It’s a line that has been quoted often, many times in conversations about entrepreneurship and hustle culture. And articles have been used to try to use it to teach entrepreneurship (see example here and here). I also heard it recently at a keynote about entrepreneurship at a workshop hosted by College Board on the new AP Business and Personal Finance course.

But sitting in that workshop, I think the line deserves a different interpretation.

This isn’t just about entrepreneurship. It’s about personal finance.

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You Are Your Own Business

Whether you realize it or not, you are a business.

You generate income. You make investments. You take on liabilities. You manage risk. You allocate scarce resources over time.

And unlike a traditional business, the stakes are even higher—because the outcomes affect your entire life. Think about the kinds of decisions most young adults face. These aren’t small choices—they’re capital allocation decisions with long-term consequences:

• Whether to take on student loans—and more broadly, whether (and where) to attend college

• Whether to contribute to tax-advantaged accounts like an IRA or a 401(k)

• How to invest those funds: diversified index funds, individual stocks, bonds, or cash

• How much to save today versus consume now

• Whether to purchase a vehicle—and how much to spend on it

These decisions mirror decisions that businesses must make.

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The Insight Most People Miss

We tend to teach personal finance as a checklist:

• Save more

• Avoid debt

• Invest early

That’s useful—but incomplete. A better way to think about it is this: You are the CEO and the primary asset of your own firm.

Jay-Z’s line wasn’t meant as a personal finance lesson. But it might be one of the most powerful ones out there. Because at the end of the day, whether you start a company or not…

You are a business.

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Tommy, Billy Bob Thornton’s character pushes back against Rebecca’s idea that “clean” energy is, well, clean. He points out that alternative energy sources have hidden monetary and environmental costs. He also points out that fossil fuels have generated enormous benefits. It’s not a subtle scene, but the economic insight underneath it is an important one.

(Warning - some NSFW language.)

The Negative Externalities from Energy

A negative externality occurs when a product or activity imposes costs on someone who isn’t the buyer and seller. One of the most common examples that economists use is with energy production, as pollution (from energy production) is a negative externality. With a negative externality, a solution often proposed is to tax the product that creates the externality. Others propose to regulate the products in other ways.

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And yet, many economists talk about fossil fuels and only tell this half of the story. Economists - including in most textbooks - often discuss negative externalities from energy but completely ignore the positive externalities from abundant energy. This is horribly misleading. Naturally, the negative externality, pollution, from energy use matters. But ignoring the positive externalities is like doing a benefit cost analysis when ignoring the benefits.

The Positive Externalities from Energy

Fossil fuels create pollution, yes, but they also create the conditions for improvements in human well-being. Tommy says “the thing that’s gonna kill us all is running out before we find an alternative”. This implies that fossil fuels save lives, and it is true that fossil fuels have helped to improve the lives of basically everybody in the world. Further, cheap, abundant energy has saved tens of millions of lives across the world. Consider these examples:

• Massive reductions in mortality through basic infrastructure
  Cheap, reliable fossil-fuel energy made it possible to power clean water systems, sewage treatment, refrigeration, and hospitals. These innovations dramatically reduced deaths from waterborne disease, food spoilage, and lack of medical care—especially in low-income countries where energy reliability is a matter of survival, not convenience.

• Agricultural productivity and famine prevention
  Fossil fuels power mechanized farming, irrigation systems, fertilizer production (via the Haber-Bosch process), and food transportation. With cheap energy, we all have food. Without it, people would starve.

  

• Economic growth through industrialization and job creation
  Cheap energy lowers production costs, enabling factories, transportation networks, and supply chains to emerge. This leads to higher wages, more economic growth, and lower poverty.

• Health gains from indoor air quality
  Access to fossil-fuel-based electricity and gas reduces reliance on indoor biomass burning (wood, dung, charcoal), decreasing respiratory disease .

• Resilience to climate and environmental shocks
  Fossil-fuel energy enables heating, cooling, desalination, flood control, and disaster response. These technologies dramatically reduce deaths from extreme weather, heat waves, and cold exposure—helping poorer societies adapt and survive in challenging environments.

  

The energy debate, then, is not as much about choosing between “good” and “bad.” It’s about choosing between competing sets of trade-offs.

Eventually, I think and hope that the whole world will harness renewable energy in an inexpensive way. But that day isn’t today. Therefore, as Thomas Sowell says, there are no solutions, only tradeoffs.

