Source: The Undercover Economist http://blogs.ft.com/undercover/2008/03/dear-economist-why-does-a-twinpack-of-milkyway-cost-more-than-two-singles/

Dear Economist,
A single Milky Way costs 20p in my local corner shop. A twin pack costs 47p. I’ve made a habit of checking the prices in other shops and a twin pack invariably costs more than two singles. What could be the cause of this apparent madness? The madness in pricing, that is, not the madness of a twenty-something compulsively checking the price of children’s sweets.
Kendrick Curtis, via e-mail

Dear Kendrick,

I am composing this reply overseas, far from the British corner shops where I can check your story, but what you say rings true. In my own travels around shops with a clipboard – a sure way to make the staff twitchy – I have often discovered products with an unexpected mark-up. One example was the medium-sized pack of washing powder priced at rather more per 100g than the small or the large.

All shops want to offer competitive prices to customers who demand them, while charging more to customers who do not much care. Random mark-ups will do the trick: they are easily avoided by bargain hunters but will often snare the unwary.

You are right that it does feel mad for a twenty-something to check the price of children’s sweets; that is why the pricing you describe is clever. I am confident that many adults do not consider the price of confectionery, and that most children do. If I am right, the mark-up on a twin pack is likely to be aimed with pinpoint accuracy at greedy, careless grownups. The children will find the cheaper deal – if they want two Milky Ways, they can buy two singles. Adults, their wallets overstuffed and the days of saving for penny chews long forgotten, will grab for a twin pack and pay more. It seems to me like sweet justice.

By Tim Harford

"Parents, brace yourselves." With those words, Oprah Winfrey introduced news of a teenage oral-sex craze in the United States. In the Atlantic Monthly, Caitlin Flanagan wrote, "The moms in my set are convinced—they're certain; they know for a fact—that all over the city, in the very best schools, in the nicest families, in the leafiest neighborhoods, 12- and 13-year-old girls are performing oral sex on as many boys as they can."

Are they right? National statistics on teen fellatio have only recently been collected, but the trend seems to be real. Johns Hopkins University Professor Jonathan Zenilman, an expert in sexually transmitted infections (and father of former Slate intern Avi Zenilman), reports that both the adults and the teenagers who come to his clinic are engaging in much more oral sex than in 1990. For men and boys as recipients it's up from about half to 75 to 80 percent; for women and girls, it's risen from about 25 percent to 75 to 80 percent.

In some quarters, that might be regarded as progress, but how you feel about it probably depends on whether you are a teenager or a parent of teenagers. I am more than a decade away from being either and so regard myself as a neutral in this debate. Moreover, as an economist, I feel uniquely qualified to opine on why it is happening.

Now, there is no shortage of explanations: Perhaps everyone just thought that if it was good enough for Bill Clinton and Monica Lewinsky, it was good enough for them. But an economic explanation would instead start with the premise that this is a response to changing incentives. What sort of incentives have changed?

Schoolchildren are now bombarded with information about the risks of sex, particularly HIV/AIDS. Oral sex can be safer than penetrative sex: It dramatically reduces the risk of contracting HIV and reduces the effects of some other sexually transmitted infections (although you can still pick up herpes, warts, and thrush). An infection that might have made a girl infertile instead gives her a sore throat.

The rest is basic economics. When the price of Coca-Cola rises, rational cola-lovers drink more Pepsi. When the price of penetrative sex rises, rational teenagers seek substitutes. Perhaps we shouldn't be surprised that even as the oral-sex epidemic rages, the Centers for Disease Control and Prevention reports that the percentage of teenage virgins has risen by more than 15 percent since the beginning of the 1990s. Those who are still having sex have switched to using birth-control methods that will also protect them from sexually transmitted infections. Use of the contraceptive pill is down by nearly a fifth, but use of condoms is up by more than a third. The oral-sex epidemic is a rational response to a rise in the price of the alternative.

Now, this is a glib explanation. A real economist would want a tighter hypothesis and serious data to back it up. That economist might well be Thomas Stratmann, who, with law professor Jonathan Klick, has pushed the idea of the rational teenage sex drive. Their hypothesis is that if teenagers really did think about the consequences of their actions, they would have less risky sex if the cost of risky sex went up. They discovered a very specific source of that higher risk: "In some states, there are abortion-notification or -consent laws, which mean that teenagers can't get an abortion without at least one parent being informed or giving consent." If teenagers are rational, such laws would discourage risky sex among teens, relative to adults.

