Prediction markets allow people to bet on future events, from elections to economic data releases, with prices reflecting the crowd’s expectations. Economists often view them as powerful forecasting tools because participants have money at stake, which can lead to more accurate predictions than traditional polling. But these markets also raise concerns about manipulation, insider information, and ethical questions about what events should be traded. Together, we explore both the promise and the risks of prediction markets.

In this episode, we talk about:

* What prediction markets are and how event contracts work

* Why prediction markets often outperform traditional polling

* The role of incentives and “skin in the game” in improving forecasts

* The potential for insider information or manipulation in these markets

* Whether prediction markets should be regulated like gambling or financial markets

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This Week’s Drinks 🍻

We’re checking in together a little earlier than normal since we each have Spring Break trips coming up soon. Matt brings a Ring the Bell American Lager from Conshohocken Brewing Company. In a rare day when he has an IPA and Matt does not, Jadrian opens Liftoff, a West Coast IPA from Daredevil Brewing Company in Indiana, courtesy of a colleague who brought beers to JETSet.

Name That Stat 📊

Jadrian shared the number of companies that have filed lawsuits against the federal government seeking tariff reimbursements after a recent Supreme Court ruling. Matt followed with a second number that sparked today’s conversation: the amount a tax economist bet on a prediction market that last year’s DOGE push wouldn’t meaningfully reduce federal spending.

Show Notes

Matt’s contribution helped us set up a broader discussion of prediction markets. These platforms allow participants to buy and sell contracts based on the outcomes of future events. Contracts usually trade between zero and one dollar, paying out one dollar if the event occurs and nothing if it doesn’t. In practice, the price reflects the market’s estimate of the probability of an event happening. These markets cover everything from elections and economic indicators to corporate decisions and sports outcomes.

The tax economist in the story reportedly wagered his life savings that federal spending would remain high despite political pressure to reduce it. His reasoning was grounded in a simple economic insight: entitlement programs make up such a large share of federal spending that short-term policy pushes are unlikely to meaningfully reduce overall expenditures. The bet paid off and illustrates how people with specialized knowledge can profit when they believe markets are mispricing an outcome.

We also discuss why economists have long been fascinated by prediction markets. Unlike opinion polls, participants have money on the line, which encourages them to reveal their true beliefs. This “skin in the game” helps prediction markets aggregate information across many individuals and often makes them surprisingly accurate. Some companies have even experimented with internal prediction markets to forecast sales or project outcomes, sometimes outperforming traditional forecasting methods.

Of course, prediction markets also raise difficult questions. If someone has inside knowledge or the ability to influence an outcome, they could potentially manipulate the market. Examples range from bets about public speeches to speculation about political behavior. These situations blur the line between information discovery and market manipulation.

That leads to the broader policy question: how should prediction markets be regulated? They sit somewhere between gambling and financial markets, and it’s not always clear which rules should apply. Some regulation may be necessary to prevent manipulation or insider trading, but too much could eliminate a tool economists believe provides valuable information about future events.

If you could create a prediction market about anything, what event would you want people betting on?

Pop Culture Corner 🍿

Jadrian contributed a clip from an Anderson Cooper segment highlighting a man who spent hundreds of dollars trying to win an Xbox at carnival games, but eventually drained his life savings in the process. It should be seen as a cautionary tale about gambling and risk-taking.

Matt shares a short clip from a YouTube creator who bets $100 per day on different events in prediction markets. In the clip, the bettor wagers that a State of the Union speech will last longer than 115 minutes and nervously watches the speech unfold as applause and interruptions stretch the clock. The bet ultimately loses when the speech ends just short of the target time.

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A recent headline claimed that Canada’s GDP per capita has fallen below Alabama’s. That sparked a broader conversation about what GDP per capita actually measures and why it can change in surprising ways. We explored possible explanations, including immigration patterns, post-pandemic growth differences, and policy environments. Along the way, we asked a bigger question: what really drives long-run economic growth?