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This year marks the ten-year anniversary of one of my favorite movies - and musicals - of this century, La La Land. It is also Oscar season and the nine-year anniversary of one of the most memorable moments in Oscar history: La La Land being mistakenly announced as the Best Picture winner before the award was ultimately given to Moonlight.

The moment was awkward and unforgettable—and oddly fitting for a movie about hope, uncertainty, and chasing improbable dreams.

But La La Land also offers something else that has aged remarkably well: some clear, intuitive economic lessons hidden inside its musical numbers.

Two songs in particular—Another Day of Sun and Someone in the Crowd—capture core ideas from economics.

Sunshine, Location, and Real Estate Prices

The film opens with Another Day of Sun, a joyful number set amid gridlocked traffic in Southern California. The singers aren’t living glamorous lives. They’re struggling, commuting, auditioning, and chasing long-shot dreams. Yet one theme keeps resurfacing: no matter how hard things get, at least the sun keeps shining.

From an economics perspective, this is a lesson about amenities and housing markets. All else equal, people prefer to live in places with pleasant weather. A great climate makes a location more desirable, increasing demand for housing in that area. When demand rises faster than supply—as it often does in dense or highly regulated cities—home prices and land values increase.

Sunshine doesn’t just make people happier; it gets capitalized into real estate prices. That helps explain why similar homes can cost dramatically more in Southern California than in places with harsher climates. Another Day of Sun captures this tradeoff perfectly: life may be hard, but the location itself is valuable.

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Networking, Uncertainty, and Search Costs

Later in the film, Someone in the Crowd follows four aspiring actresses getting ready for a party. They’re exhausted, frustrated, and unsure—but hopeful that this might be the night they meet the right person. The song captures the strange mix of optimism and anxiety that defines many creative careers.

Economically, this is a vivid illustration of search costs. Search costs are the time, effort, and resources spent looking for opportunities. For workers, that includes auditions, networking events, unanswered emails, and informal conversations. For employers, it’s the challenge of identifying the right candidate among many qualified options.

High search costs explain why luck and timing play such a large role in careers—and why networking matters so much. Social connections can reduce search costs by speeding up the matching process. One conversation, one introduction, or one chance encounter can dramatically change someone’s trajectory. Someone in the Crowd is essentially a musical about imperfect information and the hope that one connection can make all the difference.

Why La La Land Works So Well for Economics

What makes La La Land especially useful for teaching economics is that it doesn’t romanticize outcomes—it highlights tradeoffs. Great weather comes with higher housing costs. Dream careers come with uncertainty and long searches. And even beyond the songs, we see economic forces at work with Sebastian, Mia, and the other characters throughout the movie.

Ten years later, La La Land remains a powerful reminder that economics considers how people respond to incentives, scarcity, uncertainty, and hope—even when they’re dancing on the freeway.

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In this post (and accompanying video), we share the insights of my student Kayla Gaston who completed this for her game theory final project. (This is the second of two topics she covered. The first is here.)

This season revolves around a love triangle between Anthony, Kate Sharma, and Edwina Sharma. On the surface, Anthony behaves exactly as a rational actor should. He wants a marriage that maximizes status, minimizes emotional risk, and secures the Bridgerton line. Love, he tells us repeatedly, is unnecessary—and possibly dangerous.

So why does everything collapse?

The Setup: A Seemingly Rational Game

Anthony enters the marriage market with a clear objective: find the best possible match. When the Sharma sisters arrive in London, Edwina quickly becomes the queen’s “diamond”—the most desirable option available. Kate, her older sister, is not seeking marriage and instead focuses on securing the best outcome for Edwina.

At this point, the incentives align neatly:

• Anthony gets a socially optimal marriage

• Edwina marries into nobility

• Kate succeeds in her goal of protecting her sister

From a game-theory standpoint, this outcome is Pareto efficient: no one can be made better off without making someone else worse off. It’s also a Nash equilibrium—no single player has an incentive to deviate.

If this were a textbook problem, the game would end here.

But Bridgerton isn’t a textbook.

The Critical Decision: A Deviation from Equilibrium

Everything hinges on one moment: the wedding ceremony.

At the altar, Anthony faces a simple but consequential choice—ignore Kate or stare at her. Ignoring Kate preserves the equilibrium. Staring at her introduces new information into the game and fundamentally alters incentives for everyone involved.

