Gains from trade

I'll try to do a books post by mid-next week, to wrap up the Christmas recommendations. But of course, you already know that you should own Discover Your Inner Economist, Tyler Cowen's brilliant opus on applying economic principles to everyday life.

There are so many areas in which one's life could be made infinitely better by the application of basic economic principles. For example, everyone has been in the position of awaiting a much-desired, but highly uncertain, outcome: finding out whether you got a coveted job, perhaps, or waiting to see if the person from that awesome first date calls you back. Why not hedge your net psychic wealth a little? Find an amenable friend, and bet against the outcome you desire. That's what friends and I did in graduate school with permanent offers from our summer internships: anyone who got an offer had to kick in $75 for those who didn't.

This did not, of course, erase the pain of those who didn't get permanent offers. But it did soothe it a little; the disappointment of "they hate me" was replaced with the sudden realization that you had a few hundred dollars to blow on something frivolous. Meanwhile, those who got a job had multi-thousand dollar signing bonuses, against which the pain of the lost $75 was invisible.

Recently, I have also been experimenting with bacon offsets. As longtime readers know, I only eat certified humane meat. This creates certain problems when I am invited to brunch or a weekend at someone's house, and they have thoughtfully provided me a meal laden with juicy, delicious, inhumanely raised and slaughtered bacon.

Luckily, the first time this happened, my friend Matt swooped to the rescue. Matt buys a lot of bacon, but has so far resisted my blandishments to purchase the certified humane kind. However, if I eat bacon out, Matt has agreed that the next time he buys bacon, he will buy the certified humane kind, and let me pay him the difference between its cost, and the cost of the regular bacon. This way I get to be a good guest, and the net amount of animal suffering in the world doesn't rise . . . indeed, it falls slightly, because the going rate is one pack per outing, and I don't eat a whole pack of bacon. Even nicer, the last time I went to brunch at someone's house, they bought "hippie bacon" rather than force me to excercise my offset option.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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