More Commentary on the Financial Mess

1. Russell Roberts
2. Scheherazade Rehmanen, Ken Rogoff, and John Cochrane
3. Bill Easterly
4. Chris Carroll
5. Charles Wheelan

Consumer Surplus

A student suggests that Wendy's new ad does a good job of illustrating the concept of consumer surplus:

Ignobelity

An economist clinches one:

"I've won quite a lot of academic awards; I can't think of one that makes me happier than this one," said Dan Ariely, a Duke University economist and author of the book "Predictably Irrational: The Hidden Forces that Shape our Decisions," who said his deserving work has been passed over year after year.

Ariely's Ig Nobel-winning work demonstrates the secret behind many of his fellow laureates: That hidden in the humorous work is a legitimate scientific point.

Ariely recruited volunteers for a study and printed brochures describing an invented painkiller that was actually just a placebo. Some were told the drug was expensive; others were told it was cheap.

The subjects were given electric shocks before and after they took the pill. Those who got the pricey fake medicine reported a bigger reduction in pain than those with the cheaper fake.

Ariely's experiment, which appeared in the Journal of the American Medical Association, suggested that price and marketing of a drug may play a role in its effects.