Monday, January 07, 2008

Tigers and Transaction Costs

On Christmas Day, a tiger escaped from its cage at the San Francisco Zoo. It killed one man and mauled two others. It turns out that these three people had been taunting the tiger; shooting rocks at it with a slingshot, dangling their feet into the cage, etc. Obviously, there has been quite an uproar about both the foolishness of these guys and of the animal security at the zoo. It turns out that the tiger's cage wall was several feet lower than recommended by some official zoo organization (not the law).

The two surviving hooligans have hired infamous law dog, Mark Geragos, who has represented the famous of all ilk, from Michael Jackson to Scott Peterson. Some social commentators have called for the zoo to fork over millions while others say those rowdy kids got what they deserved.

It seems to me that the zoo should pay big time for this fatal fiasco. My reason: transaction costs. The zoo can avoid this at a much lower cost than the random tourist. The zoo has expert information about the animals and the zoo facility, whereas the tourists usually don't know anything at all. It would be prohibitively expensive for a tourist to ensure his safety when entering a zoo. He would have to call/question countless people, inspect the cages, etc. In fact, a tourist would have to put himself into danger (in addition to bearing high costs) in order to ensure his safety. In short, those guys were probably being idiots, but the zoo should have realized this is a world full of knaves.

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