Blog Archives

How pyramid schemes work

An individual who joins a multi-level marketing (MLM) company can make money by selling products directly to consumers AND more importantly by getting other people to become distributors at a lower level in the pyramid. In fact, even if nobody

Posted in Managerial Micro

Interest rates are low because of demographic changes and rising corporate power

Greg Mankiw wrote in the NYT about the puzzle of persistently low interest rates. Interest rates have been lower than ever before in history and they have been very low for decades so low interest rates seems to be the

Posted in Macro, Managerial Micro

Amazon as a nonprofit

For most of Amazon’s history it made zero profit. That changed a couple years ago, but although its gross profit margin on revenues is now positive, it is still pretty negligible today. Amazon is a huge conglomerate these days, but

Posted in Managerial Micro

A history of the Corporation

There have always been large organizations that have done the kinds of things corporations do, but for most of human history, large organizations were run by religious hierarchies or governments rather than for-profit businesses. For-profit businesses were always small which

Posted in Managerial Micro

The expected value of potential lives lost during atomic testing

Rob Reid wrote a great explanation of the horrible risk taken during the Manhattan Project, when American nuclear scientists took a chance estimated at one-in-three million that the first atomic test would create a chain reaction that would ignite the

Posted in Globalization & International, Health, Managerial Micro, Violence & Peace

An airline “dent and scratch sale”

A classic story of price discrimination that textbooks tell is the appliance ‘dent and scratch’ sale in which an appliance store will deliberately create cosmetic damage on some of their washers and refrigerators so that they can sell them at

Posted in Managerial Micro

VOX messed up: Amazon.com already has enormous monopoly power

Emily Stewart at Vox.com made a mistake about monopoly power in America. She wrote that Amazon… could eventually become so big that it can control what shipping companies such as FedEx and UPS charge it, and, in areas where it becomes

Posted in Managerial Micro, Public Finance

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