In this episode, we talk about:

* Why GDP per capita in Canada now trails Alabama’s

* The difference between GDP per capita and median income

* How immigration can lower averages even if individuals are better off

* Why U.S. GDP per capita has grown steadily since 2020 while Canada, Germany, and the U.K. have stalled

* Whether pro-growth business climates actually explain the recent divergence

* How stereotypes about “poor” regions can lag behind economic reality

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Show notes & references

We’re nearing the halfway point of the semester, which is a great time to check in with each other. Matt has been working on international initiatives, and Jadrian has been deep in the redesign of his sports economics course. For drinks this week, Matt just returned from a trip to Cyprus and brought back a Shockwave Pale Ale from a small bottle shop. Unfortunately, the pint glass didn’t survive the trip home. Jadrian opted for a Blackberry Lemon Shandy from Rusty Rail, courtesy of a friend in State College.

Our data point challenge this episode started with how long it’s been since the U.S. men’s hockey team last won gold at the Winter Olympics. Matt followed that up with two numbers that sparked today’s main topic: Canada’s GDP per capita compared to Alabama’s.

From there, we unpacked what GDP per capita actually measures. It’s an average, and averages can move in ways that don’t always reflect individual well-being. We compared this to U.S. median household income data from FRED, which can tell a very different story than GDP per capita. The distinction between median and average matters, especially when population changes are involved.

We also looked at recent trends across other developed economies. While U.S. GDP per capita has steadily increased since the pandemic dip, Germany and Canada both saw initial rebounds followed by declines in the past few years. The United Kingdom experienced a similar bounce but has been largely flat more recently. That raises a broader question: what explains the divergence?

So what can (and can’t) GDP per capita tell us about well-being? There’s a straightforward “math story” here. Even if everyone in a country is better off than they were before, averages can fall if the population grows quickly and new workers enter at lower wages. True statistics can still be interpreted in misleading ways.

We also spent time discussing two popular measures of economic freedom: one from the Heritage Foundation and another from the Fraser Institute. According to the Heritage Foundation’s index, Canada has ranked higher than the U.S. in recent years. That gap may be influenced in part by trade policy uncertainty in the United States, though the full story is more nuanced.

While much of our focus was on what might be happening in Canada, we also asked whether Alabama deserves more credit. Cities like Huntsville have worked hard to attract business investment and lower unemployment. The authors of the original article traveled to Alabama expecting one story and came away with another. Stereotypes about regions can linger long after the underlying data changes.

If you’re in Canada or Alabama (or Germany, or the U.K.), we’d love to hear your perspective. What are we missing?

Pop Culture Corner 🍿

Matt brought up an example of creative destruction, one of the key forces behind long-run income growth. In a classic Friends episode, Joey flips through the Yellow Pages to find a guitar instructor. At the time, those thick books were a household staple. Today, they’re mostly obsolete, replaced by web searches, Yelp, and online directories.

Jadrian chose a classic South Park episode that a graduate student recently shared with him. In the scene, immigrants from the future arrive in town and begin undercutting local wages. Residents storm a city council meeting to complain that the newcomers are “taking their jobs” and demand action. It’s exaggerated, but it highlights a real economic tension around immigration, wage competition, and public perception.

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We’re joined by Doug McKee to talk about how economists can use assessments and experiments to improve teaching and learning. Doug explains how learning assessments can reveal what students actually understand, not just how they feel about a course. We also discuss the Economic Education Network for Experiments (EENE) and why large, multi-institution studies matter for credibility. Our conversation highlights how economics classrooms can double as powerful research labs for understanding learning itself.

