This week a huge debate has sprung up over the color of “The Dress.” The item in question is a two-toned sleeveless dress sold by an English clothing chain called Roman Originals. Over the last few days many people have had furious debates over whether the dress is gold and white OR black and blue. Even the Wall Street Journal, a staid conservative publication devoted primarily to business, devoted more than a half-page to the debate over “The Dress’s” color this weekend. For an economist, however, “The Dress” is really amazing because of its price.
Tipping is widespread across North America. People tip taxicab drivers, hair dressers and hotel doormen. However, the place where the most people tip is in restaurants and bars. The problem for many customers is that tipping is confusing since tipping rules are not clear and payments are arbitrary. Many people agree the “standard” tip is 15%. However, on what amount do you tip 15%? Is it the total bill? Is it the total bill excluding tax? Is it the total food bill, with expensive bottles of wine tipped at a separate rate? Many people agree the tip rate for large groups should often be higher, but how many people comprise a “large” group? Most importantly, tipping means doing math, which is a difficult task for some people and a challenging task after drinking alcohol in a bar or restaurant. Continue reading
Can someone please explain the “Exploding Kittens” fad? Exploding Kittens is one of Kickstarter’s most successful campaigns. There are 3 days left to go and the company has raised about $6.5 million. What does the company plan to do? They expect to sell a deck of playing cards. With the deck you play a straightforward game that ends when someone draws from the deck a card with a picture of an exploding cat. Continue reading
Financial advisers and the media (e.g. Time and NY Times) suggest the typical person should have 3 months of income saved in case of emergency. Emergency funds are important because people without these savings have no fall back when an unexpected bill, reduction in income or incredible opportunity arises. While having emergency savings is a good idea, relatively few people have this backup. Why don’t more people reduce their financial risk and put money aside? Continue reading