Economics
Business
47 rabbit holes · 26 people exploring
Common starting questions
- How can markets 'know' things nobody has said publicly?
- Did Blockbuster really turn down buying Netflix?
- Why didn't Coca-Cola raise its price for 70 years?
- Why did cigarettes become currency in POW camps?
- Why do auction winners so often regret it?
Rabbit holes
- 1720 was a terrible year to have savings in Europe
London and Paris had their bubbles pop in the same year: the South Sea Company in Britain, John Law's Mississippi scheme in France. Newton supposedly sold early at a profit, then bought back in near the top and lost a fortune.
Wanjiru Kamau · 6 sources
- Dota 2's prize pools were crowdfunded by cosmetics
Valve put 25% of battle pass sales into the prize pool, so players basically crowdfunded the biggest prizes in esports. The 2021 edition hit around $40 million. Then Valve dropped the battle pass and the pool shrank to a small fraction of that.
Tomás Rinaldi · 5 sources
- the stock market figured out who caused the Challenger disaster within hours
Tomás Rinaldi · 7 sources
- Blockbuster could have bought Netflix for $50 million
In 2000 Netflix's founders flew to Dallas and offered to sell for $50 million. Blockbuster passed. Ten years later Blockbuster was bankrupt and the last store standing ended up in Bend, Oregon.
Daniela Ruiz · 6 sources
- a Coke cost 5 cents for about 70 years
From 1886 to 1959. Part of it was an early bottling contract that locked in the syrup price, and part was vending machines that took a single nickel. Going to 6 cents meant asking for two coins.
Tomás Rinaldi · 6 sources
- every benchmark eventually becomes a training target
'When a measure becomes a target, it ceases to be a good measure.' Applies to ML benchmarks, school test scores, hospital wait times, and sprint velocity.
Arjun Pillai · 5 sources
- haggling was normal until price tags, and dynamic pricing is bringing it back
For most of history you negotiated the price of almost everything. Fixed prices on tags spread with Quaker shopkeepers and then 19th century department stores. Now apps reprice constantly and it feels like haggling with a computer that knows more than you.
Tomás Rinaldi · 6 sources
- the Dutch traded Manhattan for a nutmeg island
The Dutch wanted a monopoly on nutmeg so badly that in 1667 they let the English keep New Amsterdam in exchange for a tiny island in the Bandas. The history of the Bandas themselves is a lot darker.
Tomás Rinaldi · 5 sources
- pirate ships were weirdly democratic
Elected captains who could be voted out, written constitutions, fixed shares of loot, compensation for injuries. Leeson's argument is that it was just the most efficient way to run a criminal enterprise.
Clara Novak · 5 sources
- some US states required margarine to be dyed pink
Dairy lobbies fought margarine with taxes and bans on coloring it yellow. People would buy it white with a capsule of dye and knead it in at home.
Tomás Rinaldi · 3 sources
- the shipping container changed the whole world economy
Before containers, loading a ship took days and armies of dockworkers, and theft was routine. Standard boxes made shipping so cheap that it reshaped where everything is manufactured.
Desmond Achebe · 6 sources
- In a WWII prison camp, cigarettes became money and the economy got inflation
Radford's paper reads like a tiny economics textbook. Red Cross parcels arrive, people trade, prices emerge, middlemen show up, and when the parcels stop coming everything deflates.
moth · 5 sources
- if you won the auction you probably overpaid
Kwame Darko · 5 sources
- people bet on papal elections until a pope banned it in 1591
Betting on who'd be the next pope was a whole scene in 16th century Rome. And in the US, betting on presidential elections around Wall Street was huge and openly reported in newspapers from the late 1800s until around 1940.
Tomás Rinaldi · 6 sources
- Why are Spain's high-speed trains so cheap to build?
Desmond Achebe · 4 sources
- Lloyd's of London started as a coffee house
'Penny universities': for the price of a coffee you got the newspapers and the conversation. Lloyd's, the stock exchange, and a bunch of newspapers grew out of coffee houses.
Yuki Tanabe · 5 sources
- how StarCraft became a TV sport in South Korea
Leo Bergman · 6 sources
- The Market for Lemons got rejected three times before it won a Nobel
Nikolai Volkov · 6 sources
- parking minimums are why everything is so far apart
Zoning in a lot of US cities requires a fixed number of parking spaces per building, often based on guesswork. Shoup spent a career showing what that costs. More cities are scrapping them now.
Daniela Ruiz · 5 sources
- why the A380 flopped
Gabriel Souza · 6 sources
- an Italian bank takes cheese as collateral
Credem in Emilia-Romagna lends money to Parmigiano makers against wheels of their cheese, which sit aging in the bank's climate-controlled warehouses while the loan runs. Collateral that gets more valuable while it waits is honestly a great deal for everyone.
