The Why Axis: Hidden Motives and The Undiscovered Economics of Everyday Life

by Uri Gneezy

But John faced a much different kind of discrimination when he entered the job market as a newly minted Ph.D. in 1995. Although he applied to more than 150 academic jobs and had completed several field experiments, he was given only one interview. He later learned that other nearly identical applicants received thirty interviews from just forty or so applications. The main difference between John and these other applicants was that John received his Ph.D. from the University of Wyoming, whereas they had received theirs from “brand-name” schools like Harvard and Princeton. Employers were using that bit of information to screen their applicants—effectively discriminating between the “haves” and the “have-nots.” You, too, have likely experienced this type of discrimination—maybe without even knowing it.

Societies have criminalized homosexuality for centuries, as Leonardo da Vinci found out when he was arrested for sleeping with a male prostitute.

Never heard this.

A famous example of this pricing is from the British band Radiohead. In 2007, the band released a CD as a digital download. It encouraged fans to log on to its website and download the album for any price they chose. Fans could get the album for free or pay as little as 65 cents (the cost of handling by the credit card company) or more. But would the fans pay for something they could get for free? And did they pay? Interestingly, hundreds of thousands of people downloaded the album from the band’s website, and many of them (around 50 percent) paid something for the CD. (By the way, as our friend, the recent Nobelist Al Roth likes to say, “Columbus wasn’t the first to discover America; he was the last.” After Columbus, everyone knew about the “new” continent. The same is true here. Radiohead wasn’t the first to discover this pricing strategy, but the group is famous enough to be the “last”—no one will ever need to “rediscover” it.)