In the video embedded below, Susquehanna University Game Theory student Kayla Gaston walks through this moment using a decision tree and payoff analysis:

Once Anthony deviates, Edwina must decide whether to proceed with the wedding or flee. Kate must decide whether to confess her feelings or reassure her sister. Each branch of the decision tree produces a different payoff—and many are significantly worse than the original equilibrium.

This is a classic game-theory lesson: even when a stable equilibrium exists, players don’t always choose it.

Why Rational Players Make “Irrational” Choices

From the outside, Anthony’s decision looks foolish. Ignoring Kate would have preserved his reputation, secured his title, and avoided public embarrassment.

So why doesn’t he do it?

Game theory doesn’t assume players are emotionless robots. It assumes players respond to incentives as they perceive them. Anthony overweights short-term emotional signals and underestimates long-term strategic costs. In doing so, he breaks a stable equilibrium and forces everyone else to respond.

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This is precisely what makes Bridgerton such a useful teaching tool. The show demonstrates that:

• Rational outcomes can exist without being chosen

• Deviations often impose costs on others, not just the decision-maker

• Emotional information can destabilize otherwise efficient games

In real life—whether in relationships, business, or politics—this happens all the time.

The Takeaway

Bridgerton Season 2 is not just a romance. It’s a case study in how strategic interaction breaks down when commitment falters and incentives shift.

Anthony’s tragedy isn’t that he lacks good options. It’s that he fails to commit to the one that makes everyone—including himself—better off.

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Let’s start with the value to society that people get from watching the game.

The Value of the Super Bowl to Society is Enormous

Americans can watch the Super Bowl, along with the commercials and halftime show, on freely available TV channels. For most, there is no additional cost to watch the Super Bowl. That doesn’t mean it doesn’t have value to people, however.

The fact that the game can be watched for free but is so valuable means the Super Bowl provides what economists call consumer surplus - which is the value consumers receive above and beyond the price paid. This value is large!

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For a thought exercise on how valuable the game is, think about how much money would you need to be paid to “not” watch the game? This amount would represent your consumer surplus. For some of you, maybe you don’t care much about the game and the answer is zero. But for others I suspect to give up watching the game, along with the time with friends, the commercials, etc., you would need to be paid more than $100 and for some it would be more than $500 or $1000.

Let’s assume the average consumer surplus is $100. Given about 130 million Americans will watch the game this year then the value of the Super Bowl to society would be approximately $13 billion!

Americans will wager A LOT on the Super Bowl

Last year, Americans were estimated to wager almost $1.4 billion on the Super Bowl through legal markets. The amount is much higher when you count informal office pool and illegal betting, with some estimates coming it at over $20 billion.

Naturally, the amount bet through legal markets is just the amount wagered - not the amount the house will win. But on average, sports gambling sites will do well on Super Bowl Sunday, and competition to bring in gamblers is driving companies like Fanduel, DraftKings, and BetMGM to spend (advertise) heavily in order to acquire customers.

There is Social Value to Betting Lines and Prediction Markets

Point spreads and betting odds aren’t just randomly chosen; they reflect the collective beliefs of thousands (sometimes millions) of participants putting real money on the line. As new information becomes available—injuries, weather forecasts, lineup changes, or even shifts in public sentiment—betting lines move to incorporate it.

If you’ve followed prediction markets in politics, you know that they are more accurate than polling data. For sports betting, this accuracy doesn’t mean that if the point spread is 3 points that the favored team will win by 3 points. But, you can bet that about half the time the favored team would win by 3 or more and half the time it would not.

This has value for a couple reasons. First, if you want a prediction, it is very difficult to outperform the betting lines in the long run. If you hear someone laying out a compelling case why one side or another would win a bet, you’d do well to understand that betting against the spread is almost certainly a 50/50 proposition. Television analysts may be entertaining, but betting markets have a built-in discipline as incorrect beliefs are costly. Over time, that pressure pushes prices toward surprisingly accurate predictions.

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Second, if you do wish to place a wager, you could pick whichever side you prefer, place a bet, and know you’re likely getting fair odds. Third, if you’re in a casual betting pool at a Super Bowl Party, perhaps on who might score, or final outcomes, you could use the betting odds to your advantage when completing your choices.

