Friday, December 05, 2008

The Economics in The Office: "The Surplus" Episode

In case you missed it, last night's episode of The Office had everything an economist could ask for in a show. Below is the NBC Two Minute Replay and is well worth the watch, and as always it has the usual principal-agent problems. However, this episode went much further:

1. You got to see the bureaucracy model in action (spending the surplus or lose it).
2. The copier (commons property) is in terrible shape.
3. Michael Scott is looking for a way to spend $4,300 and all of a sudden he has lots of friends. It is perfect rent-seeking.
4. The problems of collective decision making.
5. Corporate's attempt to overcome the bureaucracy model with an incentive payment of 15%.
6. Michael foolishly puts his employees in a Rubinstein bargaining model, not realizing that the game ends in the first round of negotiations because of the perfect foresight and credible threat. He even does us the favor of stating the conditions of the game that generates this outcome!

7 comments:

Lisa Ross said...

Now I know what's going through your head when we spend time together without the kids :-)

roadie said...

This is the funniest, smartest American television show.The jokes themselves are funny last night i have download the office tv show from here...

mady said...

A good review about the office. And In comments I visit the link of Roadie and got a site for tv shows. Thanks a lot dear for sharing this. Its a better site for all tv shows,,,

dpiercex7 said...

The Office TV show is based on the popular British Series of the same name throws light on the daily interactions of a group of individual office employees. The office describes the everyday lives of the people who are employed with Scranton branch of the Dunder Mifflin paper supply company. These employees struggle to compete with modern day technologies and the staff is in denial about everything-from the possibility of downsizing to their own insignificance.

dwyane said...

Thanks for sharing this wonderful review. The Office is one of the best show on television. And I like it very much. I regular Watch The Office TV Show Online.

rookie said...

The Office TV Show Cast is really awesome. The plot of the show is also great and I am a big fan of this show. Thanks.

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