Larry David and Jerry Seinfeld as Economists

I have been watching the first season of Larry David’s “Curb Your Enthusiasm,” and his influence on Seinfeld is apparent. He, too, focuses on the ordinariness of everyday life, although giving it a more absurd spin.

It struck me after watching a few of these half hour episodes that Larry David and Jerry Seinfeld would make pretty good economists. Maybe not great ones (and here), but very good ones for sure. Why? Because they have a knack for observing the ordinariness of everyday life and then exposing some obvious trait of the ordinary that most people tend to overlook . For example, they delve into the wholly inconsistent policy of car rental companies accepting reservations and then not having a car available when the customer arrives. They expose the arbitrariness of class distinction that influences an airline employee’s decision about which passenger to bump to first class. And they seem to differentiate between self-interest and selfish interest, and show us why seeking the latter is inevitably detrimental to our happiness.

What made the show, Seinfeld, funny was that it made you pause and realize the absurdity or arbitrariness of ordinary and everyday behavior; behavior that we normally tend to overlook. We laugh because it focuses on the things we see everyday but fail to really observe. They simply made light of it and we'd chuckle and say, "Oh yeah, I do that." or "Why do people act that way?"

Here are just a few Nobel Laureates in economics and the reasons offered for their recognition. Although some may seem obvious or even trite, such insights were overlooked until these laureates pointed it out and thus changed the way economists have come to model and understand human behavior.

George Akerlof: Asymmetric information encourages cheating. Yes, he did go further and claim that in the extreme affected markets potentially fail, but I believe that that is overstated.

James M. Buchanan: People act in their self-interest in public markets just as they do in private markets. How obvious, yet it wasn’t until after Buchanan and Tullock published their 1962 book, The Calculus of Consent, that economists quit accepting outright that market failure could be efficiently resolved by politicians and bureaucrats.

Ronald Coase: When transactions costs are zero, parties to an exchange will bargain away all costs and benefits. A gross misinterpretation, yet a common misinterpretation, of Coase’s theory. In effect, Coase was simply stating that there is no reason to believe that when an externality arises that politicians and bureaucrats have any better information necessary to resolve an externality than the private parties involved in the exchange.

Michael Spence: Since information is costly, job applicants may be required to signal their superior qualities to prospective employers.

Milton Friedman: People’s consumption plans are based on their expected lifetime (permanent) income and not decided on a daily basis (transitory).