In this episode, we talk about:

* Doug’s path into economics teaching and education research

* Why student learning assessments matter more than course evaluations

* How Cornell built a culture around prerequisite and skills-based assessments

* The origins and goals of the Economic Education Network for Experiments (ENEE)

* Using large, multi-school experiments to test what really works in the classroom

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Show notes & references

We’re joined this week by Doug McKee, a senior lecturer in economics at Cornell University and one of the leaders behind the Economic Education Network for Experiments. He’s keeping it simple with high-pulp orange juice, while Jadrian braces for another impending snowstorm with a Dark Starr Dry Irish Stout. Matt has logged in with a flight of beers from the back booth at East End Brewing Company in Pittsburgh.

Our data point challenge this episode focused on the age of Trump’s most recent announcement regarding the next potential Chair of the Federal Reserve, the number of undergraduate students enrolled at Cornell University, and the number of people who have been killed by ICE agents in Minneapolis so far this year.

Doug kicked off the show by sharing his fairly unconventional path into economics education research. After becoming frustrated with the traditional publication process, he realized that he couldn’t stop thinking about teaching. That shift eventually led him to Cornell, where institutional support made it possible to treat teaching as a serious research agenda.

A big part of his research agenda involves measuring what students actually learn. Doug has helped Cornell faculty work together to clearly define learning goals and then build assessments around them. Instead of relying only on student evaluations, these tools provide concrete evidence about which skills students gain before and after course redesigns. The assessments started as internal tools and eventually became the foundation for larger studies across institutions.

By pooling data from many courses and universities, researchers can separate what works in one classroom from what works more generally, across different student populations and institutional types. This motivation led to the creation of ENEE, a collaborative network that allows instructors to run coordinated experiments in real classrooms. Doug walks through current projects, including studies on team contracts in group work and earlier work on AI and classroom practices.

If you could run one large-scale classroom experiment across many universities, what question would you want it to answer?

Pop Culture Corner 🍿

Jadrian shared a clip that was sent his way earlier in the week by Charlie Ben-Nathan, an economics educator in London. The clip comes from Yes, Prime Minister and highlights the economic logic behind cigarette taxes, healthcare costs, and unintended consequences. It’s a great illustration of the tradeoffs policymakers face, especially when dealing with goods that generate externalities.

With award season underway and the Oscars approaching, Matt took the opportunity to revisit La La Land. A decade after its release, the film still holds up for its music and storytelling, and it turns out to be surprisingly useful for economics examples as well, including ideas like search costs.

Doug recommended Ninth House, an adult dark fantasy novel set at Yale and centered on the university’s secret societies. The book blends dark magic, murder, and elite privilege, and it’s written by an author with deep familiarity with Yale’s campus and lore. It makes the setting feel especially vivid for those with New Haven connections.

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This episode looks at a JPMorgan survey of billionaires and what it reveals about how the ultra-wealthy think. We talk about their biggest fears, especially the fear of losing wealth, even when they have more money than they could ever spend. The conversation connects those fears to ideas from behavioral economics like loss aversion and risk tolerance. Along the way, we ask whether having more money actually makes people more cautious rather than more daring.

In this episode, we talk about:

* How many billionaires exist, and what their combined wealth adds up to

* What a JPMorgan focus group reveals about billionaire fears and priorities

* Loss aversion and why losing money feels worse than gaining the same amount

* Whether extreme wealth makes people more risk-averse in investing decisions

* The habits billionaires credit most for their success, and what actually matters

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Show notes & references

The semester is back underway, so we start with a quick check-in after the first week of classes and all the energy associated with students back on campus. Jadrian is recording from his campus office with a Coke Zero in hand, while Matt is sipping a classic Moscow mule.

This episode’s data point analysis begins with the cost of a 30-second Super Bowl commercial this year: a staggering $8 million. For context, the average ad spot first crossed the $1 million mark back in 1994. We also briefly talk about how Netflix pulled in $1.5 billion in advertising revenue last year before landing on the number that drives the main conversation: there are currently 3,028 billionaires worldwide with a combined net worth of about $16.1 trillion.

