43: Seinfeld Can Teach You Everything You Need About Economics

Tracy Alloway (0:08)

Hello, and welcome to another edition of Odd Lots. I'm Tracy Alloway, executive editor of Bloomberg Markets.

Joe Weisenthal (0:14)

And I'm Joe Weisenthal, managing editor of Bloomberg Markets.

Tracy Alloway (0:17)

So Joe, did you ever watch Seinfeld?

Joe Weisenthal (0:22)

Of course. I wasn't a mega fan, like a lot of people I knew then, but of course, by now, I've probably seen all that, most of the episodes at least once.

Tracy Alloway (0:31)

Right.

Joe Weisenthal (0:32)

Who hasn't?

Tracy Alloway (0:32)

Right, so I think almost anytime you flick on the TV, there seemed to be some sort of reruns running. It was a hugely, hugely popular show, famously about nothing.

But you do like economics, right?

Joe Weisenthal (0:46)

Wait, is today's podcast gonna be about nothing?

Tracy Alloway (0:49)

No, no. Today's podcast is, I guess, going to be about the economics of nothing.

Is that better?

Joe Weisenthal (0:56)

Ooh, that sounds really good. I'm excited about that.

Tracy Alloway (1:01)

All right, well, what I'm referring to is, there's a website that's actually called Seinfeld Economics, and we are going to speak with one of the guys behind it. He is Alan Grant. He is an associate professor of economics at Baker University.

And this site, Joe, if you hadn't had a chance to look yet, it's pretty great, I think. It kind of cuts all these clips from Seinfeld and then relates them to a certain economic concept. So for instance, there are little clips that are tied into game theory, clips about common resources, demand, substitutes, all that good economic stuff.

Joe Weisenthal (1:42)

I was browsing through the site earlier and I thought it was hilarious and brilliant, and I'm very excited about talking with Alan.

Tracy Alloway (1:52)

All right, well, let's not wait any longer. Let's bring him in.

So, Alan, I suppose the first question is, why Seinfeld, and how did this actually get started, the economics of Seinfeld?

Alan Grant (2:13)

This got started probably in 2006 or 2007 And at that time, pop culture really wasn't a big deal in economics, but in 2006, a guy named Dirk Matier, who's now a professor at the University of Arizona, published a book called Economics in the Movies. And that really kind of got people thinking about what can we bring from the things that our students know into the classroom so that we can make economics more relevant to them. And so my coworkers at Eastern Illinois and I kicked around ideas and we were using clips in the classroom and I kind of thought to myself, what's more popular, what's a more common touch point than the TV series Seinfeld?

And so I did what my wife called research for the next couple of months, digging through all of the back episodes on DVD. Seinfeld was off the air by this time, looking for or compiling a database of Seinfeld clips that would be useful for economics instructors.

Joe Weisenthal (3:15)

Did you literally watch every episode on your JAG?

Alan Grant (3:20)

I did watch every single episode on my JAG. I'd start the morning with two or three episodes when I got into the office, and I'd finish the day with a few more episodes, and I got lots and lots of mocking from my wife about this.

Tracy Alloway (3:32)

So one of the things I love about the fact that you chose Seinfeld is it is the show, again, about nothing. It's just a sort of group of friends living in New York. Not that much happens to them, and it just goes through their daily life, which means that you end up getting to relate some really banal, ordinary events to economics.

Can you maybe give us some examples?

Alan Grant (3:55)

Absolutely, I'd be happy to. One of my favorite episodes for What It's Worth is an episode about Jerry and Elaine who rekindle their romance. The episode is called The Deal, and Elaine is very into the romance, and Jerry is kind of like lots of guys who don't understand exactly what it is that women want or appreciate, and he decides that instead of giving her a gift that she won't like, he decides to give her some cash instead.

Joe Weisenthal (4:24)

Cash?

Well, that's right. I figured you could go out and get yourself whatever you want.

Tracy Alloway (4:33)

No good?

Joe Weisenthal (4:34)

Are you my uncle?

Tracy Alloway (4:36)

Wait, come on.

Joe Weisenthal (4:37)

It's $182 there. I don't think that's anything to sneeze at.

Alan Grant (4:41)

We have a thread in the literature, in the economics literature, about the deadweight loss of Christmas, about how people give gifts and spend far more money on gifts than the recipients would actually spend for themselves. And it turns out that the conclusion from that thread of the literature is cash is a really great gift, but the conclusion from Seinfeld is oh, yeah, there are feelings involved and people want to feel appreciated, and sometimes it really is the thought that counts.