Finally, given the house takes a percentage (called the juice), it is almost impossible to be a winning sports better in the long-run. If you’re looking to earn money, putting funds into the stock market has had a great track record over time. Gambling on sports - not so much.

The NFL is Dominating TV Markets Beyond Just the Super Bowl - and the Super Bowl Ad Prices Show It!

In 2025, fourteen of the top fifteen televised events in the US were NFL games (the other was game 7 of the World Series). The Thanksgiving game between the Chiefs and Cowboys set a regular season record for viewership at over 57 million And people watched that game for 11.7 billion minutes. People watched Netflix’s hit show Stranger Things for 11.8 billion minutes - over the entire month! However you look at it - the NFL dominates.

Because of it’s power and viewership, the NFL is able to charge $8 million per ad and it is asking companies to buy another $8 million of ads on other sports.

For More, Watch the Video

The NCAA loosened the restrictions on athletes earning money and the transfer portal a few years ago. From that, a market system is emerging. Thousands of football players are in the transfer portal right now and going to teams that are either bidding the highest for their services or providing the best overall fit (combining compensation and opportunities).

See the ESPN reporter’s comments and my quick thoughts in this very short video.

Overall, economists like free markets as they maximize the total of consumer surplus and producer surplus. Buyers (the teams) generally get the players they want. And the sellers (the players) get value above and beyond what they would have needed to get to play. Without markets, you have players stuck in places that aren’t good for either side.

For an example, think of Indiana quarterback Fernando Mendoza (pictured above). He transferred from Cal to Indiana, won the Heisman, and has a chance at a national championship tonight. He is likely going to be the top pick in the NFL draft this April. What would have happened without the opportunity to transfer?

This is just one example, but I think it is worth highlighting as the NIL market here was incredibly important for this player (and the team). Markets are generally efficient and I’ve seen nothing to indicate the NIL market is inefficient.

But chaotic? Yes.

Markets can also be chaotic and disruptive. They can seem like a free-for-all. Some won’t like the end result, but society generally fares better with unrestricted markets.

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In my Game Theory class at Susquehanna University, students complete a final project where they apply game theory to something they find interesting. They create a video explaining and I like sharing some of the top projects. (With their permission, of course.)

In the video below, Kayla Gaston ‘26 analyzes Season 1 of Bridgerton through the lens of game theory. She focuses on the strategic interaction between Daphne and Simon , showing how their “fake relationship” can actually be a rational strategy in the marriage market.

Once real feelings enter the picture, the incentives change.

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As you will see in the video, Kayla shows that there isn’t just one possible outcome. There are multiple Nash equilibria — one that leads to mutual happiness, and another outcome that is stable but clearly less desirable. The story becomes a great illustration of how incentives, reputation, and commitments shape behavior, even in a Regency-era romance.

Check it out, and stay tuned as a second video from Kayla on game theory in Bridgerton that will drop next week.

Patrick Bova ‘26 shared about how to use game theory to improve your skills in the mobile game Clash Royale.

In Clash Royale, one common challenges players face is figuring out how to stop the Hog Rider. There are several counter strategies, but two of the most popular are the Electro Wizard and the Skeleton Army. Each works… until it doesn’t. If you rely too heavily on one option, your opponent can anticipate your move and exploit it.

That’s where mixed strategies come in.

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In the video, Patrick shows how you can mix strategies and finds the mixed strategy Nash equilibrium. Rather than always choosing the same counter, he shows how randomizing between Electro Wizard and Skeleton Army keeps your opponent guessing and prevents them from gaining an advantage.

Watch the video:

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This was the question that we begin with in the article I co-wrote for The Council on Food, Agricultural & Resource Economics (C-FARE) with Carola Grebitus and Jay Corrigan.

We write:

Artificial intelligence (AI) is an increasingly popular tool for economics research. This raises questions about whether it can complement—or perhaps even replace—human participants in economics experiments. We explored this possibility by asking large language models (LLMs) like ChatGPT, Claude, and Gemini to stand in for people in experimental auctions used to measure consumer willingness to pay.

Experimental auctions are a well-established technique for estimating the value people derive from different food attributes—like organic labels, fair trade certification, or local sourcing. But experimental auction studies are costly and time-consuming, often requiring hundreds of participants and costing tens--or sometimes even hundreds--of thousands of dollars. If AI could accurately mimic human bidding behavior, it could make this type of research faster and cheaper.