Have you ever wondered what billionaires think about the economy, the future, or life more broadly? Wonder no longer. JPMorgan Bank surveyed billionaires on exactly these questions, drawing insights from 111 billionaire principals across 28 countries and more than 15 industries. Peter Coy (Economics for Everyone) helpfully summarized the findings on his Substack. One result stood out in particular: some of these billionaires (especially those who inherited their wealth) say they’re genuinely afraid of losing it all.

That fear opens the door to a broader behavioral economics discussion. How does loss aversion work when “1%” translates into tens of millions of dollars? Is there a meaningful difference between thinking about losses in percentage terms versus absolute dollars? And if someone suddenly became a billionaire, would they take more risks or actually become more cautious? It’s a useful reminder that risk tolerance can change with both income and life experience.

We wrap up the episode by walking through the list of “success habits” identified in the billionaire survey: reading, exercise, consistency, waking up early, prioritizing tasks, goal setting, and deep thinking time. The big takeaway is that consistency may be the hidden engine behind all the rest. None of these habits matters much if they’re tried once and quickly abandoned.

If you had to pick one habit from the list that’s helped you the most, which would it be? We’d love to hear in the comments.

Pop Culture Corner 🍿

Matt shares a clip from Hard Knocks where NFL player Carl Nassib passionately tries to teach his teammates about the glory of compound interest. Matt also quickly recommended The Simple Path to Wealth as a straightforward, low-stress introduction to personal finance and investing.

Jadrian shares a scene from Brooklyn Nine-Nine in which Gina returns from maternity leave and jokes about juggling work and a newborn. Her punchline: juggling must be easy because if it were hard, there would be rich jugglers.

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Ticket prices are in the spotlight as the NCAA football championship and the upcoming World Cup push demand to extremes. We dig into why resale markets exist, why prices can explode, and why face value often has little to do with what fans actually pay. Using real examples from college football, the World Cup, and concerts, we talk through supply, demand, and who really benefits from ticket resale. Along the way, we wrestle with whether there’s a “better” system or if frustration is just part of the market.

In this episode, we talk about:

* Why national championship tickets can cost $3,000 before teams are even announced

* How World Cup ticketing systems create confusion, scarcity, and frustration

* The role of resale platforms like Ticketmaster and StubHub in shaping prices

* Why events often underprice tickets initially and let secondary markets take over

* Whether there’s a better way to price tickets without banning resale or rewarding bots

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Show notes & references

Jadrian checked in from Pittsburgh, where a hotel stay unexpectedly came with complimentary nightly drinks. He enjoyed The Oaklander, a hazy IPA brewed by Two Frays Brewery. Matt stuck with a Bud Zero as part of “healthy January,” and shared some updates on cutting snacks, eating better lunches, and trying to keep habits sustainable during the semester.

This week’s data point analysis featured a look at how large language models like ChatGPT have changed the way programmers use Stack Overflow. The number of questions posted on the site has collapsed from hundreds of thousands per month to just a few thousand last month. Matt’s contribution helped form the basis of this week’s post by offering up a headline claiming that the 2026 World Cup would generate $47 billion in economic impact. We’re skeptical.

With several major sporting events approaching, ticket prices have become a natural case study in supply and demand. The upcoming NCAA football championship tickets are pushing past $3,000 on verified resale sites, even though we don’t know which teams will be in the game. Tickets for the semifinal games can still be found for under $200. Same sport, same stakes, wildly different prices.

Even with really high prices, sometimes the sellers require buyers to jump through several hoops to secure tickets. Matt shared a firsthand account of navigating FIFA’s multi-step ticketing process. Buying the “right to buy” tickets, long before matchups are known, highlights how firms profit from scarcity. While the experience may be memorable, the system itself feels opaque and, at times, deliberately confusing.

