Bread for the Ducks, Saving Money with David Waterman, Brown Bag

Bread for the Ducks, by Ken Rosenberg

A career-bound academic has to learn to master three realms of work: teaching, research, and the glut of work-like things that threaten to overtake the other two—like attending meeting, reviewing papers, and writing letters of recommendation. Annie structured the class to simulate that latter third, which she equates to “being nibbled to death by ducks.”

To “feed the ducks” and satisfactorily simulate a functioning department, Annie Lang’s class T540: The Compleat Academic – The History and Practice of Academic Life had to assemble a panel and an audience for a mini-conference that featured their papers. The result? Understanding Academic Freedom: History, Purpose, Threats, and Successes.

The discussion went for almost the entire hour allotted to the panel, which was comprised of the following scholars:

Mary Gray of Department of Communication and Culture

Ted Miller of School of Public and Environmental Affairs

Eric Rasmusen of Kelley School of Business

Herb Terry of Department of Telecommunications

You can listen to the panel discussion by clicking here: Understanding Academic Freedom – Panel Discussion

IU has much to be proud about its record on academic freedom.

The panel (from left to right): Herb Terry, Mary Gray, Ted Miller, Eric Rasmusen

Saving Money with David Waterman, by Mike Lang

Have you ever sat at your computer day after day hitting refresh on sites like Orbitz or Priceline waiting to pounce on the cheapest airfare for your next conference? Have you ever found yourself screaming at some poor cable customer service rep threatening to cancel if they don’t give you free HBO? Have you ever been sprawled out on the living room floor, buried up to your neck in newspapers, clipping coupons with the determination of a football player on 4th and 1st? If you answered yes to any of the questions, you are probably a low value consumer, and that’s not a bad thing. David Waterman, our department’s resident economist, is a low value consumer and he’s proud of it. As a low value consumer, Waterman has learned the tricks of the trade when it comes to saving money and he has been gracious enough to fill us in on the details.

As an economic principle, low value consumers arise from the practice of price discrimination.  As Waterman explains, price discrimination entails charging different prices to different consumers according to their willingness to pay. High value consumers tend to be less price sensitive, and will sometimes pay higher than the sticker price for the product they want. Low value consumers, who are much more price sensitive, try and purchase the product for the lowest price possible. As an example, my old roommate always bought brand new video games at full retail, and would occasionally splurge for the expensive deluxe/special/awesome edition for upwards of $100. Price didn’t matter as much to him. While he waited outside of the game store at midnight, I hunted around looking for a coupon or a deal or a used copy or cheaper game at a lower price. Price mattered, and if I could find my game for $5 cheaper somewhere else, I was there. When it comes to video games, I’m a low value consumer. At the heart of the high value/low value consumer dynamic is a struggle over time. High value consumers don’t spend time doing price research and pay higher prices as a result. Low value consumers spend the time in order to find the best deal.

High Value Consumer: “I got a Jeep with my copy of Call of Duty! for $30K!!”
Low Value Consumer: “I rented my copy from Redbox for $1…”

However, low value consumers are not less important consumers. Every firm is interested in making a sale as long as it can cover the incremental cost of providing the next product. Sure, my roommate may fork over $100 for his version of the game, and I might only fork over $20 for my version 6 months later, but the firm makes money in both circumstances, and my $20 is much better than zero dollars.

One of the primary areas where low value consumers thrive is cable subscriptions. Like most of the media industries the majority of the costs in providing cable subscriptions is in the production of media content. As such, hooking up one more house to the network, or enabling HBO for one more customer costs next to nothing. When that cable bill starts stretching the wallet a bit too far, calling up the company and making a persuasive argument about dropping its service or switching to a competitor immediately identifies you as a low value consumer, and can often result in reduced rates or free content. The cable companies retain your service, and make more than the cost of providing you with content.

However, cable companies are savvy when dealing with low value consumers. In many cases, when low value consumers identify that they don’t want premium channels like HBO, cable companies may enable those channels regardless, even though they won’t charge you. From their perspective, two things may happen. One, in rare cases, the consumer may get attached to the channel, and when it gets cancelled, they will choose to upgrade their package. Two, it encourages low value consumers to keep their subscription. In other words, when low value consumers think about switching, the value added to the package by the free HBO may keep them from switching to a competitor. However, coercing cable companies into cheaper rates requires some care. Because most deals are temporary (cheaper service for 6 months), it’s important to look long term. At some point the cable companies will try and get low value consumers to pay up.

Seriously, who doesn’t want to watch HBO’s Game of Thrones for free?

TLC has popularized couponing in their television show, but in many cases, consumers can go beyond the coupon. Sales and coupons at grocery stores work in cycles. An item may be on sale for a week, and then go back to retail price. During that retail period, stores often offer coupons for those who still want the sale price. However, stores don’t all follow the same cycle. In one region (Indianapolis for instance), an item may be at full retail, with a coupon being offered. However, in another region (Bloomington), the item may be on sale. By cutting coupons from Indianapolis, and using them in Bloomington, groceries get really cheap, really quick.  However, this method requires access to out of market coupons, but that’s what friends and family are for, particularly for the cash strapped.

Another area to save money is books, particularly when visiting websites like Amazon. Book prices change frequently, sometimes from hour to hour on big book sites like Amazon, and Barnes & Noble. In some cases the book will ping pong between a high price and a low price. High value consumers in their haste to purchase the book may stumble upon the high price and pay more or they may stumble upon the low price and get a deal, while low value consumers will wait for it to drop to the low price. When the new semester rolls around, wait long enough to watch the price fluctuations and you might just save some money.

Sometimes it pays to embarrass yourself a little bit, particularly when it comes to specialty shops. Using dive shops as an example, Waterman tells me that in many cases high value consumers will walk away with lots of equipment at sticker price but experienced divers who regularly visit the shop are more price sensitive. As a result, the shop offers discounts to those customers. Sometimes they may have discount cards, and other times the system is informal. Either way, asking for the discount will occasionally save you some green.  If it doesn’t embarrass you, it doesn’t hurt to ask.

Hey girl, Can I get the discount?

Price discrimination practices are everywhere from airlines to movies to groceries and identifying yourself as a low value consumer can often save you some money if you are willing to spend some of your time. For those with lots of time, low value consumer practices can fill time productively while saving money. For people like us grad students who are both time strapped and broke, well, we knew what we were signing up for.

In the spirit of saving, we have included our own coupon: A free joke from funny man Reed Nelson. Just print it out, cut it out, and find Reed for a side-splitting good time.

Brown Bag

David Weaver and Lars Willnat gave a special presentation and sneak preview of their forthcoming book The Global Journalist in the 21st Century, which will be coming out in May through Routledge. Professor Emeritus Cleveland Wilhoit was also on hand to answer questions about previous research he and Weaver conducted.

From the publisher:

The Global Journalist in the 21st Century systematically assesses the demographics, education, socialization, professional attitudes and working conditions of journalists in various countries around the world. This book updates the original Global Journalist (1998) volume with new data, adding more than a dozen countries, and provides material on comparative research about journalists that will be useful to those interested in doing their own studies.

Weaver and Wilhoit put together this collection (covering 33 nations around the world) working under the assumption that journalists’ backgrounds, working conditions and ideas are related to what is reported (and how it is covered) in the various news media round the world, in spite of societal and organizational constraints, and that this news coverage matters in terms of world public opinion and policies.

As the most comprehensive and reliable source on journalists around the world, The Global Journalist will serve as the primary source for evaluating the state of journalism.”

Audio from last Friday’s seminar can be found here: Brown Bag (April 20, 2012 – Weaver and Willnat)

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