A painful dilemma over how high to set prices

Interesting economics spin around the unadvertised short cappuccino at Starbucks by Slate.

The practice is hundreds of years old. The French economist Emile Dupuit wrote about the early days of the railways, when third-class carriages were built without roofs, even though roofs were cheap: “What the company is trying to do is prevent the passengers who can pay the second-class fare from traveling third class; it hits the poor, not because it wants to hurt them, but to frighten the rich.”

I continuously maintain that we should be introducing basic, basic economic lessons to our kids earlier and earlier. It’s so critical to understand incentives. Especially how people manipulate things in response to to said incentives.