Ask the Economist
Economics is the science of decision-making.
Every decision is an economics decision.
In this column every week, readers ask their most private questions and get advice from an economics perspective.
Q. Dear Economist,
I am planning a vacation and am wondering whether to be part of a tour group. Should I go it alone? – Indy
A. Dear Indy,
The people make the party. Everyone who you interact with can add to, or take away from, a trip. Their energy-level, the perspectives everyone brings and the priorities you share as well as the differences meld together to make the experience unique. Your decision on whether or not to go solo has to do with three economic principles. Risk aversion, consumption complementaries and game theory. You have many choices available as you plan your trip, but will have less control over the circumstances once your tickets are booked, reservations are made and the vacation is in full swing. It is understandable for you to have a sense of the risks you are taking as you plan. You hope the people you meet on your vacation will have compatible ideas of what makes for a great time so you will enjoy yourself too. Game theory reminds us that you can change your strategy if necessary during your trip to shape the experience and outcomes. Have a good time!
Q. Dear Economist, Paper or Plastic? – Bagger Vance
A. Dear Bagger,
I am a fan of reusable bags whenever practical, and recycling programs the rest of the time. But your question reminds me of the buyer behavior differences between payments with cash, credit/debit cards, or using your phone. Research indicates you may end up spending more money with credit cards than you would with cash. A number of studies have indicated that people do spend more when paying with a credit card. … They found shoppers spend up to 100 percent more when using their credit card to pay instead of cash.
Need Advice? Write to Ask the Economist at estenardhudsonian@gmail.com You might see your question answered in the Hudsonian!