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Can a single $100 bill solve an entire town's debt crisis? This riddle is a window into transaction costs. I rely on Jeffrey Rogers Hummel's insights, adding a few thoughts of my own. 

And a cool letter: Ever wondered why you haggle for a car but not for your morning Starbucks's coffee?  

Plus, a book recommendation: Nobel Prize-winning economist Edmund Phelps' "My Journeys in Economic Theory," a compelling read that blends economic insights with political theory.

Links:

• David Henderson gives a statement of "the riddle"
• J.R. Hummel's web site
• Similar story, from LvMI

Haggling:

Sebastian Schweighofer-Kodritsch, "The Bargaining Trap," Games and Economic Behavior, November 2022, v. 136, pp. 249-54.

Book recommendation:

• Edmund Phelps, My Journeys in Economic Theory.  Columbia University Press.  https://cup.columbia.edu/book/my-journeys-in-economic-theory/9780231207300 

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz