Externalities Blog Post

The article that my group read was about the usage of plastic bags by chain stores, and what the city of Chicago has been trying to do in order to reduce plastic bag waste and enforce laws that make these chain stores more environmentally friendly. Plastic bags that are not reused after people go to a grocery store are a negative externality on the environment because plastic is not biodegradable. Many of these bags are used only once by consumers, so at the very least the city hopes to minimize plastic bags being used by consumers of chain stores by making the bags durable enough to sustain multiple uses. However, my group members and I have agreed that this is not enough of a solution to the problem, and we believe that there is more that the city can do to fix the root of the problem (over time).

Our group chose Coase Bargaining as what we believe to be the most efficient solution to fix the plastic bag waste problem in Chicago. We chose Coase Bargaining mostly because it addresses both sides of the problem and assigns responsibility to both parties involved. This recognition of the fact that the customers as consumers of the plastic bags are as much of the problem as the stores providing the plastic bags is what sold our group on this method of problem solving. The Pigouvian Tax on the chain stores providing plastic is a viable option because if done correctly it will certainly reduce the number of plastic bags used and wasted but we believe it will be less effective have higher consequences than the method of Coase Bargaining because the tax ignores the consumers as a contributing factor to the problem, which puts the stores at a greater risk. That is why we believe a discount for consumers who use reusable bags (or perhaps an anti-discount for those who do not use reusable bags) must also be put in place to further discourage customers from using plastic bags.

 

Bibliography

Rethinking Chicago’s Plastic Bag Ban. (2015, September 24). Retrieved April 04, 2016, from http://chicagotonight.wttw.com/2015/09/24/rethinking-chicagos-plastic-bag-ban

Environmental Justice Organisations, Liabilities and Trade. (n.d.). Retrieved April 04, 2016, from http://www.ejolt.org/2015/09/coasian-bargaining-2/

 

 

Game Theory Blog Post

I would argue that trust is a crucial element of my own strategic decision making; not just in games but in life as well. It is important to have friends, family members, or other peers that you can trust when making strategic decision making because the level of trust between you and these people determines the level of risk of being betrayed or supported as consequences of that decision. In games like poker, trust in others becomes very different, as the players are more or less on their own and trust in others becomes more of a tool you use to count on certain people to make certain decisions. But there are many examples of strategic decision making in my own life that more heavily depend on how much I trust my peers. For example, when you participate in an activity with your friends that you know certain other people in your life will not appreciate, such as choosing to spread rumors about people you like, you have to trust your friends enough to know that they will not tell the people you were spreading rumors about that you were the one making lies up about them.

Price Discrimination Blog

I have experienced a significant amount of price discrimination throughout my life. For example, certain restaurants I have eaten at have discounts for children under a certain age, and as a result either my meal or the meals of my brothers have costed less than usual, and sometimes they have been free. Also, my local movie theater sells tickets at different prices based on age, and I have been able to get a student discount by providing my student ID. This type of gender discrimination seems acceptable to me, but there are many other cases which I have not experienced in which price discrimination seems to be a bigger problem and more controversial.

One market with an interesting advantage in its ability to use price discrimination is the grocery market. Because of coupons, sales, and lots of competition, the price elasticity of demand for many grocery products is relatively high in terms of where shoppers choose to buy. In order to save money, many people go to several different stores for certain products that are cheaper or on sale. If I were the price discriminating economic adviser for a firm such as Aldi, I would work to install a rewards program to charge loyal, long-time customers less than newer shoppers to encourage continual shopping. This form of price discrimination would work well because it would make customers feel good about getting a better deal by continuing to shop at Aldi, and new shoppers would not feel as discriminated against as other forms of price discrimination. In addition, I would include sales on products that are bought in bulk in order to increase revenue and encourage new customers to take advantage. I believe these schemes will increase overall profit because I am taking advantage of the elasticity of grocery goods by increasing demand by driving prices down with sales. I am also keeping the customers I have through the rewards program, and by charging those shoppers less than occasional customers, I will influence their willingness to buy and product-purchasing behavior, which will result in an increase in revenue and profit.

 

Bibliography

Lands, Luke. “Individualized Coupons Aid Price Discrimination.” Forbes. Forbes Magazine, n.d. Web. 12 Feb. 2016.

Rational or Irrational?

