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One of the standout features of Price Theory and Applications is the rich and diverse selection of "Examples" provided. These show how economic analysis can be applied to a wide variety of problems and situations. Most of these are based on research published in economic journals, but all of them show that economics is much more than a dry theoretical study.

To see samples of these, you may follow these links:

Mixed Strategies in Tennis shows that successful tennis champions apply strategies that can be predicted by game theory

Adverse Selection in Dental Insurance provides evidence that people with poor teeth or who are more concerned about their teeth tend to seek dental insurance

A listing of all of the examples in Price Theory and Applications is provided below, with a brief synopsis of each...

Chapter 1- The Nature and Scope of Economics
The Ecologist, the Economist, and the Statistician compares the predictive power of economics with the (often more popular) activity of doom-sayers

Earnings of Male College Graduates, by Field compares earnings prospects of several fields of study

Rational Drivers? indicates that drivers with safer cars tend to be more aggressive, demonstrating incentives and secondary effects

Rational Malingering? higher disability payments lengthen time spent on disability

“Irrational Exuberance” examines whether stock prices accurately reflect earning potential

Selfish Economics Students? shows that, compared with non-economics students, economics students are more aware that they sometimes act selfishly, but may actually be less likely to act in selfish ways

Selfish Economics Profs? shows that economists might be as honest as other professionals, even to their own cost

Crime as an Economic Choice – “Three Strikes” provides evidence that punishment deters crime

Bidding for Faculty Offices raises the issue of which goods society believes should be traded in a market.

When Do Economists Disagree? provides evidence that economists agree on positive issues, but differ on normative ones

Chapter 2- Working Tools

Scarcity and Prices in Medieval Winchester shows that, even long ago, reductions in supply led to higher prices

Potatoes/Dry Beans versus Strawberries shows how harvest times change the relative price of produce

Baby Booms, Marriage Squeezes, and Women in the Labor Force posits that women born in particular eras find the "supply" of men who are marrying age to be low, thus changing the career paths of the women

Dowries shows that paying a price to obtain a good husband is related to (broadly-defined) supply and demand

Beer Taxes and Drinking by High School Students shows that taxes can discourage consumption

Postwar Shortages and Trekking shows how price ceilings create black markets

Agricultural Price Supports shows the effect of maintaining price floors and alternatives

Professors and Publications shows that the impact of publications on a professor's salary diminishes as more articles are published

The Oil Entitlement Program shows the unintended consequences of reimbursing the use of a resource, effectively encouraging its greater use.

Taxes demonstrates the correct interpretation of marginal tax rates

Foraging Choices compares the opportunity cost of foods (in terms of other foods foregone) in a primitive society

Chapter 3-Utility and Preference

Transitivity and Age shows that transitivity of preferences may be learned

Income and Happiness? shows the marginal utility of income is positive, but exhibits diminishing returns

Preferences for Brides among the Kipsigis shows that bridal prices make some economic sense (early-maturing women command a premium)

Cultures and Preferences shows that convexity of preferences may vary with income

Charity and Income shows that charity is a normal good

Are Stepmothers Wicked? shows that parents tend to spend less in support for non-biological children

Legacies shows gender differences in how estates are divided between spouses and children and discusses the possible reasons

Modern Art and the Taste for Innovation shows that maturity or novelty may have different value at different times

Chapter 4 -Consumption and Demand

Smart Ants demonstrates that ants show diminishing marginal utility and respond to changes in marginal cost

Prisoners of War: Tea versus Coffee shows that markets function even in places like prison camps

Rats shows that even rats respond in predictable ways to changes in income and price ratios

How Much Are Christmas Gifts Worth? shows that gifts have a lower value to their recipient than their money cost

Luxuries versus Necessities in a P.O.W. Camp shows the effect of income changes on consumption patterns

Was Bread a Giffen Good? gives historical evidence of consumption changes as a result of income changes (bread is shown to be normal superior good)

But Do Vouchers Really Help? shows that giving vouchers to some consumers may raise prices for other consumers

Chapter 5-Applications and Extensions of Demand Theory

Income Elasticities in New Zealand compares income elasticities for various categories of goods

The Demand for Opium shows inelastic demand is estimated for drugs

College Students’ Demand for Cigarettes shows that overall price elasticity of demand is determined both by changes in the number of consumers and changes in the amount consumed by each consume

Demand Elasticities for Pharmaceuticals compares elasticity of demand for generic and brand name medicines

Demand for Coffee shows that the demand elasticity for instant coffee and ground coffee have different characteristics

Wartime Point Rationing how (non-money price) rationing changes the income elasticity of goods

Gasoline and Waiting Time shows that non-money prices, such as time costs, affect consumption

Chapter 6-The Business Firm

Mergers and Takeovers shows how takeovers of various kinds affect shock prices

Takeover Defenses, Corporate Governance, and Stock Prices shows that anti-takeover provisions harm stockholders

CEO Compensation shows a correlation between firm success and CEO pay

Scale Economies in Electric Power Distribution gives evidence of economies of scale

Scale Economies – Nuclear versus Fossil Fuels shows the minimum average cost of both kinds of power

Peak versus Off-Peak Operation: Water Supply compares seasonal costs of supplying water relative to demand

Chapter 7-Equilibrium in the Product Market – Competitive Industry

Cotton Spindles shows short-run and long-run supply responses to demand change in different regions

Economies of Scale and the Survivor Principle examines economies of scale in physicians' medical firms

Lotto and Consumer Surplus shows that lottery ticket buyers would be willing to pay more for the ticket than they do

Import Quotas estimates the deadweight loss of import quotas in the U.S.

