Economic logic

Yesterday was the final of world cup football between Netherlands and Spain. As it happens, Paul the octopus again proved himself to be correct. But in all this hype about a octopus predicting result of this grand finale, we forget there were 100's of million people predicting the result of the game. And unlike the great Paul, they were not only predicting, but they were also emotionally attached with the game.

As it happens the result of the game made 100 of millions of people happy and may be more number of people sad. And there is a cost to sadness. Why do we watch movies, spending money from their own pockets. Because they wanted to happy. So if people give money to buy happiness, they would also pay money to avoid being sad because of football game.

So, outcome of a football game is economically efficient. People pay price in terms of opportunity cost and emotional distress which decreases their ability to work. But, they are not allowed to pay to reverse the outcome. And people who become happy due to outcome, also do not pay. As a result, there is a unique situation. In a normal market sum of producer (here players) and consumer surplus is constant. But in this football game

producer surplus < normal producer surplus
consumer surplus < normal consumer surplus
and total surplus < normal total surplus

Hence there is a huge dead weight loss which results in players being inadequately rewarded for their product. And customers also get inferior product.

That's why there is an old proverb " padhonge likhonge banoge nawab khelonge koodonge banoge kharab"

Because job market is efficient in competitive market.

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