Consumer nowadays purchase more items online than ever before. This is not just because of the lower prices that can be found online, but also because anticipation has an overall positive utility.

Have a postal day!

Sex for gas (petrol)

Good morning economists. Today I would like to discuss the idea of barter. Barter is the exchange of goods and services with other goods (or services) without the need of money to act as a medium of exchange. While you may have performed such an exchange in the past, people that live in New Jersey and New York have made this their daily routine.

After the disaster from hurricane Sandy and the subsequent loss of public utilities such as electricity, people found themselves faced with food and gas (petrol) shortages.
The screen capture above is from Craigslist and presents the severity of the problem. People are prepared to exchange sexual acts for gas! Now the law says that solicitation and prostitution is illegal, however, is this only limited to money?

The rise of the black market of gas is the result of shortages or excess demand in the area. The police has so far confiscated 30 five-gallon buckets of gas from people who drove all the way to Connecticut to buy gas at $4 per gallon in order to sell them at $20 per gallon in New York. I am wondering how gas much the person with the "phat ass" (seen above) is prepared to "pay"!!!

Have a full tank day!

Monday, November 5, 2012

Delivery man urinates on customer's front door

Good morning economists. Today I would like to discuss the issue of tipping. I remember the times when everyone would tip their waiter, delivery guy, hairdresser and pretty much any service provider without thinking twice. But those times have come and gone. Nowadays, people find it harder to leave tips because of the financial situation they find themselves in.

In the US, a tip based wage can be as low as 2.13 dollars an hour in some states. This means that a lot of people working in the restaurant business are dependent on customer tips. When a tip is not provided, it is only natural that waiters or delivery guys become agitated. A delivery guy in Iowa, took it to the extreme, when after delivering a pizza (and received no tip) he got his revenge by urinating on the customer's front door.
If you watched the video you probably heard that the customer knew that she could not afford to leave a tip before she placed the order. I condemn the action of the delivery man, but I also question the customer's decision to use the delivery service when she knew she could not leave a tip. She could have easily picked the pizza up herself or have a friend pick it up on her behalf.

The moral of the story is this. Do not use services that you know you cannot pay for especially when you are dealing with someone who handles your food. The opportunity cost, as you have watched above, may be greater than you originally considered.

Have a tipping day!

Sunday, November 4, 2012

How much money would save you from getting stabbed?

Good morning economists. I thought I could kick start your day with a rather weird fact about money. Money can act as a medium of exchange for your transactions, it is a measurement of value and a unit of account. But what other functions can money have?

I was watching an episode of Mythbusters a couple of days ago where they were testing how many dollar bills it would take to repel a stabbing knife. In other words, if someone came at your with a knife and tried stabbing you in the heart, how many dollar bills would you need to have in your pocket to prevent the knife from penetrating your skin? The answer apparently is 53 single dollar bills are enough to keep your heart safe. But this weird myth, is only applicable if the attacker chose the particular spot as the stabbing point. How many dollar bills would it take to totally safeguard you against an attack anywhere on your body?
Well, the average human skin has an area of 18000cm. The area of a dollar bill comes out to 103.39cm approximately. You need 53 single dollar bills to cover each point on your body. So to cover your entire body with 53 layers of dollar bills you will need 9228 dollars. Of course this result is based on the average human measurements. So if you have been complaining about those extra kilos or pounds that you want to loose, now is the time to do it. Strangely the human dollar shield will cost you less money if you weigh less.

By the way, you do realize of course that the information given above is to be used as a conversation starter. Please refrain from sticking dollars to your body. Someone can come at you with a gun and I do not have the answer of how much you will need to repel such an attack.

Have a nice week!

Friday, November 2, 2012

Husband sues wife because she used to be ugly!

Good morning economists. Well this next piece of news is rather shocking. A couple in China was happily married and decided to have a baby. Once their baby daughter was born, the husband, Zian Feng, was shocked at how "freakishly ugly" the baby was. Further, the baby daughter did not look anything like himself or his wife.

At first, he accused his wife of having an affair and refused that the baby was his own. Since she came under pressure, the wife admitted that before meeting Zian Feng she had spent 100000 dollars on plastic surgeries. Here are the before and after mugshots.
The court decided to award 120000 dollars to the husband who felt cheated by his former ugly wife.

An interesting case we have here. Is marriage a commercial contract where people are judged according to the services they offer (including looking beautiful)? If so, apparently the price of beauty was estimated at 120000 dollars.

Have a "beautiful" day!

Thursday, November 1, 2012

How much is a good service worth?

Good morning economists. I want to share with you something that happened to me yesterday. In the morning I used my blackberry messenger service to send two very important text messages. It seems that there was a momentary lapse (or problem) in the internet service and the messages were sent but were not delivered to their recipient. The failure in the delivery, caused me a great deal of distress for the rest of the day as it was the source of a huge misunderstanding.

Later in the afternoon, I called customer service (of my mobile phone service provider) to pay my account balance. As I was reading my credit card number, I wondered how much I should have been compensated for the distress their service, or to be accurate the failure of their service, caused me. I do not think that the company would really pay much attention to a momentary lapse of service, but for me at least, it was a big deal.
 Think about it. You are getting ready to watch the big game (or show) on TV and suddenly the cable service goes out. How much is this inconvenience worth to you, and should it be deducted from your bill? Afterall, the price you are paying is based on the assumption that the service provided should be flawless.

Have a great service day!

Importing garbage...the new trend!

Good morning economists. In conventional balance of payments entries, we usually observe exports as cash inflows (hence positive transactions) and imports as cash outflows (negative transactions). Sweden is probably the first country in the globe that has managed to convert an import into a cash inflows.

Apparently Sweden is importing junk and it is paid from other countries to do so. Sweden's incinerators are burning garbage in order to provide energy to more than 100.000 households. Sweden is running out of garbage fast and it will need to import 1,76 million tons of garbage from other countries to continue its energy production.
 Ingenious! Isn't this the reason that Sweden is one of the most successful economies during recession periods? Could it be that this is the only example of an "opportunity benefit" instead of cost?

Have a nice day!