So, why don’t leagues and artists just charge the market-clearing price up front? Drawing on research by Eric Budish, we explore explanations ranging from public relations concerns to atmosphere effects. Teams may want “true fans” in the seats, not just the highest bidders. There’s also the uncomfortable possibility that venues and platforms benefit from resale fees changing hands multiple times.

The episode wraps with a broader question: is there a fix? Verified fan systems, limits on resale, airline-style non-transferable tickets, and even UK-style resale bans all come with tradeoffs. In the end, the market mostly works, but not without frustration, high fees, and the lingering sense that the wrong people are capturing too much of the value.

What’s the worst ticket-buying experience you’ve had, and why?

Pop Culture Corner

Jadrian went with a classic episode from The Simpsons centered on ticket scalping. Homer waits in line for several days to buy tickets, but gets shut out by a buyer who grabs all remaining tickets. He’s left to purchase much higher-priced resale tickets later.

Matt highlights a student-led project analyzing game theory in Bridgerton. The video breaks down strategic decision-making in how Daphne and Simon’s relationship can be modeled with multiple possible Nash equilibria.

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To kick off Season 4, we reflect on our personal and professional journeys over the past year. We discuss the challenge of sticking to goals like healthier living and academic productivity, sharing what worked and what didn’t. Along the way, we talk about prediction markets, resolutions, teaching in the age of AI, and how faculty think about setting goals under uncertainty.

In this episode, we discuss:

* What prediction markets say about the probability of a recession, and why those forecasts matter.

* How our goals from 2025 held up and what changes are coming in 2026

* What academic publishing really looks like (and why it’s so frustrating)

* Reflections on teaching wins and evolving classroom strategies

* Making professional trade-offs between teaching and research

* And a whole lot more!

Catch up on some old episodes:

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Some show notes:

Season 4 kicks off with a reflection on 2025, both personally and professionally. Jadrian is celebrating the New Year with a Shiner Premium lager while Matt is getting an early start on Dry January with a Diet Coke. We’ll revisit our goals from the previous year throughout the episode, but let’s state upfront that we didn’t move the needle much on weight loss. Perhaps we’ll enter 2026 with renewed motivation and a more intentional focus on fitness, finances, and structure.

We kicked off our data point analysis with a look at how prediction markets are showing a 27% chance of a U.S. recession before 2027 and how that number has changed throughout the year. Unlike surveys, prediction markets are different because they impose real costs for being wrong. From there, we turn to New Year’s resolutions. Americans under the age of 45 are twice as likely as older Americans to say they’ll make one, which naturally leads us into a broader reflection on goals, incentives, and realism.

Academically, Jadrian is happy with his newsletter's growth (nearing 10,000 subscribers), media interviews (including Marketplace, NPR, and the New York Times), and record-setting course evaluations. Meanwhile, Matt was on sabbatical last Spring and was able to wrap up several research projects, including a policy-relevant experimental economics study and a Broadway-focused data paper.

We close the episode by looking forward. For Jadrian, that means being open to new opportunities with teaching and writing. For Matt, it means focusing on the things only a dean can do, especially expanding international internship opportunities for students and continuing to think carefully about teaching and learning in an AI-heavy environment.

As with most economic decisions, the theme of the episode is familiar: maximize what matters, subject to limited time, imperfect information, and a lot of uncertainty.

This week’s pop culture references:

One of the best parts of teaching is when students start spotting economics outside of the classroom. Jadrian often brings pop culture into his classroom, but it had been a few semesters since a student brought something back to him. That changed this past semester when a student told him she was binge-watching Psych and caught a reference to game theory.

Matt taught game theory for the first time in a while and assigned a project where students applied the concepts to something they’re passionate about. With permission, he’s turned a few of those projects into presentations for a broader audience. In this episode, he shared one where a student analyzed the popular game Clash Royale and explained how mixed strategies can help in high-pressure scenarios.