I would like to believe that every choice I make is rational, to feel that I am capable of always making conscious decisions that make the most logical sense in terms of my benefit or the benefit of my friends and family. And from my perspective, most of the time I do behave rationally. However, when comparing my idea of rational behavior to the actual definition and standard of rationality, the difference is definitely distinguishable. I blame a lot of my irrational behavior on preference. For example, my choice to continue bringing my own lunch to school even though school lunch has been made free for all students. It makes more logical sense for me to stop buying food and making it into a lunch to bring to school every day and start taking advantage of the free lunch, but I choose not to because I prefer my food over the school lunch food. However, when preference is not as much of a factor, I tend to behave more rationally, as I have limited my vending machine food consumption at school since they have raised the price for snacks from $1 to $1.25.

My examples of rational and irrational behavior are easily applicable to Tim Harford’s definition of rationality in The Logic of Life. In this book, rational behavior is defined as logical human response to incentives, while irrational behavior is defined as illogical human response to incentives, or even a lack of a response. In my case, this would mean that because the incentive for me to buy snacks from the vending machine at school became lower after an increase in the price of snacks, my response of not buying as many snacks would be deemed rational behavior. This would also mean that my choice to continue bringing my own lunch even after school lunch became free would be considered irrational with Harford’s definition because I did not respond to the incentive of free lunch. Another definition of rationality that my behavior could be applied to is Dan Ariely’s definition. His definition of rational behavior is when people make the rational choice without being distracted by the simplicity or comparative superiority of the irrational decision. This applies to both of my examples of behavior, as I made the rational decision to respond to a higher price of snacks, but made the simple decision to not respond to the installation of the free lunches and carry on with my routine.

While Ariely does make the successful argument that irrational behavior is predictable and makes analytical sense, I do not believe that we should completely disregard the utility of the assumption of rationality. In many situations the assumption that people will behave rationally still works because people tend to act rationally a lot of the time. Ariely’s analysis of the predictability of irrationality cannot apply to every possible situation, which is why we need to sometimes assume rationality, and sometimes assume irrationality, when that irrationality can be predicted. This predictability comes with a certain illusory trait of the irrational choices that people can make, and so when this trait is present, it is a good idea to expect people to make that irrational decision. However, when there is no good reason to believe multiple people will make an irrational decision because of a common factor, it is best to assume rationality in order to achieve a simpler analysis.

 

 

Bibliography

Harford, T. (2008). The logic of life: The rational economics of an irrational world. New York: Random House.

Ariely, D. (2008). Predictably irrational: The hidden forces that shape our decisions. New York, N.Y.: HarperCollins.

Ariely, D. (Writer). (2008, December 1). Dan Ariely: Are we in control of our own decisions? [Video series episode]. In Ted Talks. Ted.

Blog Post Minimum Wage

I believe that the national minimum wage should be raised from $7.25 per hour to $9 an hour slowly over several years, as suggested by President Obama and supported by Paul Krugman’s Raise that Wage. While this change may result in some low-wage workers getting laid off, I do not believe it would outweigh the benefits of raising the wage by $1.75. I think that because inflation is causing the prices of many products to rise, people making minimum wage are having a harder time getting by, so an increase in the wage should happen, in one way or another. I believe that this increase should happen slowly because it gives companies that hire minimum wage workers, especially small businesses, more time to develop an action plan to make sure that their business continues to make a steady profit, hopefully not at the expense of the employment of the people working for them.

I also believe this method of increasing the minimum wage will be effective because it will be beneficial to both the workers and the companies they work for because it is a balance between extremes. According to the article The Fight for $15 by Reihan Salam, roughly 75% of Americans believe that minimum wage should be increased to $12.50, while it seems that many businesses agree that a wage of $12.50/hour is too generous, so $9/hour seems to be a good compromise. The article also goes into detail about how many minimum wage employees in America are working towards a minimum wage of $15, which the author and I agree is much too high and would have sever consequences on the economy. Most companies in America are much more capable of providing a wage of $9/hour than $15/hour, and even though employees may want more than $9, the risk of unemployment and other negative effects on the economy cannot be ignored, so the minimum wage should not change that drastically.

Paul Huetteman Article Response #1

Article title: The Decline of ‘Big Soda’

Article source and date: The New York Times, October 2, 2015

Economic topic (and chapter): Supply and Demand, Substitutes. Chapter 3

What is the article about?  Briefly summarize the issues in a non-technical way.

