The Economics of The Office

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.

Season 5 Episode 18 "Broke"

Microeconomic Behavior: Underlying Principles (D01) Production and Cost (D24)

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