We reflect on what economics can teach us about work, technology, and the future. A new report by LinkedIn found that one in five Americans now work in jobs that didn’t exist in 2000. We consider the economic implications of new roles driven by technology, the gig economy, and changing workplace demands. We touch on the decline of now-obsolete jobs, and question how educators can help students prepare for an unpredictable employment future.

In this episode, we discuss:

* The surprising stat that 1 in 5 Americans have jobs that didn’t exist in 2000

* What kinds of new jobs have emerged in the past 25 years

* The decline of older job types and industries, like video rental

* How institutions and firms adapt to new tech by creating new roles

* Teaching strategies to help students understand labor market changes

* And a whole lot more!

Catch up on some old episodes:

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Some show notes:

We’re sitting down in the middle of December, which means our classes are nearly over. By the time you’re reading this, grades have been posted, and we likely have auto replies on our emails. Jadrian celebrates the end of the term with a Shiner Bock (Texas pride intact), while Matt braved a Mad Elf, with a water on standby.

Our mystery stat game included estimates of holiday spending across the U.S. and Canada, and the motivation for today’s conversation: roughly 20% of Americans now work in jobs that didn’t exist 25 years ago. That stat, based on LinkedIn data cited by The Wall Street Journal, set the stage for our discussion on how the economy has evolved over the past 25 years.

It’s easy to spot the jobs that have emerged in recent years: prompt engineers, social media managers, app developers. Even long-standing institutions like universities now rely on roles in IT, marketing, and cybersecurity that simply didn’t exist 25 years ago. And beyond traditional workplaces, the gig economy has exploded, with Uber drivers, Instacart shoppers, and Grubhub couriers becoming a visible part of daily life.

But there’s a flip side: jobs that fade away. One of the clearest examples is video rental, where employment dropped from over 120,000 in 2000 to fewer than 13,000 by 2017. It’s a reminder that as technology and habits shift, entire industries can disappear.

Students often struggle with this dual reality. New tech can destroy some jobs while creating others we couldn’t have predicted. The fear that automation will leave everyone unemployed reflects a common economic mistake: the lump-of-labor fallacy, or the idea that there’s a fixed number of jobs to go around.

Labor market change can feel uncertain, even threatening. If 20% of today’s jobs didn’t exist a generation ago, what does that mean for the value of a college degree? For us, it reinforces the point: teaching students how to think, adapt, and collaborate may be the most reliable form of job security. Majors and tools will change, but curiosity, communication, and decision-making won’t be outdated anytime soon.

Cheers, and happy holidays!

This week’s pop culture references:

Jadrian brought a fun throwback clip from a 1994 episode of The Today Show, where the hosts puzzle over what the internet is and how email addresses work. It’s a great reminder of just how recent (and confusing) the digital age once felt.

Matt shared a scene from Sunset Boulevard’s “With One Look,” where a former silent film star (Norma Desmond) reflects on losing her place in Hollywood. It’s a striking example of creative destruction. New technology (talking pictures) can erase entire careers, even for once-iconic stars.

College is often framed as the bridge between adolescence and adulthood, but how much should professors “step in” to guide student behavior along the way? In this episode, we dig into the economics of teaching choices: attendance policies, deadlines, nudges, and classroom rules. We reflect on how these decisions affect student outcomes and engagement, and whether support in the short run may come at the cost of long-run independence.

In this episode, we discuss:

* What paternalism looks like in college classrooms

* Should attendance be required in higher education?

* How paternalistic policies affect learning and engagement

* Trade-offs between student freedom and faculty expectations

* Whether “hand-holding” helps or hinders student success

* And a whole lot more!

Catch up on some old episodes:

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Some show notes:

It’s early December, and the semester is just about coming to an end at Virginia Tech and Susquehanna. Jadrian opted for a Prickly Pear Fruit Beer from Shiner, while Matt went with a Voodoo Ranger Juice Force Hazy Imperial IPA in a small 7.5 oz can. Matt’s was high in ABV but “efficient.”