Two San Francisco Housing Crises compares the effect of massive supply reduction (due to earthquake) to price ceilings

Inefficient Housing Allocation in New York City shows that rent control affects the amount of space occupied by tenants (not just the number of housing units occupied)

Repressed Inflation in Postwar Germany demonstrates that price controls can remove functionality of money

Chapter 8- Monopolies, Cartels, and Networks

Potential Entry in Monopoly Airline Markets provides evidence that potential competition affects prices

Racetrack Betting shows that tax revenues collected on betting are related to elasticity

Long-Distance Telephone Service some discussion of long distance regulation and competition

Paperbacks versus Hardbacks evidence of price discrimination based on elasticity differences

Peanuts discussion of government policy leading to cartel formation

Antitrust and Prices examines the evidence concerning cartels in the U.S.

The OPEC discussion and history of the oil cartel

QWERTY as Inefficient Lock-in? surveys the issue of an inefficient system being perpetuated due to costs of change (evidence seems to refute the QWERTY claim)

Chapter 9-Product Quality and Variety

Used-Car Prices surveys the relative fall in automobile values across different classes of vehicle and posits explanations for the differences

Price and Quality: Shopping Hours in Quebec shows that the price of the same item rises when stores offer higher quality service (in the form of longer shopping hours)

The Japanese Auto Export Cartel explains why the unintended consequence of U.S. auto import restrictions was the formation of a Japanese automobile cartel, and why quality competition between Japanese auto makers was another result

Religion: The Value of Variety extends the analysis of monopoly and market concentration to religious worship attendance

Advertising and Competition provides evidence that advertising lowers prices (due to the resulting changes in demand elasticity)

Customization in the U.S. Economy provides evidence that style and model product diversity is increasing

Chapter 10-Competition Among the Few: Oligopoly and Strategic Behavior

Mixed Strategies in Tennis shows that successful tennis champions apply strategies that can be predicted by game theory SEE THIS EXAMPLE

Pioneer Oligopoly Experiment shows that experimental subjects in an oligopoly game tend to choose Nash-Cournot solutions over collusion or competition

Standard Oil and John D. Rockefeller gives evidence that Standard Oil's takeover of smaller firms was due to its influence with railroads rather than its threats of predatory pricing

Oligopoly and Price Rigidity demonstrates that newspaper prices in oligopoly markets change less frequently than prices in monopoly markets

Concentration and Market Prices in Sweden shows that competition leads to generally lower retail prices for food

Chapter 11- Dealing with Uncertainty – The Economics of Risk and Information

Risk Aversion and Executive Stock Options shows that, when risk is considered, stock options awarded as compensation to executives have a lower actual value than might appear if risk is ignored

Adverse Selection in Dental Insurance provides evidence that people with poor teeth or who are more concerned about their teeth tend to seek dental insurance SEE THIS EXAMPLE

Racehorses Can Be Lemons shows that the prices of racehorses, the quality of which is difficult to determine, is affected by the willingness of the seller to have the quality verified by a third party

Restaurant Hygiene demonstrates that low-cost information about restaurant hygiene tends to increase hygiene over time

Fads and Cascades in Television Programming shows that television networks use each other's schedules as low-cost sources of information about viewers' preferences

The Napster Story provides a brief history of intellectual property rights enforcement in the recording industry

Pharmaceuticals – Creation versus Utilization provides an estimate of the benefits that drug patents produce in terms of increased research and development

Chapter 12-The Demand for Factor Services

New Mexico Onions shows a production function estimated using water as a factor of production

The Price of Rice and the Price of Slaves shows that the value of the marginal product affects the price of labor (rice was the product of slave labor in North Carolina)

Missouri Corn shows derivation of actual production function using as two factors are varied

Agricultural Production in Canada a Cobb-Douglas production function shows differences in relative productivity growth of resources across geographic regions

The Black Death shows the effect of reduced labor supply on the use of land

Monopsony in Professional Baseball compares marginal revenue product of star players to their salaries

Do Minimum-Wage Laws Reduce Employment? surveys some evidence

Chapter 13-Resource Supply and Factor-Market Equilibrium

Who Does the Housework? shows that men generally spend less time doing housework than women, regardless of marital status or job status, and offers explanations

Nursing Services: “Backward-Bending” Supply? shows that the supply of female nursing labor is backward-bending and dependent on such factors as the nurse's husband's income

Retirement Decisions shows that labor force participation rates for older workers fell for several decades after the creation of the Social Security system, but have risen as concerns about its viability have surfaced

Footraces and Effort shows that performance in athletic events is affected by the size of financial prizes

