Podcast with Chris Coyne: The Economics of Valentine's Day
02/14/11 04:11 pm
Jeanne Hoffman talks with Chris Coyne about the economics of Valentine’s Day. Dr. Coyne is the F.A. Harper Professor of Economics at the Mercatus Center, a member of the Department of Economics at George Mason University and a North American editor of the Review of Austrian Economics. He also contributes to the blog Coordination Problem. Video of this podcast can also be watched at LearnLiberty.org.
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Dead weight loss of Valentine's
I would expect that the unseen of Valentine's is that people would engage in signalling behavior on other days if not for Valentine's. If we assume that getting rid of Valentine's would only spread this signalling behavior over a wider period of time, then the real dead weight loss of Valentine's is the excess capacity that producers invest in to meet the spike in demand.
On the other hand, it's also likely that Valentine's creates a social pressure that increases the total amount of signalling behavior, thus strengthening relationships and enhancing the overall wellbeing of those in the market.