I just recently finished reading Michelle Obama's "Becoming" after being immersed in the hype of the book release and after seeing virtually every woman around me reading it. I am usually not a fan of autobiographies (except Bernie Sanders' one which was amazing, and Tara Westover's "Educated" which is one of the best books I've ever read) and the first chapter confirmed my apprehension. I have no idea how authors can authentically write about their childhoods and "remember" the tiniest details when I can't even remember what I had for breakfast. The book definitely picks up after she starts her career, changes her career, meets her now-husband (don't worry, I won't spoiler who it is) and authentically discusses various topics from politics to race and gender. It's a great book and everyone should read it, but this is not what the blog post is about. Instead, I am casually trying to illustrate a few economic concepts using my hunt for the next book as an example.
Let's begin with scarcity - one of our favorite concepts. Economics is all about scarcity. In this example, I am scarce on time. In between studying, adulting (doing laundry, cooking, buying groceries - it's exhausting) and studying (yes, again) you don't get a lot of time to read. If I had all the time in the world only for reading I wouldn't make such a fuss of finding the next book. After all, if the book I choose is not that good, it's no big deal because I'll be on the next book soon enough. I'm not only constrained on reading time but going out to buy the book will also chop some time out of my day. I won't order off amazon (at least I try not to), but lucky for me there is a book shop on campus so we can ignore that constraint. Lastly, I am also constrained by my budget, books are not cheap and if it's a hardcover you can expect to pay around £20 for a new companion. Again, we will ignore this constraint, because I have a gift card (isn't life wonderful?). So, my main constraint is reading-time. Because I am scarce on time, this makes the time that I do have to read very valuable. This is an important result in economics: scare resources are more expensive (or at least they should be, in theory)! This means I want to spend my time well, so I need to find a book that is worth my time.
Now, how do I make this decision? I have some general preferences over books. I prefer to read books that are not too thick (too much commitment) and I weakly prefer books written by women over those by men. Not saying I don't read any books written by men, but if there are two books that are equally likely to be good I'll choose the one written by a woman. I don't want to read anything too heavy, but I am generally indifferent between fiction and non-fiction. Lastly, I think you could say I'm slightly risk-averse in my book choices (risk-taking is for the summer break). This means I am more willing to read a book by an author I have already read or someone I have heard of. This still leaves me with an incredibly huge pool of potential candidates. So what to do? My main strategy is to look for recommendations. This brings me to my next economic concept - information.
Information is most we talked about in my Advanced Microeconomics course so this should be a great recap for the midterm. Information in economics is the reduction in uncertainty. Uncertainty in this context means that I don't know whether a book will be good or bad. Information might help me identify whether a book is likely to be good or bad and make a better decision. I already have some information, my information set will consist of the knowledge I already have of authors that I know are great writes and those who are not. Furthermore, I can make a judgment on how likely I think it is that a book will be either good or bad. New information can come from various sources, but the value of the information might be different. An example: Getting recommendations from the internet could be one source of information. I could look for the best reads of the year and pick a book from there. But compare this to me asking a friend.* The information my friend has to give is likely to have higher value because she knows me and has read similar books. One more component to incorporate here could be the reliability of sources in the past. Someone who has recommended a good book in the past might have more valuable recommendations**.
This was just one example, but the same thing could easily be applied to music, TV shows, movies, restaurants and so on. Economics offer structures to understand how we make our decisions and why a decision about which book to read next might be important enough to write a blog post about it (scarce time!!!). Either way, I hope you enjoyed this, but even more so, I hope that you have a good book recommendation!!!
* The combination of these two approaches is to look at recommendations by people I admire, thank you Bill Gates, thank you Barack Obama
**I wonder how you'd incorporate this in a theoretical framework.