We kicked off this episode with a new game, and it might just become a regular segment. One of us brings a specific number from a recent news story, and the other has to guess what it represents. Jadrian chose a stat from a new survey on whether adults think college is worth the cost, while Matt focused on gains in the S&P 500. Let us know what you thought of the segment in the comments!

We’ve touched on paternalism before, but this felt like the right moment to give it a full episode. As the semester winds down, we naturally start asking which policies should stay and which should change next term. A lot of those decisions come down to how much we should shape student behavior. Take attendance, for example. Should professors require it, track it, and tie it to grades? Or is it enough to show up, teach well, and let students make their own choices?

From there, we expand into a broader design challenge. Every classroom policy (e.g., attendance, phone or laptop bans, email rules, assignment deadlines) is a lever that nudges behavior. Jadrian shares his use of Friday night deadlines as a way to protect students’ weekends and reduce procrastination. It’s a deliberate nudge that some students dislike at first but often come to value by the end of the course (he thinks!).

Matt frames these choices as a kind of mechanism design problem: how do we build classes that support learning and accountability, without overwhelming students? And how do we balance short-term support with long-term independence? There’s also a practical question of whether being too hands-on now ends up leaving students unprepared for less flexible environments after graduation.

We also zoom out to look at institutional choices, like Susquehanna’s common lunch hour on Tuesdays and Thursdays. That break in the schedule encourages students to eat, meet with faculty, and build community. Even small decisions like that carry a bit of paternalism baked in.

We don’t land on a one-size-fits-all answer. But we agree on this: every classroom rule, even something as simple as a deadline or device policy, is an economic choice. Whether intentional or not, it shapes how students behave and what they learn about navigating structure.

This week’s pop culture references:

Jadrian passed on his pop culture pick this week to keep the conversation going about Susquehanna’s campus-wide lunch break. But Matt came prepared with a clip from Jadrian’s favorite show (Parks and Recreation) where Leslie Knope argues for a soda tax to reduce overconsumption in Pawnee.

Behind every pint of beer is a surprisingly complex story about choices, local identity, supply chains, and a maze of regulations. This week, we sit down with Trey Malone of Purdue University to unpack the economics of beer. We talk about everything from tap lists and terroir to hop farmers, regulations, and what it really means to “buy local.”

In this episode, we discuss:

* How Trey’s research career evolved to include beer economics

* The explosion of product variety in grocery stores and how beer exemplifies that

* Why too many choices on a tap list can lower beer sales

* How local identity and terroir shape demand for craft beer, hops, and cider.

* What 110,000 regulatory restrictions reveal about entrepreneurship in the beer industry.

* And a whole lot more!

Catch up on some old episodes:

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Some show notes:

After three years hosting a show titled “Economics Happy Hour”, we figured it was finally time to discuss the economics of beer. We thought it best to bring on an expert, Trey Malone, the Boehlje Endowed Chair for Managerial Economics in Agribusiness at Purdue University. Our drink line-up for this episode was eclectic: Jadrian with a Maine Blueberry sour, Matt with a Dogfishhead 90 Minute IPA, and Trey with a nostalgic Stroh’s.

Trey shared some of the background to his journey into economics and eventually research interest in the economics of the beer industry, which grew out of broader questions about food marketing and product diversity. When he was born, grocery stores carried around 8,000 unique products, but that number is around 50,000 today. Beer, in particular, went from being dominated by a small number of similar-tasting brands to a vibrant, diverse craft beer landscape. That shift made it a great case study for exploring consumer preferences and market evolution.

One of his key research findings when studying beer was that more choices aren’t always better for businesses. In a field experiment featuring a partnership with a local brewery, he was able to find that doubling the number of beers on tap actually reduced the likelihood that customers ordered one, a classic case of choice overload. However, adding a small signal on the beer (like highlighting its rating or awards) restored demand by lowering search costs.

