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Seinfeld Economics: The Contest
by Linda Ghent `

Cost-benefit analysis involves, whether explicitly or implicitly, weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option. Rational agents are assumed to never take an action for which the expected benefits are less than the expected costs.

The rate of time preference pertains to how large a premium a consumer places on enjoyment nearer in time over more remote enjoyment.

 

This Commentary is related to the following Clips:
Seinfeld: The Contest by Larry David & Jerry Seinfeld (1992) George, Jerry, Elaine, and Kramer have a contest to see who can refrain from an unnamed activity the longest. Each posts a bond that they will lose if they are among the first three to indulge. Kramer makes it about 12 minutes. Elaine makes it a day or two.