Saturday, November 7, 2009
Theory Meets Reality
When I try to explain in my Intro to IR class that how we interact affects our choices--that the processes through which we interact influence the frequency, the costs/benefits, of the interactions. I try to illustrate this with barter vs. credit cards. But this story does a nice job of illustrating how a cash economy vs. credit card economy makes a big difference. In short, the city of NY forced the cab companies to take credit cards, which they resisted for a variety of reasons, but it has meant that more people are taking cabs, increasing their business, because the transaction is fast, easy, track-able, and delays the actual bill ;).