The Economics of The Office
Learning economics from the world's best boss
Performance Review
In this clip (found only on the deleted scenes sadly), Dwight attempts to justify the raise he feels he deserves. Dwight correctly identifies the relationship between inflation and his real wage. If Dwight’s nominal wages do not increase at least at the rate of inflation the real purchasing power of his wages will fall!
Season 2 Episode 8 "Performance Review"
Compensation Packages (J33) Inflation (E31)
Commission Cap Part 1
Jim loses his incentive to work when corporate institutes a cap on commissions.
Season 7 Episode 9 "WUPHF.com"
Microeconomic Behavior: Underlying Principles (D01) Compensation Packages (J33) Wage Level and Structure (J31)
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)
Search Committee Part 1
The office puts together a search committee to hire a new boss. One candidate (played by Warren Buffet), negotiates for a higher wage and then asks about job perks. A good example of bargaining and the principal-agent problem that arises in the workplace.
Season 7 Episode 24 "Search Committee"
Wage Level and Structure (J31) Compensation Packages (J33)
Commission Cap Part 2
After Jim loses his incentive to sell, he looks for other ways to fill his time. A good example of incentives.
Season 7 Episode 9 "WUPHF.com"
Microeconomic Behavior: Underlying Principles (D01) Wage Level and Structure (J31) Compensation Packages (J33)
Commission Cap Part 3
After Jim loses his incentive to sell, he starts bothering his colleagues looking for ways to kill time.
Season 7 Episode 9 "WUPHF.com"
Microeconomic Behavior: Underlying Principles (D01) Wage Level and Structure (J31) Compensation Packages (J33)
Commission Cap Part 4
After Jim loses his incentive to sell, he pranks Gabe.
Season 7 Episode 9 "WUPHF.com"
Microeconomic Behavior: Underlying Principles (D01) Wage Level and Structure (J31) Compensation Packages (J33)