05. Robert H. Frank, Johnson Graduate School of Management
Robert Frank
The Economic Naturalist: In Search of Explanations for Everyday Enigmas (Basic Books, 2007). Frank presents basic economic principles in a most fascinating and fun way. He uses questions from everyday life to explain how economic principles govern our world: Why do the keypads on drive-up cash machines have Braille dots? (Because it is cheaper to make the same machine for both drive-up and walk-up locations.) Why are round-trip fares from Orlando to Kansas City higher than those from Kansas City to Orlando? (Because Kansas City travelers are usually price-sensitive tourists with many choices of destination, whereas travelers originating in Orlando typically choose Kansas City for specific family or business reasons.) Why do brides spend so much money on wedding dresses they will wear only once, while grooms rent tuxedos although they will have future occasions to wear one? (Because most brides want to make a fashion statement. Rental companies would have to stock 40 to 50 distinctive dresses in each size, so the company would have to charge more than the purchase price of a dress to cover its cost since each dress would be rented infrequently.) Frank also covers key ideas such as the cost-benefit principle, the no-cash–on-the-table principle, and the law of price.