Ideas Andersoned? Won't Work

Not much to say today; I tried programming myself last night to dream about important lofty topics that I could blog about this morning. Where did it get me? I woke up in the middle of the night obsessed with the following question: Why did Captain Lou Albano lower himself to do that Cindi Lauper video? I am afraid I never got beyond the question - there really are no good answers to this one.

My bachelor existence ends tonight when I fly back to Wisconsin. I won't be blogging until July 5th. I'll leave you with some quotes and comments from Marginal Revolution.

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This is from Marginal Revolution (link to the left):

Why should a woman take her husband's last name? So asks Eugene Volokh. His commentators adduce a number of reasons involving children, or a desire to change an ugly last name.

The cynical economist looks for signaling explanations for why the practice persists. By taking a man's last name -- a costly move -- a woman signals her long-term commitment to the relationship. The real question is why the man does not take the last name of the woman. Yes this is disruptive of the man's career but that is precisely the point. And don't more men wreck marriages than do women, therby implying they require more constraint?

Some men do take their wives' last names, and more choose a hyphenated version of the two names. But do they not signal weakness in a bargaining game? (Do you see any professional wrestlers named Smythe-Thomson?) Could signaling strength in bargaining games be worth more to men than to women?

In my case it wouldn't work for two simple reasons: Ideas Andersoned doesn't make any sense, and referring to myself in the third person as the Andersoner would be no less egotistical than referring to myself as the Hather, but lacks that certain ring that "Hatcher" delivers. Oh, and the other reason is that I wear pants (not always the pants, but pants nonetheless).

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One of the Marginal Revolution guys wrote an interesting summary of an article that explains why rental car companies shroud their prices:

A interesting paper by Xavier Gabaix and David Laibson asks why some firms shroud their prices. Car rental companies, for example, advertise low rental rates but shroud the price of insurance and gasoline fill-up. One can understand why one firm might try this, but why don't competitors advertise their prices honestly along with the slogan, "We have no hidden fees. The other guys do. Draw your own conclusions"? Wouldn't such a firm win the competitive battle? Gabaix and Laibson show that if some consumers are naive while others are sophisticated, the answer is no.

The existence of the naive, who choose where to rent based on the advertised rental price and not the full price of driving, makes shrouding profitable. But the profits attract entry, leading to an equilibrium in which rentals are priced below cost and insurance and fill-ups are priced well above cost. Why doesn't it pay to advertise and price both services closer to cost? The reason is that sophisticated consumers don't want to buy at cost -- the sophisticated consumers want to buy from the firm that attracts the naive because the sophisticated consumers know to reject the supplemental insurance and return the car after gassing it up themselves, thereby taking advantage of the low rental rate and avoiding high markups. Notice that shrouding doesn't benefit the firms that shroud (competition reduces their profits to normal); instead, it causes the dumb to subsidize the smart.