Klick and Stratmann claim to have found evidence of exactly this. Wherever and whenever abortion-notification laws have been passed, gonorrhoea rates in the teenage and adult populations start to diverge. When it becomes more troublesome to get an abortion, teenagers seem to cut back on unprotected sex.

Economic nerds may be interested to know that the Klick-Stratmann statistical technique owes much to the one used by Steven "Freakonomics" Levitt and John Donohue to show a link between legalized abortion in the 1970s and lower crime in the 1990s.

The rest of us may be wondering what to make of it all. On the one hand, good news: Teenagers are finding safer ways to get their kicks. On the other, it suggests that teenagers believe one of the most serious consequences of an unwanted pregnancy is that their parents will find out. If teenagers are avoiding unsafe sex, it may not be for the best reasons.

Source: http://www.slate.com/id/2148583/

Source: http://blogs.ft.com/undercover/2008/01/dear-economist.html (The Undercover Economist)

Dear Economist,

In restaurants my husband always picks something better than me. It’s boring to choose the same as him. What can I do?
Sarah

Dear Sarah,

The behavioural economists Dan Ariely and Jonathan Levav speculated that we all tend, like you, to alter our choices to fit in with those around us – and they decided to put the theory to the test.

They came to an agreement with a local bar, dressed up as bar staff, and offered unsuspecting groups free samples from a choice of four tempting local beers. (One of the customers recognised Professor Ariely and assumed that his academic career had run aground.)

Sometimes the experimenters took the orders in conventional fashion; at other times, they made each person’s order confidential by asking them to write their desired beer on a piece of paper. After bringing the samples, Ariely and Levav noted how much the recipients had enjoyed their beers.

You will recognise your predicament in their results. First, when orders were called out publicly, people tended to avoid duplicating the choices of others. Second, that mattered: the people who chose first were significantly happier with their choices than those who felt obliged to choose whatever beer was left over. (This survey was done in the US. When transferred to Hong Kong, people instead tended to emulate the first choice. But, again, those who chose first were happier.)

The implication is obvious. You should make a mental note of what you wish to eat and not change your mind when your husband announces his selection. If that is too “boring’’, the solution is even simpler: order first.

Cory Doctorow thinks so, in a piece subtly titled "How Your Creepy Ex-Co-Workers Will Kill Facebook":

Sure, networks generally follow Metcalfe's Law: "the value of a telecommunications network is proportional to the square of the number of users of the system." This law is best understood through the analogy of the fax machine: a world with one fax machine has no use for faxes, but every time you add a fax, you square the number of possible send/receive combinations (Alice can fax Bob or Carol or Don; Bob can fax Alice, Carol and Don; Carol can fax Alice, Bob and Don, etc).
But Metcalfe's law presumes that creating more communications pathways increases the value of the system, and that's not always true (see Brook's Law: "Adding manpower to a late software project makes it later").
Having watched the rise and fall of SixDegrees, Friendster, and the many other proto-hominids that make up the evolutionary chain leading to Facebook, MySpace, et al, I'm inclined to think that these systems are subject to a Brook's-law parallel: "Adding more users to a social network increases the probability that it will put you in an awkward social circumstance." Perhaps we can call this "boyd's Law" for danah boyd, the social scientist who has studied many of these networks from the inside as a keen-eyed net-anthropologist and who has described the many ways in which social software does violence to sociability in a series of sharp papers.

Cory has many more complaints  - and a separate one about privacy here.
Meanwhile Seamus McCauley thinks Facebook advertising is dead on arrival because people will get plug-ins to block Facebook ads the same way we all use Firefox to block the advertising on the rest of the web.

At the heart of Cory's complaint is the idea that Facebook tries to trap us into eyeballing the site by, for example, sending highly uninformative messages - "Bob has send you a message on Facebook, click here to read it". He believes that we'll all give up soon enough because it's all too annoying.
I tend to agree. My research on rational addiction suggests that even heroin addicts will quit if the circumstances that led them into the habit change. If they can kick an unwelcome habit, so can Facebook users.

Source: http://blogs.ft.com/undercover/2007/11/is-facebook-doo.html