We asked three LLMs—ChatGPT-4o, Claude 3.7 Sonnet, and Gemini 2.0 Flash—to bid in two experiments we had previously conducted with human participants.

For more - check out the article!

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We think the way economics is being taught is not adequate and have thoughts on how to improve it. Here are a couple excerpts.

Economic freedom is a vital component of a prosperous society. Defined as the ability to make economic decisions without undue government influence, people in free societies can work, transact, and contract with others, as well as own and use productive property. The United States has traditionally been one of the most economically free countries; however, measures of economic freedom from Freedom House, The Heritage Foundation, and the Fraser Institute in Canada, demonstrate a troubling pattern: over the last 30 years, economic freedom in the United States has declined precipitously.

As useful (and disturbing) as this knowledge is, these measures provide us with data but do not help us understand why economic freedom is waning. To understand the root cause of the decline, and reverse it, we need to get to the heart of what Americans know, and don’t know about economics. Without an understanding of how the economy functions, and how freedom is the foundation of our economic prosperity, the slide will continue.

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And

What does that mean for economic educators? ECON 101 should return to its roots by accentuating the history of economic thought, buttressed by the work of Adam Smith, Frédéric Bastiat, F.A. Hayek, Milton Friedman and others, like economic historian, Joel Mokyr, who was a recipient of the 2025 Nobel Prize in Economic Sciences, who think holistically about complex problems.

For more, check out the article!

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I was contacted by NPR’s Marketplace for comments, and they ran this story. Please listen to the whole thing, but my part:

And not every show can raise ticket prices to cover higher costs due to inflation, said Matthew Rousu, dean of the School of Business at Susquehanna University (and a big time Broadway fan.)

Bottom line?

“There’s just simply less money to split between the groups, and that is probably why we’re seeing the threat of a strike. When there’s less to split, it’s much tougher to come to an agreement,” he said.

Four other observations about Broadway and a potential strike

1. Broadway musicals are losing a lot of money.

The only new shows that seem to have truly thrived recently are those with superstars like Jonathan Groff (Just In Time), Denzel Washington (Othello), and George Clooney (Good Night and Good Luck). A recent New York Times article shared that “Looking further back, 46 new musicals have opened since the pandemic … and only three are in the black”.

This is bad news for Broadway. And why are all these shows losing money? For that, we go to observation #2.

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2. Broadway ticket prices are (way) down after adjusting for inflation from 2018

This is from of a previous post (go there for more), but prices in today’s dollars were about $160 in 2018, well above current prices. Lower ticket prices combined with costs going up is a painful combination.

3. A strike of any significant length will likely cause some shows to permanently close

Many current shows are selling well below capacity and (or) are seeing lower average ticket prices, resulting in weekly revenue of far under $1 million weekly. See current Broadway grosses for details. With a strike, some of these shows that are struggling would likely close.

4. There are tradeoffs between the compensation per actor and the number of actors employed

This is basic economics. The law of demand says that the higher the price is for something, the less people buy and it holds for labor markets. Therefore, if the compensation for workers on Broadway increases that means the quantity of workers employed would drop. We could see fewer shows come to Broadway.

Something else that would like happen: Smaller casts. There has been a trend of smaller casts in Broadway shows and as more compensation needed per worker, shows will try to make things run with fewer workers. (Whether actors, orchestra members, or others who help run a show.)

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An indefinitely repeated game is one that, well, repeats indefinitely. The games get interesting if it is a situation where cooperation is not the right move when the game is played once, but can become the right strategy when the game is repeated.

Consider this following game:

In this game, if played once each player has an incentive to defect, earning more ($4 or $1) by defecting than by cooperating ($2 or $0). The problem is that if both cooperate, both get $2 which is better than the equilibrium when both earn $1. This is a prisoner's dilemma game, often studied in introductory economics.

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That’s what happens if the game is played only once. It is interesting is when this game is repeated, however, because there is a chance cooperation can work. It all depends on how much the future is valued or discounted.

I asked ChatGPT about this game and again, Chat GPT’s analysis was spot on!

I wrote: "Let's play a game. Suppose that you could get $2 every time period indefinitely if you cooperate with "player 2" and they also cooperate. (You are player 1). If you both defect, you both get $1. If you defect and they cooperate, you get $4. The game repeats except that there is a 10% chance the game ends after each period. Your opponent faces the exact same payoffs. Your opponent is intelligent and doesn't make mistakes in analysis. Do you choose to cooperate or defect in period 1?

