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The Economics Of 'Seinfeld'

Ace your next freshman econ exam by seeing what economic principles occur in Seinfeld.

The Economics Of 'Seinfeld'

February 27, 2022

Welcome to ComedyNerd, Cracked's deep-dive series on funny business. (Also, you can stay up to date with the ComedyNerd newsletter -- sign up here.)

Ever wonder, “What economic principles appear in Seinfeld, and how are they used?” Oh… well here they are anyway.

15

COMEDY NERD CRACKED.COM SIGNALING Signaling is the idea that one party (termed the agent) credibly conveys some information about itself to another party (the principal). In The Apartment George uses a wedding band as a signaling device as it shows that he is 1)marriage material and 2] not gay. — Source: Yada Yada Yada Econ

14

COMEDY NERD CRACKED.COM MONOPOLY POWER Monopoly power is the ability of a firm to alter the market price of the good or service it sells. This is where the power of the Soup Nazi comes from. When no one else makes soup as well as you, you can run your soup shop however you want. — Source: Yada Yada Yada Econ

13

COMEDY NERD CRACKED.COM RATIONING MECHANISM A rationing mechanism is a system for choosing who gets how many goods during a shortage. Long lines are often used to ration goods in shortage (so the good is distributed on a first-come, first-serve basis). Long lines as in, waiting for your table at a Chinese restaurant. Or only being able to move into a rent controlled apartment when someone dies. — Source: Yada Yada Yada Econ

12

COMEDY NERD CRACKED.COM TRADE-OFF A trade-off refers to giving up one thing in return for something else. It implies a decision to be made with both an upside and downside of a particular choice. For example, Jerry and Elaine wishing to have sex and be friends, soon reveals itself to actually be a trade-off as they can't do both. — Source: Yada Yada Yada Econ

11

COMEDY NERD CRACKED.COM BADS In economics, a bad is the opposite of a good. Bads can be thought of as goods with a negative value to the consumer, or a negative price in the marketplace. There are several examples of this in the series, Jerry's couch after people find out it's been urinated on, The muffin bottoms in season 8, and George's book he took into the bathroom with him. — Source: Yada Yada Yada Econ

10

COMEDY NERD CRACKED.COM ARBITRAGE P - DE Arbitrage is the practice of taking advantage of a price difference between two or more markets. Arbitrage is the driving force in the episode The Bottle Exchange, when Kramer and Newman are trying to make a profit from selling cans in Michigan as opposed to NY. — Source: Yada Yada Yada Econ

9

COMEDY NERD CRACKED.COM PRODUCT DIFFERENTIATION الله LEAUS Product differentiation is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market. This may involve product characteristics, services, or location. This clearly describes Jerry's idea in The Cafe to have Babu serve Pakistani food to make his restaurant stand out. — Source: Yada Yada Yada Econ

8

COMEDY NERD CRACKED.COM EXTERNALITY jungfraujed 11333 firt BERNESE OBERLAND SWITZERLAND An externality is a situation in which the private costs or benefits to the producers or purchasers of a good or service differs from the total social costs or benefits entailed in its production and consumption. A great example of this is when a Kenny Rogers Roaster moves in next to Kramer, which casts his entire apartment in a red glow. — Source: Yada Yada Yada Econ

7

COMEDY NERD CRACKED.COM BLACK MARKET A black market is one in which certain goods or services are routinely traded in a manner contrary to the laws or regulations of the government in power. George and Kramer BECOME a black market when they scalp tickets in The Opera. Kramer and Newman use a black market to buy a shower head meant for elephants. — Source: Yada Yada Yada Econ

6

COMEDY NERD CRACKED.COM COST BENEFIT ANALYSIS Cost Benefit Analysis essentially boils down to weighing the pros and cons of any decision you make. For example, George thinks he is offered a job in The Barber, but the man offering the job is cut off before he can explicitly say it. George weighs his options and decides that showing up and pretending he got the job is the best move. — Source: Yada Yada Yada Econ

5

COMEDY NERD CRACKED.COM COMMITMENT DEVICE A commitment device is a way of changing incentives SO as to make otherwise empty threats or promises credible. In The Nose Job Jerry is dating a woman he hates but who gives him great sex. The commitment device in this episode is when Jerry has Kramer tear up her phone number to help cut Jerry off. — Source: Yada Yada Yada Econ

4

COMEDY NERD CRACKED.COM BANDWAGON EFFECT The Bandwagon Effect is the observation that people often do things because many other people do the same. Without examining the merits of the particular thing, people tend to follow the crowd. We see this when Elaine's boss eats a candy bar with a knife and fork SO everyone else starts doing it. We see a refusal of the effect when Kramer refuses to wear the aids ribbon. — Source: Yada Yada Yada Econ

3

COMEDY NERD CRACKED.COM ALTRUISM Altruism is selfless concern for the welfare of others. Altruism focuses on a motivation to help others or a want to do something good without reward. George is shown on 2 occasions faking altruism. In The Calzone, George takes money his out of the tip jar SO that he can put it back in and get credit for his generosity. We see the same effect when his girlfriend takes credit for buying Elaine's big salad. — Source: Yada Yada Yada Econ

2

COMEDY NERD CRACKED.COM INCENTIVE LATTER CARNER An incentive is any factor (financial or non-financial) that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. We see this in The Andre Doria when Jerry is incentivised to help Newman deliver 8 bags of mail SO that Newman will move to Hawaii. — Source: Yada Yada Yada Econ

1

COMEDY NERD CRACKED.COM SCARCITY Today Sponge Vaginal Contraceptive Sponge nge -9 Active Ingredient 1g Nonoxynol-9 60 Sponges - Lot 06214 214 Today Because the total quantity of [rarel goods that people would like to have far exceeds the amount which resources are producing, people must constantly make choices about which desires to satisfy first and which to leave less than fully satisfied for the time being. We see this principle In The Sponge as Elaine is forced to stockpile the last remaining remnants of her discontinued birth control and have less sex due to people not being sponge-worthy. — Source: Yada Yada Yada Econ

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