The article discusses the decline in soft drinks being purchased in America over the past decade, and why this shift in demand has been occurring. The decline has been attributed to anti-obesity campaigns, government attempts to tax soda, and a general public awareness of the unhealthiness of the sweet beverage. The article uses Philadelphia as an example, as the mayor, with the support of the public, has made attempts to make the city healthier by banning the sale of soft drinks in the Philadelphia school district, as well as limiting its presence in vending machines. The article analyzes the effect this trend has had on business throughout the country, as well as what may happen if this pattern continues.

What are the economics of the article?  How does a recent topic covered in the course explain the subject matter of the article?

The subject of this article is a good demonstration of a shift in the demand curve for a good, in this case, carbonated soft drinks. I believe the shift can be categorized in “Tastes, Preferences and Information,” as the change seems to be mostly due to rising health campaigns and the understanding that soda is a large contributor to the obesity epidemic in the United States. The article also mentions a substitute, bottled water, for which sales have increased sharply while the sale of soda has declined significantly. Both shifts in demand curves and substitutes are important factors of the Supply and Demand economic concept discussed in Chapter 3.

How does your graph show the economic concepts seen in the article?

The first part of my graph demonstrates how the demand for soft drinks in America has shifted to the left over time, meaning that the demand for the product as a whole has been decreasing. The second part of my graph demonstrates how the demand for bottled water in America has shifted to the right over time, meaning that the demand for this product as a whole, a substitute for soft drinks has been increasing in recent years.

Citation

Katz, Margot Sanger. (2015, October 2). The Decline of ‘Big Soda.’ Retrieved from http://www.nytimes.com/2015/10/04/upshot/soda-industry-struggles-as-consumer-tastes-change.html

(2015, July 17). Can Craft Sodas Add Fizz to Slumping Beverage Industry? Retrieved from http://www.cbsnews.com/news/can-craft-sodas-add-fizz-to-slumping-beverage-industry/

The Boomerang Effect Blog Post Paul Huetteman

I see the Boomerang Effect in the Chinese Labor Article in the way that in the past, China and other countries in Eastern Asia have been well known to American companies as countries that are ideal for commodity production because of low labor costs. But now, with rising labor and shipping costs, as well as increasing operation risks, more companies are making the decision to produce in America rather than overseas, as China and other countries popularly used for production have lost their comparative advantage over America. It seems to me that China still has absolute advantage over the United States when it comes down strictly to labor costs, but because they have been rising so quickly in recent  years, it is no longer worth while for American companies to sacrifice efficiency for a smaller gap in labor cost, leading production from American companies to slowly come back to the States, similar to the motion of a boomerang.

Last Friday, it was discovered by U.S. regulators that Volkswagen scandalously programmed 500,000 automobiles sold in the United States and 11 million vehicles worldwide with software that manipulated emissions tests on the vehicles, essentially producing cars that emit levels of harmful exhaust beyond the legal limit on the road, but producing them to appear as though they are within the limit when tested by emission testing equipment. A massive recall by Volkswagen is currently in place, costing the company billions of dollars. As the company is a major corporation based in Germany, naturally, the German economy is taking a substantial hit, as Volkswagen stocks have dropped significantly in value. As one of Germany’s major automobile manufacturers, this considerably lowers Germany’s absolute and comparative advantages when it comes to producing motor vehicles. While this is not as large-scale of a change as increasing labor costs in China, which affects multiple markets, I predict that sales in Volkswagen vehicles will drop substantially over the next several years, essentially making this a larger change in the global automobile industry, a larger change in the global economy, and also a larger shift in the comparative advantage of Germany and other major automobile production companies in the future.