The response:

This is a repeated Prisoner’s Dilemma with a geometric probability of continuation. Let’s solve it step-by-step.

Payoffs:
Both cooperate: each gets $2
Both defect: each gets $1
You defect, opponent cooperates: you get $4, they get $0
You cooperate, opponent defects: you get $0, they get $4

Continuation Probability:
The game continues with 90% probability each round, so the discount factor (δ) = 0.9

Strategy Considerations:
The opponent is intelligent and makes no mistakes. Let’s assume the opponent is using a grim trigger strategy: they will cooperate as long as you do, but defect forever if you ever defect.
This creates an incentive to maintain cooperation unless the temptation to defect is too large.

Calculate Expected Value of Cooperating:
If you cooperate every round:
VC=21−δ=21−0.9=20.1=20V_C = \frac{2}{1 - \delta} = \frac{2}{1 - 0.9} = \frac{2}{0.1} = 20VC​=1−δ2​=1−0.92​=0.12​=20Calculate Expected Value of Defecting in Period 1:
If you defect in period 1, you get $4 in the first round, but the opponent will defect forever afterward (assuming grim trigger). So in future periods, you both get $1.
VD=4+δ⋅11−δ=4+0.9⋅10.1=4+0.9⋅10=4+9=13V_D = 4 + \delta \cdot \frac{1}{1 - \delta} = 4 + 0.9 \cdot \frac{1}{0.1} = 4 + 0.9 \cdot 10 = 4 + 9 = 13VD​=4+δ⋅1−δ1​=4+0.9⋅0.11​=4+0.9⋅10=4+9=13Comparison:
Cooperate: $20
Defect: $13

Conclusion:
You should cooperate in period 1. The present value of long-term cooperation exceeds the short-term gain from defection, given the 90% continuation probability and the assumption of a rational opponent using grim trigger (or similar punishment-based strategy).

Once again, I am impressed at how well it can solve the games, and how well it can articulate the results for why a particular action should be taken.

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This time, we’re diving into behavioral economics—where psychology meets decision-making—using Shake It Off and We Are Never Ever Getting Back Together. These songs give us insight into commitment devices, sunk costs, and how to make better choices.

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Lesson 4: Behavioral Economics – “We Are Never Ever Getting Back Together”

Economists assume we make rational, forward-looking decisions, but behavioral economics recognizes that we often let emotions and biases take over. Enter We Are Never Ever Getting Back Together.

When Swift declares that "We are never ever getting back together." she is creating a commitment device. By making this breakup public (and turning it into a chart-topping hit), she’s raised the emotional and social cost of going back on her word. Commitment devices work by increasing the future cost of doing something we know is bad for us, like returning to a toxic relationship.

Where else can commitment devices work? Retirement spending accounts are a good example. In the US some retirement accounts have restrictions from withdrawing until a person is 59 1/2 years old, making it expensive for someone to withdraw funds for other purposes. If people were perfectly rationale, they wouldn’t need to restrict withdrawals. But humans are not robots, so these types of devices help people keep money in retirement accounts.

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Lesson 5: Sunk Costs & Rationality – “Shake It Off”

One of the most common mistakes in decision-making is succumbing to the sunk cost fallacy. Sunk costs are previously incurred costs that don’t impact future decisions. The sunk costs fallacy occurs when people or organizations take sunk costs into account.

Swift’s mantra in Shake It Off is the antidote:

"’Cause the players gonna play, play, play, play, play... Baby, I'm just gonna shake, shake, shake, shake, shake..."

By shaking it off, Swift refuses to dwell on past hurts, gossip, or bad decisions. Instead of letting sunk costs influence her, she moves forward. Economists would say she’s ignoring sunk costs - the irrelevant past costs. She only focuses on future benefits and costs.

Final Thoughts

Taylor Swift isn’t just a global superstar—she provides a surprisingly sharp lens for understanding economics. From risk-taking in Blank Space to rationally “shaking it off,” her lyrics remind us that the principles of economics are everywhere, even in our playlists.

