Book Review: "The Undercover Economist" by Tim Harford

(CC-BY-NC-SA Das U-Blog by Prashanth)
This is also a borrowed book (from the same relative that lent me the book Mokshagundam Visvesvaraya). That said, I will say right off the bat that this is a far superior book in terms of writing style and quality.
I took an AP Economics course this past year, so I was somewhat familiar with most of the concepts presented in this book beforehand. However, when I read the book, I realized what I had been missing.
My class's questions didn't have any apparent relation with what was going on in the world. Why should I care if XYZ Corporation's average variable cost is higher than the market price of the good it sells? One is truly an economic theorist if one weeps at the thought of a hypothetical company shutting down to minimize costs. On the other hand, this book relates economic concepts to things that matter, like why coffee is sold at different prices and why different land areas fetch different prices.
Harford first talks about the ideas of rents and profits, continuing with the various functions of prices as signals and the various means companies try to extract different prices from different customers (for the same product). He then talks about externality taxes and subsidies, continuing with market failures occurring due to the presence of inside information (i.e. information that one side but not the other doesn't). He then continues with a discussion on the stock market and on bidding wars. He concludes with discussions on why poor countries remain poor and on the effects of globalization on various countries, both rich and poor.
In short, I am convinced. By using relevant, practical examples in explanations of every concept introduced, he has convinced me that while the free market can solve most problems, government intervention is generally required when externalities show up (and these can't be solved by market negotiations); this is a very reasonable-sounding idea, without resorting to the ideologies of either "government is always bad" or "markets are always harmful".

How the Economics of Rewards Relates to Open Source

As I just noticed, this is post #10000000_2, #80_16, or #200_8! (The underscore separates the number (on the left) from the base system (on the right).)
I got the idea for this post from a video embedded in an article on the website The Linuxologist. It deals with how incentives affect people's performance - specifically the incentive of a higher reward for better performance. Follow the jump to read the rest.

Reflection: Raffle Fundraiser

I'd like to do a little retrospective about the Robotics Club and it's most recent fundraiser - the raffle sale with prizes consisting of Chipotle gift cards.
Overall, we made $114, but the gift cards cost $50 in total. $64 in profits is certainly more than what I was expecting.
I want to thank everyone who helped out with this and bought tickets. You've all been amazing. Again, thank you.
That said, there were quite a few things that went wrong.
First, our advertising campaign was not timely. Part of this is my fault, as I did not create and post the fliers in a timely manner (I did it on the schoolday before the first day of sales). Also, some of the fliers could have been posted in strategically better locations. Furthermore, the video could have been made and submitted to the TV studio in a more timely manner. To those whom it may concern, please do not wait until the last second for making and submitting a video for the morning announcements!
Second, we really overestimated the number of people who like Chipotle. This was based off of an unscientific appraisal of classmates' preferences. Next time, we should either sell baked goods, fried rice, or samosas.
Third, the box was mishandled. Next time, there should always be someone attending the table.
Fourth, the tickets were mishandled. Everyone should know exactly what to do when distributing goods and collecting money.
Fifth, we are the Robotics Club. I am not ashamed of this, but this club doesn't exactly inspire the same kinds of contributions from outsiders as does the National Honors Society.
Sixth, the fundraiser itself was a week long. On the one hand, it may have helped bring in more money overall, but on the other hand, there were a lot of multiple requests for others to buy tickets. This probably ticked a lot of people off.
Seventh, the entire after-school thing was mishandled. The first day, this was my fault in that I didn't show up soon enough. The next 2 days, however, made me mad. I had booked the entire week for all those times and it was OK. On Tuesday, however, the Happy-happy-joy-joy-sunshine club shows up; on Wednesday, it's the Fried Rice sale. If there really is a conflict, can't the administrators notify the later group properly? Also, isn't robotics more important to the academic advancement of this school than happy-joy-sunshine or whatever?
Let's all keep this in mind for the next fundraiser.
Anything I missed?

Is the National Honors Society still about Honor[insert suffix here]?

Today there was a National Honors Society meeting in our school after school.
NHS is supposed to be an organization dedicated to (from the website) "Scholarship, Service, Leadership, and Character".
(From the website,) Members must be morally upright, set an example for peers, and perform service for the betterment of the community without regard to money.
Yet this is not what I saw on display at today's meeting. All I saw was talk about money, moolah, and more bucks.
For one, this is the first year that the NHS at our school has instituted a $10 membership fee. Why? Have operating costs skyrocketed so much that fundraisers explicitly for the club (i.e. the Spring Cookie Dough sale) can't cover them? If so, that's understandable. If not, I'm wondering if NHS is any longer about service, charity, or being non-profit.
While the next thing is nothing new, I am still puzzled as to why the coordinator and executive board members require those participating in the Mini-Walk for the homeless to bring another non-member student and that those non-member students should also pay fees.
First of all, what's wrong with just bringing a friend who doesn't want to go to the Walkathon in DC? It's great to encourage friends to also come to the Walkathon, but I think mandating friends to come for this is going a bit too far.
Second, why must a non-member friend come too? Again, encouraging people to bring friends and donate to the homeless is great, but a lot of people I know who are going are already in NHS. What's wrong with walking with them?
While all of the funds go to the actual Walkathon, I am still suspicious about this sort of authoritarian attitude towards this event. It's supposed to be fun, but it's starting to look less like that now.
Next, the attitude displayed by the coordinator and by the professional liaison for fundraising was a bit disappointing. Rather than focus on the target of the fundraising (i.e. Kenyan schools and villages), the focus was just on the fundraising itself and the prizes. Why?
The only other beef I have is with the computer drive in that the computers have Windows on them. My problem is that they are quickly going to break down, and the recipients of these computers will have very little skills to fix them and will probably have to pay exorbitant prices to computer professionals to have the job done. This, of course, is only based upon what I know about the program; I'm unsure of all of the details, so this is a story for another day. This is just a preliminary thought (i.e. about the old computers).
Thus, it seems to me that the NHS is being motivated more by profit than by actual community benefit. It's making me doubt the philosophy behind the organization.
I'm planning to get all of these questions answered tomorrow before giving the checks for NHS fees and for the Mini-Walk. If the answers are satisfactory, I'll stay. If not, sayonara, NHS!