Driven to Kill Reaction Blog Post Paul Huetteman

The problem in the article is the fact that Taiwanese and Chinese drivers have been taking advantage of the fact that it is economically more beneficial for them to run over and kill a pedestrian with their vehicle rather than only injuring them. This has lead to cases involving drivers accidentally running over a pedestrian, perhaps only injuring them slightly, but then proceeding to run over the person several times to insure that they are dead, in order to reduce the money that they will have to pay to compensate the person they ran over. Individuals are to blame in the sense that the individuals who have chosen to murder these people have done so and have not only reduced the cost of paying for the victim’s medical care bill, but have also, in many cases, not been convicted of murder, and instead are fined or have to serve a short term for “negligence,” essentially proving that people can continue this trend and not be held responsible for their actions. I think that the large group of people who share this mindset should have the blame because there would not be so many cases of this happening unless a lot of people believe that killing pedestrians that they hit is worth the reduced monetary cost. These individuals that choose to kill these pedestrians are cruel because they value their money more than the lives of strangers by enough that they would rather murder them than pay them the money that they owe them to recover. There is a systematic problem in China, as the consequences for “double hit cases” are not nearly as substantial as they need to be, but that does not mean that individuals are not being cruel by taking advantage. China should change the incentive for people to do this by increasing the punishment for deliberately running over a person multiple times by treating it the same way as 1st degree murder and increasing the conviction rate of guilty offenders. Also, the burial fee should be increased significantly in order to make sure drivers stop intentionally killing pedestrians.

There are many flawed incentive systems in the United States that are similar to the flawed system in China. One such flawed system is speed limits put in place on highway roads and expressways. Because of the scarcity of police officers on highway shoulders enforcing the speed limit as well as the lack of speed cameras on highways, a large amount of  American drivers tend to drive up to 20 miles per hour faster than the speed limit most of the time they are on the highway. This has become such a popular trend in the United States that people are often honked at and passed by other drivers if they are driving the speed limit in any lane other than the slow lane. While this is not as serious as the China phenomenon discussed in the article, this does contribute to a lot of accidents on the highway, as many of the drivers who drive above the speed limit significantly tend to be less careful and more reckless. Solutions to this problem may include increasing the number of officers on the shoulders, installing cameras on highway roads, increasing the fine for speeding tickets, and making campaign commercials to make the American public feel more guilty about speeding and understand the dangers behind it.

HeLa Book Blog Page by Paul Huetteman

Blog Entry 1: Part 3 Ch. 23-30 (Non-Science)

Chapters 23-30 of “The Immortal Life of Henrietta Lacks” was very interesting to read because of the impact Henrietta had on the doctors and people who had known her while she was alive and the effect she left on the world once her cells began being used to help find vaccines for diseases and help doctors make new discoveries. Reading about the importance of her legacy was very humbling, as these final chapters regarded Henrietta Lacks as such a monumental part of the cell research community today. I was also intrigued by the events that happened to Henrietta’s family in chapters such as Ch. 30.

The devastating discovery the Lacks family made about Henrietta’s harvested cells 25 years after her death was unacceptable. It could have been easily avoided if the doctors had asked the family for permission, and I believe that it was their responsibility to do so. By failing to respect their patient, John Hopkins and the other researchers in the institutions wronged Henrietta and as a result caused her family a lot of grief. While Henrietta was not always forthcoming to her family in terms of discussing her medical situation, the doctors did not tell her they were taking her cells and it was their responsibility to discuss these details with her and her family.

Blog Entry 2: Part 3: Ch. 31-38 (Science)

Chapters 31-38 of “The Immortal Life of Henrietta Lacks” was very interesting to read because of the significance of Henrietta’s cells in the world once her cells began being used to understand biological mysteries. Her cells were revolutionary in the science community, and her sacrifice, though she was ignorant of its occurrence, helped improve biological research and has made part of the life research community what it is today. Chapter 32 did a great job of demonstrating the essence of what made the HeLa cells so incredible.

The scientists discovered that Henrietta’s cells were immortal because of the combination of the existence of HPV-18 and non-shortening chromosomes within the HeLa cells. Because of the trait of rapid multiplication in the protein HPV-18 and the power the cells have by not having limited chromosomes and by having these active enzymes that can allow the cells to stay alive through thick and thin and not die. The immortality of these cells is incredible, as they not only refuse to die, but they are much more able to withstand deadly cell-killers that would cause any normal cell to perish.

Research C: How does the fact that the HeLa cells are deadly cancer cells dictate the things scientists can do with them?

While the fact that the HeLa cells were cervical cancer cells are a huge part of the reason they are considered immortal, scientists are also limited in some ways by the nature of the HeLa cells, especially because of their cancerous status. An example of this lies in the fact that scientists have been forced to leave most of the genomic architecture of the HeLa cells unexplored because of the mutation of the cell and the fact that any given cell may not have the correct number of chromosomes in the nucleus. This makes it difficult to analyze the genomic architecture, creating a barrier between scientists and more information about the DNA structure of the HeLa cells.