I recently co-authored a scholarly paper with Sarah King, Signe Thomas, and Jadrian Wooten on economic lessons in Taylor Swift song lyrics and how educators can use them to teach. It is forthcoming in the Journal of Economics Teaching. Why did we think this was important? Rather than only relying on graphs or theoretical models, using song lyrics, especially from the world’s top pop star, can help students better understand economic lessons.

In this post, we are sharing some with a wider audience how three songs—august, Superman, and Blank Space—unpack core economic concepts like opportunity cost, labor economics, and risk analysis.

We hope you’ll agree.

This is the first of two posts that , my podcast co-host and Monday Morning Economist author, worked on together. Both will be posted here (stay tuned for part 2) but if you’re not already subscribed to Jadrian’s newsletter, check it out!

Lesson 1: Opportunity Cost & Tradeoffs – “august”

Every choice involves giving up something else—and what you give up is the opportunity cost. Time, in particular, is a scarce resource. In august, Swift captures the fleeting nature of time and how every moment spent with one person means sacrificing something else:

"August slipped away into a moment in time..."

This lyric is a perfect starting point to discuss how we allocate our time. Every hour of a summer romance comes at the cost of other activities or relationships. Economists call this the “next-best alternative”—the thing you gave up when you made a choice.

Try this thought experiment: What’s the opportunity cost of your time reading this post? Maybe you could have been watching TikToks or starting your own side hustle. But if this post is worth your time, that means the benefit of reading exceeds those forgone alternatives—at least for you.

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Lesson 2: Labor Economics – “Superman”

Swift’s Superman gives us a surprisingly fun look at labor and employment. She sings:

"He puts papers in his briefcase and drives away / To save the world or go to work..."

Economists could spend an entire class on this one line. Is this person in a traditional labor force role—or is “saving the world” a metaphor for something unpaid but valuable? This opens up discussions about what counts as “work” in economic terms. This person could be employed, unemployed, or not in the labor force.

We also see the concept of compensating wage differentials. Some jobs are dangerous or stressful and need higher pay to attract workers. But some jobs, if people find personal fulfillment (“saving the world”), they may accept lower wages. Swift’s lyric reflects how the non-monetary aspects of work can affect our choices just as much as money does.

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Lesson 3: Risk & Expected Value – “Blank Space”

“Blank Space” might be the most economically rich song in Swift’s catalog. Consider this lyric:

"So it's gonna be forever / Or it's gonna go down in flames..."

This is decision-making under uncertainty. The outcome of a relationship is unknown, so Swift is weighing the possible payoffs: a lifelong love or a painful breakup. Economists would frame this in terms of expected value—the average payoff, factoring in both the probability and value of each outcome.

The song also touches on risk aversion. Even if the expected value of dating is positive (because “forever” would be amazing), some people might avoid relationships altogether to avoid heartbreak. Not Swift. She’s willing to roll the dice—an economist might even call her risk-loving.

Stay tuned!
Soon we will post part 2 on how Swift helps us understand human psychology and biases through Shake It Off and We Are Never Ever Getting Back Together.

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Before we dive in, for those who love K-Pop stars like Rosé, be sure to check out this paper coauthored by Jadrian Wooten, Wayne Geerling, and Angelito Calma for more economic lessons from K-Pop songs!

The Game and the Song

The name APT. comes from a popular Korean drinking game. Rosé and Bruno Mars celebrate the game, and the thrill of the present, where the party is loud and the drinks are flowing. But there is a key lyric that economists immediately note: “sleep tomorrow but tonight go crazy”. The choice here is to enjoy the present at the expense of the future.

Watch the song with economic lessons embedded here:

The Economics of Discounting

Discounting is the idea that people value the present more than the future. Economists often use it to explain why we procrastinate, why we overspend, and why saving money can be so hard. It is also used by government agencies in policy-making.

One classic question that might get at your preferences for discounting: would you rather have $100 today or $110 a year from now? Even though the future option is worth more, many people would choose the money today. Why? Because the present feels more certain and more satisfying. That is discounting at work.

In APT., the characters are doing the same thing—choosing tonight’s fun despite knowing tomorrow’s consequences. Whether it’s a hangover, regret, or just fatigue, future happiness is traded away for present pleasure.

Why This Matters

APT. illustrates a classic example of tradeoffs. The tension between “fun now” and “responsibility later” is one of the most common struggles in life. We might not all play APT. as a drinking game, but we all face tradeoffs. Staying out late even when you have an early meeting, buying something instead of paying down debt, or putting off that dentist appointment—each is a decision that discounts the future.