Trey also talked about how supply chains and local identity shape consumer preferences. In Michigan, hop growers leaned into the concept of terroir and crafted narratives around their unique Chinook hops to build demand, even in markets outside the state. His research on cider showed that “local” doesn’t always mean geographic proximity. Instead, it’s tied to community identity. For example, many Detroit consumers prefer cider from Michigan’s Upper Peninsula—hundreds of miles away—over cider from Windsor, Ontario, just across the river.

On the production side, Trey’s work also explores regulation in the beer industry. Using machine learning, he and his collaborators identified over 110,000 regulatory restrictions across the beer supply chain. While that sounds like a lot of red tape, the research finds that clear and consistent rules often help entrepreneurs more than vague or inconsistent policies.

It turns out that beer is more than just a beverage. It’s a powerful case study for understanding how incentives, identity, and business decisions intersect across the economy.

This week’s pop culture references:

Jadrian yielded his time to Trey to hear more about his teaching-related scholarship. Trey shared two recent papers published in Applied Economics Teaching Resources. One explores how podcasts can be used for extension and outreach, especially in agricultural colleges, to build connections beyond the classroom. The other applies the Ignatian Pedagogical Paradigm (IPP) to create a day-long event focused on Black, Indigenous, and People of Color (BIPOC) farm ownership, developed within a college of agriculture at a midsouth university.

Matt shared a quick analysis he did on how much Cheers character Norm Peterson likely spent on beer during his run on the show. It was a fun, light look at fictional bar tabs and a clever nod to this week’s beer theme.

College football is big business. While universities often talk about tradition, rivalries, and student spirit, the finances tell a story of massive contracts, enormous buyouts, and constant leadership churn. This week, Matt and Jadrian explore the economics behind college football coach buyouts and ask why schools pay millions to people who they consider bad at their job. We explore what these buyouts say about incentives, risk, and market competition in college sports.

In this episode, we discuss:

* Why coach buyouts are structured the way they are and what they signal.

* How risk, reputation, and recruiting drive buyout decisions.

* The role of agents in inflating buyouts and securing job security.

* How schools balance donor pressure, fan expectations, and contract costs.

* And a whole lot more!

Catch up on some old episodes:

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Some show notes:

Both our universities are in the midst of course registration, which means students are simultaneously stressed about their current classes and determining the classes they’ll take next semester. That stress has spilled over to Jadrian and Matt, which meant it was a good time to sit down, have a drink, and talk about economics. Jadrian was able to enjoy a Shiner Light from the great state of Texas (but purchased in North Carolina), while Matt opted for a non-alcoholic Bud Zero.

This week’s episode looked at the structure and rationale of college football coach buyouts thanks to a recent article published in The Wall Street Journal. For those who haven’t heard, a lot of major college football programs are on the hook for multi-million dollar buyouts of their head football coaches—a payment owed if their employer fires them before their contract ends. Schools like Penn State, Louisiana State, and Florida all owe their most recent coaches more than $100 million combined in buyouts. But why?

These high-profile buyouts aren’t just about poor performance. Sometimes, schools are willing to pay tens of millions to remove a coach simply because they’re not meeting expectations fast enough. Of course, they’re also there to disincentivize coaches from leaving for a better job. Buyouts, then, serve both as a penalty for early termination and a retention incentive.

Schools can’t perfectly predict how a coach will perform, but large contracts and buyouts can signal confidence or act as a commitment device. It’s also worth considering the financial discipline of athletic departments and athletic directors, and whether these clauses represent a principal-agent problem or a winner’s curse.

This week’s pop culture references:

Neither Matt nor Jadrian had a pop culture tie-in this week, but Matt shared a classroom experiment related to the episode’s theme. In his game theory course, students bid on a jar of pennies worth $6.01. Most bids come in well below that. One student, however, bid just over $8 and won, perfectly illustrating the winner’s curse discussed earlier in the episode.