Citation: Adey, Andrew. “The Haplotype-resolved Genome and Epigenome of the Aneuploid HeLa Cancer Cell Line.” Nature. N.p., 29 Nov. 2012. Web. 18 Dec. 2014. <http://www.nature.com/nature/journal/v500/n7461/full/nature12064.html&gt;

HeLa Book Blog Page by Paul Huetteman

Blog Entry 1: Part 2 Ch. 12-17

Chapters 12-17 of “The Immortal Life of Henrietta Lacks” was quite difficult for me to read because of how the doctors and scientists were treating Henrietta Lacks. They seemed to regard her as more of a guinea pig than a human being with a serious and life-threatening condition. They unfairly took advantage of her and used her for their own advantages and benefits; showing less mutual respect for her than she deserved. Although I do understand that the doctors were planning on using these cells for research and to help other patients in the future, they should have shifted their focus to helping Lacks live rather than continue the research on the HeLa cells while her life was in danger. But because they didn’t, Henrietta did not survive and they may have been able to save her had they been more focused on her health rather than her cells. Dr. Chester Southram, for example, in Ch. 17 seemed to view Lacks as a heap of cells rather than a person.

Dr. George Gey most likely wanted to protect Henrietta’s identity because he wanted to continue his work with her cells and he knew that if word got out that he had been taking cells from her cervix before her death, then people would start to wonder about the morality of the doctors working with her as well as the morality of using the HeLa cells as a whole. In an attempt to conceal his controversial actions, he did not release Henrietta’s real name to the public in order to keep the public knowledge of the patient at a minimum. He may have helped provide a green light for doctors and medical researchers to push forward with the power of the HeLa cells, but at what cost?

Blog Entry 2: Part 2 Ch. 18-22

Chapters 18-22 of “The Immortal Life of Henrietta Lacks” was very sad to read because of how it describes Henrietta’s children as lost without the guidance of their dead mother. Her family is misinformed about her and they are angry at the fact that while doctors and readers are recognizing her “donation” of the HeLa cells as a brave “sacrifice,” she did not willingly give up her cells, as samples were taken without her knowledge. On top of all that, the family cannot benefit from the use of the HeLa cells because they do not have health insurance. When such an exploitation takes place as this, and the family of the victim is not entitled to any form of welfare or assistance, the family can become very unstable, which is what happened with several of Henrietta’s children, as described in chapter 19 of the book.

I wholeheartedly believe that Henrietta Lacks was wronged by being taken advantage of as her role as a patient, and that the extraction of her cells for use in experimentation was in violation of her rights as an American. While it is true that Lacks had no health insurance and still received treatment, it is not fair for her “doctors” to use her body for research without her consent. And in other cases similar to this one, the rights of the individual absolutely outweigh the needs of society. Especially since in this case and most others similar to it there is no immediate large-scale threat that requires the use of such hasty and extreme action. The world, in Henrietta’s time, was not in absolute desperation for the HeLa cells, but doctors disregarded the rights of the patient anyway. Every human has a right to their body and that right needs to be respected. Unless a patient genuinely wants to donate their body to a cause, they shouldn’t feel obligated to and definitely should never be tricked or manipulated into doing so.

Research B: What is so genetically unique about the HeLa cells that allow them to live forever and continue to grow?

Over the decades, doctors have tried to answer this question with various tests and experiments designed to garner a better understanding of the uniqueness of the HeLa cells. They have not been able to provide a sufficing answer, but they have discovered clues as to why the cells are so distinctive and extraordinary. One of the most important of these details marking the difference between HeLa cells and normal cells is the fact that HeLa cells contain HPV-18, a protein that causes cells to multiply at a rapid pace. This is part of the reason Henrietta’s cancer was such a problem for her and also why her cells are able to grow and divide so easily. Also, the chromosomes in the HeLa cells do not shorten when cell division occurs, and while normal cells can only be multiplied a few times before they die because of this, HeLa cells, because of an active enzyme in the cell that keep the chromosome ends from shortening  do not have this problem, and the cells can stay alive for virtually an infinite length of time and can withstand being divided over and over again.

Citation:

Watson, Denise M. “Cancer Cells Killed Henrietta Lacks – Then Made Her Immortal.” The Virginian-Pilot. N.p., 10 May 2010. Web. 07 Dec. 2014. <http://hamptonroads.com/2010/05/cancer-cells-killed-henrietta-lacks-then-made-her-immortal&gt;