I love Seinfeld, the TV show from the ‘90s. I was born after the show stopped airing, and I admit there are many other references I don’t get (most of my knowledge of New York City in the ‘90s comes from another show - FRIENDS), but it’s the funniest TV show I have watched. It’s hilarious! All the characters are equally funny. The writing is brilliant. The acting is top-notch. But these don’t explain why I love the show as an economist.
Turns out — I’m not the only economist whose interest was piqued by the show. Avinash Dixit has a paper, “An Option Value Problem from Seinfeld”, which has my favourite abstract of all time — “This is a paper about nothing;” Linda S Ghent and Alan P Grant have a Routledge book, “Seinfeld and Economics: Lessons on Everything from the Show about Nothing”; and there’s an entire website, “yadayadayadaecon.com” devoted to making clips available for use to teach economics lessons. The excellent economics newsletter, Economic Forces, also frequently employs Seinfeld memes.
And of course, there’s also this meme (with over 12k likes!)
After forming the hypothesis that economists love Seinfeld (based on the Jadrian Wooten post, Economic Forces newsletter, Dixit’s paper, and my own experience), and confirming it through the book and the website which I discovered only recently, I set out to find causal explanations.
First, so much about Seinfeld is talking about the way institutions shape their behaviour and informs their choices. As early as the pilot episode (S1), Jerry Seinfeld, the protagonist, and his friends George and Kramer are trying to disentangle the signals that a girl (that he could potentially be with) is sending him and what they might mean giving the contextual settings. George tries to explain to Jerry, that he can infer what the girl is thinking based on how she greets him at the airport — ranging from a handshake being bad to a hug or anything in the lip area being good, and a “hand-sandwich” somewhere in between. And they’re left dumbfounded when the girl chooses a greeting they did not expect at all! Bryan Caplan’s “I Want to Hold Your Hand” is written on a very similar theme:
There are many other instances where the characters, in the face of uncertainty, rely on social cues, traditions and customs, decide what the “appropriate” behaviour would be.
Second, often, the characters embody the homo economicus perfectly! As the Ghent & Grant book also recognizes, the characters paint themselves as some of the most self-interested individuals (and not in the Adam Smith’s TMS sense)! But I would go a step further — they are characters who don’t really evolve much over time! The Seinfeld mantra was “No Hugging, No Learning”. Perhaps Stigler & Becker would also have loved Seinfeld, given as they wanted to do economics where they assume that tastes (or preferences) do not vary much over time.
In these instances, the characters actually attach very little weight to how others in the society would respond to their actions. George buys cheap envelopes for his wedding invitations that end up killing his fiancé (The Invitations, S7). Jerry snatches away bread from an old woman. Seinfeld's characters frequently engage in humorous cost-benefit analyses, evaluating the pros and cons of various actions. I love the example that Dixit uses in his paper, where due to a scarcity of her preferred contraceptive (The Sponge, S7), Elaine now needs to decide whether to sleep with a person based on their “sponge-worthiness”.
Most examples on “The Economics of Seinfeld” website would perhaps flow from this reason.
Third, we get to see some hilarious effects of hindering market transactions. Rent controls lead to Elaine bothering a grieving widower at a funeral to ask about the apartment (The Pony Remark, S2). Kramer buys powerful showerheads in the black-market, when there are regulations on the flow of showerheads (The Showerhead, S7). Kramer, who wants some Cuban cigars, goes to the Cuban embassy where he trades his jacket for cigars with Cuban diplomats (The Cheever Letters, S4).
My primary reason remains that the first, that it’s a hilarious show to think about how institutions, particularly informal ones, shape individuals interactions (in the market and as members of the society). I find it interesting that there is no mention of institutions on The Economics of Seinfeld website, although they discuss some related concepts.
If you haven’t watched Seinfeld yet, I recommend you put your Netflix subscription to some use for it! Or, if you have already watched it, perhaps now see it through the eyes of an economist. I’m hoping Seinfeld references do not become obsolete when I become a “Male economics professor in my 30s”. Future students, be prepared!
Great references. Another show very popular with economists is The Wire.