30 January 2011

"Seinfeld" in economics

Princeton econ prof Avinash Dixit's paper "An Option Value Problem from Seinfeld" is a treatment of Elaine's quandary in Episode 119 ("The Sponge") as an option pricing problem. When Elaine's contraceptive of choice goes off the market, she has only a finite supply remaining and she has to become much more, uh, judicious in her use of them. It's a case of "Investment Under Uncertainty" (Dixit's much more voluminous work on the subject).

There's a WSJ article about the paper. If you like this kind of stuff, there's a bit more in the same vein (though with less in-depth discussion) at Yada Yada Yada Econ (The Economics of Seinfeld).

I consider "Seinfeld" to be one of the better products of the 1990s, so it's awesome that it still gets talked about. Moreover it doesn't surprise me at all that there is so much econ content in a show that is ostensibly about "nothing". Econ is everywhere.

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