Thursday, November 29, 2018

Another Economics Joke

I have a very small collection of economics jokes, not jokes about economics but jokes that teach economics. It just occurred to me that there is another I should add:

An economics professor is in a car driven by one of his students; she asks him to put on his seat belt.

"Why do you want me to put on my seat belt?"

"To make it less likely that you will be injured in an accident."

"Then why don't you take yours off?"

I got this one from Allen Sanderson, who teaches introductory economics at Chicago. It may, for all I know, be a true story.


blink said...

Delightful! Thanks for sharing this.

Justinw303 said...

I don’t think I get it...

Austin Bitter said...

@Justin Wilson If I'm not mistaken the point is the economics teacher wants the student to take the seatbelt off so the consequences of an accident are higher so there is more incentive to not get in an accident.

David Friedman said...

Yes. Taking the seatbelt off increases the cost of an accident to her. If she is making a rational tradeoff between risks and other things, such as getting where she is going faster, raising the cost of an accident will result in her driving more carefully, which will reduce the risk to the passenger.

Gorgasal said...

I do like the joke. (Anyone who does not get it should google "steering wheel spike" for a Learning Experience.)

The problem is that it's completely unclear who "she" and "he" refers to. I had to spend more mental capacity in sorting this out than in enjoying the joke. Which is not how a joke should be processed.

(Of course, one could go with one's priors: it's a priori far more likely that the guy is the professor than the other way around. But we all don't want to do that, right?)

SB said...

It took me a moment to figure out what the professor was talking about, and I still don't think he has much of a point. If the student's only concern were the professor's safety, and her own driving were the determining factor in all accidents, then taking off her own seatbelt would help, possibly-but-not-obviously as much as him putting on his.

More realistically, she's also concerned with her own safety and with getting where she's going faster, and taking off her own seatbelt impedes both of those goals. Furthermore, they could easily get into an accident through no fault of her own, and either of them taking off their seatbelts is entirely counterproductive in that scenario. (My grandparents were killed when somebody else ran a red light and T-boned their car in the middle of an intersection.)

Still, if the point of an economics joke is to inspire thought about all these issues, it works.

I also agree that the gendered pronouns took a moment to assign correctly. How about assigning names: Sandy and Professor Econ, or something like that?

LH said...

That is a really good one.

She should have replied, "To make it less likely that you will be injured in an accident, ceteris paribus."

SB said...

It strikes me that there are (at least) two very different ways to analyze this situation: globally and locally.

If we assume that the professor's safety is a shared goal of both student and professor, then what's the most efficient way to achieve it? The professor putting on a seatbelt is almost certainly more effective towards that goal than the student/driver removing a seatbelt, and comes at considerably less opportunity cost.

OTOH, if we reason purely as individuals, and the driver's options for achieving her goals are limited to changes in her own behavior, then removing her seatbelt is perhaps the best she can do (other than the "behavior" of trying to convince her passenger to change his behavior).

In this case, I think there's some real merit to central planning :-)