Why Popcorn Costs So Much at the Movies : And Other Pricing Puzzles

**Why Popcorn Costs So Much at the Movies, And Other Pricing Puzzles** unravels the pricing mysteries we encounter every day. Have you ever wondered why all movies, whether blockbusters or duds, have the same ticket prices? Why sometimes there are free lunches? Why so many prices end with "9"? Why ink cartridges can cost as much as printers? Why merchants offer sales, coupons, and rebates? Why long lines are good for shoppers? Why men earn more than women, around the globe – and why they always will? Richard McKenzie goes on to show how the 9/11 terrorists still kill Americans every day, because their attack distorted the perceived risks and relative prices of air vs. automobile travel, and jacked up both security costs and flight delays. Professor McKenzie also explores the unintended consequences of well-meaning efforts to spur the use of environmentally friendly fuels: starvation among millions of people around the world, and the destruction of rainforests in Malaysia and Indonesia. How can these things be? If you think you know the answers, think again. Why Popcorn Costs So Much at the Movies, And Other Pricing Puzzles shows you that the real reasons are sophisticated and surprising – and in Professor McKenzie’s hands, both informative and entertaining. You won’t need a degree in economics to enjoy this fascinating book, just an armchair and an inquiring mind. __"This is one of the very best books on pricing. If you are looking to understand the economics of the world around you, you can do no better than to start here."__Tyler Cowen, George Mason University; economics blogger of "www.marginalrevolution.com" __"Truly liberating. Using a series of fascinating enigmas we’ve all encountered in our daily lives, Richard McKenzie reveals how the real economic world works. Highly readable. Extraordinarily enlightening."__W. Michael Cox, senior vice president and chief economist at the Federal Reserve Bank of Dallas __"Anything we think about every day is important. And who goes a day without thinking about prices? But prices are more important than most people realize. If you are interested in reducing pollution from cars, or not being fooled into paying too much, or too little, for products, or in just getting the best deal on popcorn at the movies, you will benefit from knowing more about prices than most people do. And there is no easier, or entertaining, way of finding out more on how and why prices are important than by reading McKenzie's fascinating book Why Popcorn Costs So Much at the Movies, And other Pricing Puzzles. And are people really fooled by all those prices that end in 99 cents? You'll be surprised."__ Dwight Lee, University of Georgia

Why Popcorn Costs So Much at the Movies, And Other Pricing Puzzles unravels the pricing mysteries we encounter every day.

Have you ever wondered why all movies, whether blockbusters or duds, have the same ticket prices?
Why sometimes there are free lunches?
Why so many prices end with "9"?
Why ink cartridges can cost as much as printers?
Why merchants offer sales, coupons, and rebates?
Why long lines are good for shoppers?
Why men earn more than women, around the globe – and why they always will?

Richard McKenzie goes on to show how the 9/11 terrorists still kill Americans every day, because their attack distorted the perceived risks and relative prices of air vs. automobile travel, and jacked up both security costs and flight delays. Professor McKenzie also explores the unintended consequences of well-meaning efforts to spur the use of environmentally friendly fuels: starvation among millions of people around the world, and the destruction of rainforests in Malaysia and Indonesia.

How can these things be? If you think you know the answers, think again. Why Popcorn Costs So Much at the Movies, And Other Pricing Puzzles shows you that the real reasons are sophisticated and surprising – and in Professor McKenzie’s hands, both informative and entertaining.

You won’t need a degree in economics to enjoy this fascinating book, just an armchair and an inquiring mind.