Employee Compensation at Safelite shows that output and employee pay both rise when rewards are based on output rather than input (hours worked), and that costs also fall when worker output is rewarded

Signals and Handicaps gives examples of costly signalling in nature and human courtship, and explains economically why they work

Scientists provides evidence for lower salaries at scientific jobs allowing more research freedom, and explains the differentials

Rising Wage-Rate Inequality shows that wages are increasing over time for high-wage jobs, while wages are decreasing for low-wage jobs, and offers possible explanations

Unionization in the Private and Public Sectors shows that union membership is falling in the private sector, but rising in the public sector, and offers possible explanations

Income Sources of the Wealthy in Britain discusses why income to the wealthy is increasingly a result of labor income rather than land rent or investment interest

Capital in the Slave-Owning South – Compensated Emancipation? examines whether the Civil War was more costly than the government purchasing and freeing all the slaves

Chapter 14-Exchange, Transaction Costs, and Money

Jefferson’s Trade Embargo gives evidence that preventing trade with Great Britain in 1808-9 reduced the U.S.GDP

Economic Blockade and the American Civil War discusses how the Confederacy's trade restrictions were counterproductive to their cause

A Market Experiment Using a Computerized Supply-Demand Process shows that experiments produce results in which "market" equilibrium prices are reached quite quickly

Animal Robinson Crusoes applies consumption and production analysis to animals

Regional Specialization in the United States gives examples of U.S. regional productive specialization and evidence that it is decreasing over time

Costs of Trading – NYSE versus NASDAQ offers evidence that NYSE trades are more efficient than NASDAQ trades and gives possible explanations

Home Ownership and Unemployment explains the evidence that home ownership leads to greater unemployment using the concept of transactions costs

Bidding for the Radio Spectrum discusses alternative methods for distributing rights to a valuable resource

eBay versus Amazon – Sniping shows that different bidding rules lead to different amounts of "last minute" bidding in online auctions, and explains why the effect depends on the category of good being traded

Chapter 15- The Economics of Time

Scholarships and Savings shows the effect of means-testing scholarships on family savings

Growth versus Investment: International Comparisons offers evidence that saving leads to economic growth

Is Social Security a Good Deal? shows the payoff of Social Security as an investment for various age groups

Interrupted Careers and the Discounted Value of Knowledge compares the cost of interrupting a career in various fields, and relates the costs to fields women tend to enter

Rate of Return to Education – International Comparisons shows that the rate of return to education differs greatly in different regions of the world, and offers caveats in making such comparisons

Real and Monetary Rates of Interest in the United Kingdom provides empirical evidence for the "Fisher hypothesis"

Nominal and Real Yields, 1926–2002 shows that risk indeed increases return and also discusses the impact that taxes have on the conclusion

Art Appreciation shows that the rate of return on art as a financial investment is lower than would be justified solely based on factors such as risk, and posits that some of the returns are non-pecuniary

Chapter 16- Welfare Economics: The Market and the State

Efficiency versus Equity in “Ultimatum Game” Experiments experiments conducted in different countries show that people are willing to sacrifice income to avoid being treated inequitably

The Marginal Excess Burden of Taxation in the United Kingdom compares the excess burden for taxes on various kinds of transactions, and finds great differences between goods

More on “Sin Taxes” estimates the externality produced by use of items such as tobacco, and compares the externality to the taxes placed on consumers of such items

Smog provides real-world examples of the efficiencies created when pollution licenses are traded, and also examines some of the real-world obstacles to such trades

The Coase Theorem and Shopping Mall examines the positive externality of high-visibility "anchor stores" in regional malls

The Fishery as a Commons – Successful Restriction of Access shows that a system of quotas can reduce the tendency to over-utilize a common resource

Alliances: Weakest-Link or Best-Shot? examines the public-good nature of military alliances

Rent-Seeking in State Capitals examines whether businesses that gain from rent-seeking also tend to choose locations in or near state capitals to facilitate such rent-seeking

Chapter 17-Government, Politics, and Conflict

Corruption and Growth – International Comparison presents evidence that corruption hurts economic growth

What Happened When Women Got the Vote? shows that women, on average, favor larger-scale government activity more than men do

Tort Awards – In-State versus Out-of-State shows that courts have a large bias against out-of-state defendants

Government Aid to Agriculture – Productive or Redistributive? provides evidence that the kind of subsidies given to agricultural producers varied with the elasticity of the product as well as how much of the producers' income the subsidy comprised

Determinants of Voter Turnout illustrates that differences in the participation rate seem consistent with the canons of rationality

Log-Rolling in the U.S. Congress describes how agricultural interests get support from urban interests by merging their respective legislation

The Median Voter and Party Politics shows that the median-voter theorem is most evident when each political party has some influence on government actions, more or less in proportion to its support in the electorate

The Rationality of Going to War provides evidence that more pessimistic expectations of victory do indeed make leaders less inclined to go to war

Raid or Trade? estimates the value of payments made to Native Americans by the U.S. government for their territories, and discusses the relative costs of territorial battles

A Litigation Explosion? quantifies the increases in the number of lawyers compared with other professions in recent years

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