Thursday, January 9, 2014

Contest: Guess that song


Market power and music may seem like strange bedfellows, but not in Prof. Carbonara's economics class.

Emanuela Carbonara taught intermediate microeconomics in the fall semester at SAIS Europe. Never one to rely on rote, Prof. Carbonara turned to music to help explain a fundamental concept.

In the "market power song contest", students were challenged to use the lyrics of pop songs to explain the ability of a firm to profitably raise the market price of a good or service over marginal cost.

As Prof. Carbonara put it in her directions to the class, find a song that captures someone who can "fix the price of a good, exclude others from a market, create market niches."

Students identified a bevy of songs whose lyrics touched on aspects of market power, which monopolies and oligopolies can leverage to raise prices without losing customers.

Morgan Graham won the contest by selecting an R&B song that was released in 2003 and offering this explanation of its connection to market power:

Prof. Carbonara
"Basically, she's offering a superior product. All customers seem to prefer it as it 'brings all the boys' and it's clearly 'better than yours.' However, she recognizes she's offering a superior product, so she decides 'to charge' a high price to exploit her customer's willingness to pay. Thus she is exercising her market power. Now there is no Market Regulation in this case; however, there could be. The government should enact a price ceiling to ensure customers are not being exploited."

Can you guess which song Morgan chose?

Send in your answer via a comment to this post or with an email to sais.eu.admissions@jhu.edu.

The first reader with the right answer will receive a Bologna Center tee shirt -- and Prof. Carbonara's autograph.

Nelson Graves

3 comments:

Clara Lillig-Wilshire said...

kelis - Milkshake!

Khadija Farah said...

The classic "Milkshake" by the R&B dairy queen, Kelis.

Nelson Graves said...

Five readers correctly named the song that Morgan Graham had chosen: "Milkshake" by Kelis. Well done. Devin Alessio, an undergraduate at Johns Hopkins in Baltimore, was the first with the right answer and wins the prize. Others with the correct answer were Aris Iliopoulos, Nicola Hil, Clara Lillig-Wilshire and Khadija Farah. Thanks to all for playing.

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