Sharad pointed out that “after-Christmas sale” is a euphemism for “pre-Christmas price-gouging.” This is not an inefficiency if you include the utility of the retailers but from consumers’ perspective, it’s inefficient to concentrate demand around a single day of the year. Bah humbug!

I recently encountered an inefficiency related to holiday travel. Many outbound NYC flights were canceled the weekend before Christmas due to a snowstorm. People were generally rebooked a few days later. But on Monday everything was back to normal. I know because I flew out of New York on Monday. My aunt was supposed to fly out on Saturday but got stranded until Tuesday. She clearly wanted to depart on Monday more than we did. It’s a shame that there’s essentially no secondary market for airline tickets! (Though there is in a very limited sense: You can volunteer to be bumped and the airline will compensate you with travel vouchers, worth deceptively little. But naturally the airlines are not bumping willing travelers in order to rebook people sooner when their original flights were canceled.)

Another one: sometimes you can give someone something that he will enjoy but would have been embarrassed to get for himself. E.g., if Homer buys a bowling ball for himself (not as a gift), this sends a signal to others that he cares more about bowling than about his family — a signal he may be reluctant to send. However, if Marge buys Homer a bowling ball, Homer is “off the hook” — he couldn’t help getting the bowling ball, plus there is a signal that Marge thinks Homer is a good father who deserves a break, which is part of the present.

of all the poser economists, you are my second-favorite. Let’s pose together sometime. Happy new year.

Jeff