Friday, May 09, 2008

Not such a great deal 

By now most of you probably heard of the 23-cent-pizza promotion that Papa John's put up after one of its franchisees in DC printed "Crybaby 23" t-shirts for a Wizards-Cavaliers playoff game after Lebron James (#23 of the Cavs) was accused of whining too much about rough play and not getting foul calls. The lines stretched on for about three hours, leading some to wonder why people wait in line. If the pizza costs $12 normally and you wait three hours standing in line to pay $.23 for it, what's your implied wage? Matt Ryan argues that standing in line is not a cost of the pizza but part of the experience.
...sure, I had to wait in line for 3 hours to get a cheap pizza, but how can I possibly value being able to tell my friends for the indefinite future? I don't believe it's entirely separate from betting longshots at the racetrack-- the story has value, and maybe because it's indeterminate exactly how valuable it is, you end up with individuals massively mis-pricing it.
I don't know how it is we know it's mispriced, though. Any good that I purchase with unknown benefits has some ex post accounting of benefits and costs, but I don't usually call that some mistake in price. For example, I'm forced by my convalescence to listen to a lot more of my purchases on iTunes. (Embarrassingly, in the eight months since I bought my iPod, I have purchased over 150 songs. In this way, I've never grown up.) Some of them are fills for playlists I write, and often I've pulled them out as bad ideas after sinking my $.99 into the song. But this was true when I bought albums, 8-tracks, cassettes and CDs. And some I get a great deal on; I've ended up playing the absolute hell out of Neverending White Lights, which I kind of stumbled on one night and bought two CDs worth after hearing three songs. Are all of these misprices ex ante? I think not.

OB LeBron, who's playing against my C's right now: It's natural in most superstars' careers that they begin to expect some respect from the refs. I obviously didn't get much time to see the Wiz-Cav series, but roughing up the one superstar when the rest of the team looks suspect isn't unusual, and it challenges the league office to see if they'll blatantly cover for the superstar they wish to promote by suspending the other teams' hackers. (They did in this case.) The problem for LeBron against the C's is twofold. First, he is playing against a much better defensive team that uses its own semi-superstar (Pierce) to guard him. Second, he's encouraged to do this by his coach's constant whining about calls, and that coach's insistence on running a 1-4 set for LeBron at the top of the key, basically saying "here, drive by Pierce and then meet Mr. Garnett." LeBron can't expect calls there, and he knows it. It's nice to see there's one coach in the league worse than Doc Rivers. When the Cavs lose this series, Mike Brown should go.

And LeBron isn't even the worst whiner. I think someone vintner needs to market $.21 Timfandel.

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