"This is one of the very best books on pricing. If you are looking to understand the economics of the world around you, you can do no better than to start here."
Tyler Cowen, George Mason University; economics blogger of "www.marginalrevolution.com"

"Truly liberating. Using a series of fascinating enigmas we’ve all encountered in our daily lives, Richard McKenzie reveals how the real economic world works. Highly readable. Extraordinarily enlightening."
W. Michael Cox, senior vice president and chief economist at the Federal Reserve Bank of Dallas

"Anything we think about every day is important. And who goes a day without thinking about prices? But prices are more important than most people realize. If you are interested in reducing pollution from cars, or not being fooled into paying too much, or too little, for products, or in just getting the best deal on popcorn at the movies, you will benefit from knowing more about prices than most people do. And there is no easier, or entertaining, way of finding out more on how and why prices are important than by reading McKenzie's fascinating book Why Popcorn Costs So Much at the Movies, And other Pricing Puzzles. And are people really fooled by all those prices that end in 99 cents? You'll be surprised."

Dwight Lee, University of Georgia

• How Prices Matter rices are ubiquitous, so much so that their importance to the smooth operation of a market economy (even one constrained by extensive polit- P ical controls as is the case in China) can go unnoticed and unheralded. Prices are what all trades, whether at the local mall or across the globe, are built around. Tey facilitate trades among buyers and sellers who don’t know each other, meaning they make less costly, or more socially benefcial, the allocation and redistribution of the planet’s scarce resources. Indeed, as the late Friedrich Hayek is renowned for having observed, prices summarize a vast amount of - formation on the relative scarcity and, hence, the relative cost of resources (with much of the information subjective in nature) that can be known only by ind-i viduals scattered across markets and cannot be collected in centralized loc- tions, except through market-determined prices. 1 Because they summarize, and largely hide from view of buyers, so much i- formation spread among people throughout the world, prices can be puzzling. Why prices are what they are, and change for reasons that are obscured by a multitude of economic events that can extend backward in time and forward into the future, can be mysterious. Explaining many puzzling prices can be - tective work that the modern-day Sherlock Holmes would surely fnd challenging. Front Matter....Pages I-XV Price and the “Law of Unintended Consequences”....Pages 1-27 Pricing Lemons, Views, and University Housing....Pages 29-55 Why Sales....Pages 57-77 Why Popcorn Costs So Much at the Movies....Pages 79-100 Why So Many Coupons....Pages 101-112 Why Some Goods Are Free....Pages 113-141 Free Printers and Pricey Ink Cartridges....Pages 143-158 Why Movie Ticket Prices Are All the Same....Pages 159-176 Why So Many Prices End with “9”....Pages 177-193 The Economics of Manufacturers’ Rebates....Pages 195-209 The Psychology and Evolutionary Biology of Manufacturers’ Rebates....Pages 211-231 The Question of Queues....Pages 233-262 Why Men Earn More on Average than Women—And Always Will....Pages 263-289 Back Matter....Pages 291-326 Cover 1 Why Popcorn Costs So Much at the Movies 2 Copyright 4 Preface: How Prices Matter 5 Contents 13 1 Price and the "Law of Unintended Consequences" 16 2 Pricing Lemons, Views, and University Housing 43 3 Why Sales 70 4 Why Popcorn Costs So Much at the Movies 91 5 Why So Many Coupons 113 6 Why Some Goods Are Free 125 7 Free Printers and Pricey Ink Cartridges 154 8 Why Movie Ticket Prices Are All The Same 170 9 Why So Many Pictures End With "9" 188 10 The Economics of Manufacturers' Rebates 205 11 The Psychology and Evolutionary Biology of Manufacturers' Rebates 220 12 The Question of Queues 241 13 Why Men Earn More on Average than Women - And Always Will 271 Bibliography 298 This entertaining book seeks to unravel an array of pricing puzzles from the one captured in the book's title to why so many prices end with "9" (as in $2.99 or $179). Along the way, the author explains how the 9/11 terrorists have, through the effects of their heinous acts on the relative prices of various modes of travel, killed more Americans since 9/11 than they killed that fateful day. He also explains how well-meaning efforts to spur the use of alternative, supposedly environmentally friendly fuels have starved millions of people around the world and given rise to the deforestation of rainforests in Malaysia and Indonesia. Explains the mysteries of the current pricing system, such as the use of the number nine in prices, why all movies cost the same, and the unintentional consequences of using environmentally-friendly fuels.