The Economics of The Office
Learning economics from the world's best boss
Huge Turnaround for Profit
Dwight corners the market on Princess Unicorn dolls! This is a good opportunity to discuss the relationship between expected future prices and changes in demand. Dwight knew that the demand for these dolls would increase as Christmas drew closer. Advanced students should be able to draw a supply and demand graph for this market and see that in the very short run the supply of this good is perfectly inelastic in the Scranton area. This makes the profit opportunity for Dwight even greater.
Season 5 Episode 11 "Moroccan Christmas"
Information and Market Efficiency (G14) Microeconomic Behavior: Underlying Principles (D01)
FaLaLa CaChing
Dwight corners the market on Princess Unicorn dolls! This is a good opportunity to discuss the relationship between expected future prices and changes in demand. Dwight knew that the demand for these dolls would increase as Christmas drew closer. Advanced students should be able to draw a supply and demand graph for this market and see that in the very short run the supply of this good is perfectly inelastic in the Scranton area. This makes the profit opportunity for Dwight even greater.
Season 5 Episode 11 "Moroccan Christmas"
Information and Market Efficiency (G14) Microeconomic Behavior: Underlying Principles (D01)
Arbitrage
In this example Dwight exploits an arbitrage opportunity. He buys a good at a low price and then sells it at a much higher price. We think in efficient markets consumers or firms will look to exploit these opportunities until they no longer exist.
Season 4 Episode 16 "Did I Stutter?"
Information and Market Efficiency (G14) Microeconomic Behavior: Underlying Principles (D01)
Landlord Dwight
When Dwight becomes the office's landlord he sets up a coffee shop in the foyer and installs motion sensors on the lights. Dwight is able to charge high prices in the coffee shop because its location gives him monopoly power. His efforts to cut costs are an example of incentives at work.
Microeconomic Behavior: Underlying Principles (D01) Production and Cost (D24) Monopoly (D42)
Commission Skit
Michael and Dwight dress up in costume and act out a skit to try to convince the office to reject a corporate policy change in commissions. Michael inadvertently makes the case that the new policy can only make them better off. This is an example of evaluating decisions at the margin.
Season 7 Episode 6 "Costume Contest"
Microeconomic Behavior: Underlying Principles (D01)
The Incentive
When Andy becomes the new manager, he institutes a 'points system' to incentivize the office to sell more paper. His plan works better than expected when he offers to tattoo himself as the grand prize. This clip is a funny example of the power of incentives.
Season 8 Episode 2 "The Incentive"
Labor Productivity (J24) Microeconomic Behavior: Underlying Principles (D01) Compensation Packages (J33)
Yankee Swap
The office celebrates Christmas with a Secret Santa gift exchange. When Michael doesn't like the gift he receives, he turns the gift exchange into a gift swap where the employees can steal gifts from one another. This is great starting point to discuss the welfare effects of giving gifts and the heterogeneity of consumer preferences.
Season 6 Episode 13 "Secret Santa"
Microeconomic Behavior: Underlying Principles (D01)
Garage Sale
The office holds a garage sale to get rid of things they no longer need. Meanwhile, Dwight starts with a thumbtack and trades his way up to a telescope. However, he soon parts with the telescope when Jim offers him something of seemingly even more value. This is a great example of how consumer preferences differ and how trade can make two parties better off. It also illustrates how effective marketing can shift an individual's demand curve to the right.
Season 7 Episode 19 "Garage Sale"
Microeconomic Behavior: Underlying Principles (D01) Trade (F10)
Search Committee Part 2
Jo Bennett comes to Scranton and Kelly takes the opportunity to report Gabe's disturbing behavior. Meanwhile, Dwight vies for the job of office manager. The key to this clip is Dwight's lack of knowledge that each text he sends is imposing an additional cost on Jo.
Season 7 Episode 24 "Search Committee"
Microeconomic Behavior: Underlying Principles (D01) Job Vacancies (J63)
Buyout
Michael realizes that he is in a better bargaining position than he might have earlier realized. Even though his strategy is irrational because he should be desperate to sell, he takes a game theory optimal approach because David Wallace’s utility function does not match that of Dunder Mifflin as a company. We could also label this clip as a demonstration of the “Principal Agent Problem” because David is the principal acting on behalf of all Dunder Mifflin Shareholders.
Microeconomic Behavior: Underlying Principles (D01) Production and Cost (D24)