The Economics of Catcher in the Rye

From Daniel Hamermesh's wonderful Economic Thought of the Day (someone get this man on WordPress):

One of the most widely read books in American high schools is Catcher in the Rye, by J.D. Salinger. At one point the hero, Holden Caulfield, is thinking of running away from New York City. He thinks his little sister Phoebe follow him (sp) if he does, and he hates the idea of her missing out on her school play. He also likes the idea of being with her. One might view this as a game, with the payoff bi-matrix:

		Phoebe
		Run Away	Stay
Holden	Run Away	(4,4)	(5,4)
	Stay	(-2,-2)	(6,6)

Holden has no dominant strategy, but Phoebe does: She will stay in New York no matter what. Knowing that, Holden is best off staying; and both of them staying is a Nash Equilibrium and a Pareto optimum. Indeed, Salinger writes, "Life is a game, boy. Life is a game that one plays according to the rules." (Supplied by Brittni Svatek)

Here's another Thought on the optimal circumstances for cheating:

A student was in my office hours yesterday and asked a very specific question. I gave a sheepish look, and she asked why I was looking that way. I hemmed and hawed, then blurted out that I had a question on exactly that point on today's quiz. I said I was worried that she would tell other students about this. She said she had an incentive not to tell, since to some extent I might be grading on the curve. I said with 500 students in the class, her inference wasn't correct--she has an incentive to tell 5 friends and help them without appreciably affecting the grading scale in the course. BUT--she would have to swear them to silence, or tell them only right before class, otherwise they might talk to 5 of their friends, etc., and enough students might then get the question correct to wipe out the advantage arising from her little bit of advanced knowledge about the quiz.

The discount rate of an 11-year-old:

My 11-year-old grandson is still rationed to 30 minutes per day on his game-player (now a Nintendo Wii). This morning he used the entire daily ration playing with a friend of his; yet another friend came over in the afternoon. He asked my son if he could borrow tomorrow's 30 minutes and use it. My son said yes, but if he borrowed tomorrow's ration it would be the equivalent of 20 minutes today. Essentially my son was charging him 50 percent interest per day--use 20 minutes day, or 30 minutes on the next day. My grandson took the deal, implying that his discount rate was at least 50 percent per day--or perhaps (1.50)365 per annum, a truly immense number. It might, however, be that he is like most people--the discount rate for near-term events is very high, but the discount rate per day is much lower for more distant events.

And even Harold and Kumar get a mention:

A discussion in Harold and Kumar Go To White Castle illustrates the fact that, when talking about people, comparative advantage is not the only thing. Harold tells Kumar that with perfect MCAT scores and great grades, why doesn't he want to go to medical school? Kumar responds by noting that, "Just because [... deleted for reasons of propriety] doesn't mean that he has to be a porn star." Our comparative advantage generates our earnings opportunities--Kumar might be much better off financially, given his skills, choosing medicine. But preferences matter too; and we maximize utility, not income. His response to Harold suggests that he would rather earn less doing something he finds enjoyable than earn a lot in medicine, which he doesn't enjoy.