Tag: inefficiency

Regifting a Book

It’s Phil’s 50th birthday and Jay decides to try and sneak a gift to Phill that Cam had given him before. What Jay doesn’t realize is that Cam had inscribed the front cover and as Phil begins to red the inscription, Cam recognizes it is the same book that he gave Jay before. Giving gifts can be seen as wasteful if the giver doesn’t fully know the recipients preferences and willingness to pay. The entire family tends to give each other gifts that the others don’t always want, but this time Jay didn’t even take the time to open the book in the first place.

 

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Gay Marriage is Finally Legal

This scene takes place immediately following the Supreme Court decision that legalized gay marriage. In the marriage market, a law that prevents gay marriage is essentially a quota of 0 marriages, which leads to huge amounts of deadweight loss. At this extreme, the quantity demanded exceeds the quantity supplied, which can be seen in the second portion of the scene when the Jay and Manny arrive at the course house. There is a surprisingly deep conversation about the role of economics in same-sex marriage.

 

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Preschool Admissions

Cam and Mitch are trying to get Lily into the best preschool they can, and preschool admissions are normally very competitive, but they think that being gay and having a minority child will give them a leg up in the admissions process. The market for daycare appears to be a monopolistically competitive environment in which firms differentiate their offerings to appeal to different parents.

 

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Ugly Christmas Sweaters

The Dunphy’s call Phil’s parents in the sweaters they were given as gifts. The call goes awry when Claire sees what looks like a cigarette burn in the sofa. In her anger she calls the sweaters ugly while still on the phone with Phil’s dad. One of the issues with gift giving is that the receivers wouldn’t purchase the items they receive for the same price that the buyers paid for the item. On top of the inefficiency from an exchange point of view, there are psychic costs associated with acting like you enjoy the gift as well.

 

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Earrings vs an Exercise Equipment

Cam gives his mother in-law a pair of diamond earrings, but she reciprocates by giving him exercise equipment and salad drier. Cam doesn’t appear to think that the two gifts were of equal value, which shows how gift giving can be considered inefficient.

 

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A Terrible Gift

Cam and Mitch went on vacation to celebrate their Honeymoon and brought back gifts to the family. For Jay, they brought a cheesy golfing frog statue, but also with an illness. Jay views the frog statue so poorly that considers it possible the illness is a better gift. Economists like to discuss irrationality of gift giving because we often spend money on gifts for people at a higher value than they would spend on themselves. A second concept at play in the clip is that Cam & Mitch’s trip to Mexico added additional costs on the family through the spread of an illness. Had Mitchell known he would have gotten the family sick, he may not have left.

 

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Time Will Tell

It’s time for Jay and Gloria to exchange gifts and Jay is anxious about his gift from his wife. He struggles finding the right gift because it always seems like a competition. If the two didn’t exchange gifts then the extra psychic costs wouldn’t exist. It turns out that Gloria actually really loves Jay’s gift, but Jay really wanted that watch.

 

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One Bouquet is Enough

Cam and Mitch have been married 3 months, but it seems like their honeymoon will never end. Cam continues to give Mitchell flowers even though he clearly doesn’t enjoy them as much as he used to. He may have loved the first bouquet, but eventually he may start to hate them.

 

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