Kwame Darko · 5 sources
- a mountain of silver in Bolivia and a century of European inflation
Started with a documentary clip about Cerro Rico and somehow ended at monetary theory and the Ming dynasty's appetite for silver.
Maren Holt · 7 sources
- Tokyo's trains make money because the railways own the neighborhoods
Kate Lindqvist · 6 sources
- Japanese houses lose all their value in ~20 years
Houses are treated more like cars than investments. Earthquake codes keep changing, so new is assumed safer. Ended up mourning the Capsule Tower (demolished 2022).
Tomás Rinaldi · 5 sources
- streaming slowly turned back into cable
Cut the cord to save money, ended up with six subscriptions, ads, and bundles. I wanted to know if that was inevitable. The bundling/unbundling quote pretty much explains it.
Daniela Ruiz · 6 sources
- the Big Mac index started as a joke
Kwame Darko · 5 sources
- salt was a big deal
Tomás Rinaldi · 4 sources
- Batgirl was basically finished and got shelved anyway
Dev Malhotra · 5 sources
- Hollywood Stock Exchange, and the real box office futures Congress banned
HSX launched in 1996 as a fake-money market for movies and turned out to be decent at predicting box office and Oscars. In 2010 regulators approved real-money box office futures, and a few months later Congress banned them in Dodd–Frank after the film industry lobbied against them.
Tomás Rinaldi · 5 sources
- Elinor Ostrom and the tragedy of the commons that wasn't
Tomás Rinaldi · 6 sources
- Isaac Newton spent his later years hunting counterfeiters
I knew Newton worked at the Mint but assumed it was a cushy title. Instead he ran a network of informants, personally interrogated suspects, and got Chaloner hanged in 1699.
Tomás Rinaldi · 7 sources
- On Yap, money is a giant stone that never moves
Some of the stones are too big to move, so ownership just changes when everyone agrees who owns it now. There's even a story of one that sank on the trip back and still counted, because everyone knew it was down there.
Tess Quinlan · 6 sources
- why reusable rockets took so long
The Shuttle was technically reusable, but refurbishing it cost so much it never got cheap. The DC-X was doing vertical landings in 1993 and then got cancelled. Lots of 'we almost had this' in this one.
Lin Chen · 5 sources
- the FCC sells airwaves with auctions designed by game theorists
Spectrum used to be handed out through hearings and then lotteries. Coase suggested selling it in 1959 and was reportedly asked if he was joking. The US finally started auctioning it in 1994, with many rounds of bidding on all the licenses at once, because licenses are worth more in combinations.
Tomás Rinaldi · 6 sources
- guess 2/3 of the average
Wren Abernathy · 5 sources
- why almost every advanced chip comes from one company
Started with TSMC, ended up at ASML in the Netherlands, the only company that makes EUV machines. Each one costs north of $150 million and ships in dozens of containers.
Omar Haddad · 6 sources
- an economist built a computer that runs on water
Income, taxes, savings and imports are literally tanks and pipes. You turn valves to change policy and watch the money (colored water) slosh through the economy. He built the first one in a garage in 1949.
Daniela Ruiz · 5 sources
- Kodak built the first digital camera in 1975
Fern Achterberg · 6 sources
- why keycaps cost $150
Double-shot molding, tooling costs, and group buys with small runs. You pay up front and wait a year. The hobby has its own economics.
Ravi Subramanian · 3 sources
- the Million Dollar Homepage is now a link rot museum
A student sold a 1000×1000 pixel grid at $1 a pixel in 2005 to pay for university. It worked. Then he dropped out.
Lou Tremblay · 4 sources
- Gillette didn't actually give away razors to sell blades
Sofia Castro · 6 sources
- Brawn GP: bought for £1, won both titles, gone a year later
Honda pulled out in December 2008. Ross Brawn bought the team for a symbolic £1, put a Mercedes engine in the car Honda had been developing, and it was the fastest thing on the grid. Both championships in 2009, then sold, and it became the Mercedes team that went on to dominate the hybrid era.
Daniela Ruiz · 6 sources
- why a string quartet costs more every year
Started out annoyed about haircut prices and ended up here. The idea is from a 1966 book about the economics of the performing arts and it still explains a lot.
Ama Mensah · 5 sources
- how Spotify actually pays artists (it isn't per stream)
Daniela Ruiz · 6 sources
- the worst inflation ever wasn't Weimar or Zimbabwe
Yuki Tanabe · 6 sources
- tulip mania probably wasn't that manic
Grew up hearing tulips were the original bubble. Turns out the historians who went back to the archives found a lot less ruin than the story says.
Frida Nyström · 6 sources
- why are diamonds expensive and water basically free?
Pete Lindgren · 7 sources