Misbehaving: The Making of Behavioral Economics

by Richard H. Thaler

I should stress that the imprecision of these forecasts does not mean they are useless. When prices diverge strongly from historical levels, in either direction, there is some predictive value in these signals.

How goods were allocated did affect who would end up owning the mugs. In other words, the Coase theorem worked in theory, when trading for tokens redeemable for cash, but it did not work in practice, when trading for real-world objects like coffee mugs.

This is the famous Peter Principle: people keep getting promoted until they reach their level of incompetence.