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This semester I’m teaching game theory, and as part of the course, I plan to explore how students can use and learn from AI. To start, I wanted to see how well ChatGPT could solve a particular type of problem that relies on strategic thinking and logical prediction: the coordination game.

What is The Coordination Game?

A coordination game is one in which players benefit from aligning their choices with others. Because of this, there are often multiple possible Nash equilibria—stable outcomes where no player has an incentive to unilaterally change their choice.

This concept has real-world applications, especially in business. Companies often try to anticipate consumer behavior and align their strategies accordingly.

In my game theory course, I introduce students to the coordination game with a fun, simplified classroom exercise. I ask the class a question. Each student who gives the most common answer—not the “correct” one, but the one most others give—wins a small prize.

For example, if I ask “What color is the sky?” and everyone says “blue,” everyone wins. If 51% say “blue” and 49% say “red,” the blue group wins. But if 51% say “red,” they win—even though red isn’t factually correct. The key is predicting what others will say.

What is a Coordination Game Question I Ask my Students?

There is one coordination game question I used to always ask my students. (Note, since I’m posting this publicly and some of my students will read this, I’ll have to come up with others.) That question is:

What is the fifth most populous city in the United States?

Note - before reading further, take a moment to think about how you would answer this if you were in my class. Remember, you want your answer to be the most commonly answer given.

What was your guess? Well, you could search and easily find that the fifth most populous city in the US is Phoenix. But that doesn’t really matter. What matters if you match the most common answer given by the class.

I’ve run this game this many times in my class and every single time the answer has been Philadelphia. Why? Students generally know Philadelphia isn’t the first or second biggest city. They also know it is a big city and at only 2.5 hours from our campus is the closest. There are even students in the class who are certain this Philadelphia is not really the fifth biggest city, but put down Philadelphia to win.

That raises a question of how would ChatGPT answer? Before asking the question, I wasn’t sure. This isn’t like a problem with a calculator, after all. So what happened?

Did ChatGPT Solve the Coordination Game?

I wrote into ChatGPT:

Do you know what the coordination game is? It is a game where someone answers a question and they "win" if their response is the most commonly given answer from the group. Under these rules, I teach at a University in Pennsylvania. If I asked what the 5th most populous city in the US is, what would you answer?

ChatGPT said:
Yes, that’s a classic example of a coordination game—where players benefit from matching the answers of others rather than being factually correct. The goal is to anticipate what others think is the common answer, not necessarily the right answer.

If I’m playing this game with college students in Pennsylvania, and I’m aiming for what’s likely to be the 5th most commonly guessed U.S. city by population (not necessarily the actual 5th largest), here’s the reasoning:

Most people can easily name:
New York
Los Angeles
Chicago
Houston

Those are usually top of mind. The 5th spot becomes trickier.
The correct answer by actual population is Phoenix, Arizona.

But in a coordination game, Philadelphia might be a more common guess—especially in Pennsylvania—because:
It’s very well-known locally.
It was once among the top 5.
Students may not update for recent growth in Sun Belt cities.
So my coordination game answer is: Philadelphia.

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I was floored at the response. If this isn’t perfect reasoning, it’s really close. As someone who is teaching this fall, it has me questioning what is most valuable to teach and how should I teach it.

So I figured I’d try another one.

A Second Coordination Game Problem

Another coordination game question that I would often give my students is “What is the capital of the state of Washington?"

What answer would you give in the coordination game? ChatGPT gives good rationale and a response that would consistently win if playing in my classroom. (See below the graphic.)

ChatGPT answered:

In a coordination game, while the correct answer is Olympia, most people—especially those less familiar with U.S. geography—might instinctively guess Seattle, because:
It’s by far the most well-known city in Washington.
Many assume the largest city is the capital.
It's often mistakenly identified as the capital in casual conversation.
So for a coordination game, my answer would be: Seattle.

What does this mean? I’m not entirely sure yet—but it’s certainly worth reflecting on.

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If ChatGPT can reason this well about human behavior, even in informal settings like a coordination game, it raises questions about how we should teach strategic thinking and decision-making.

I’ll be posting more about game theory throughout the semester as I explore how to integrate AI tools into the classroom. And there likely will be more game theory and pop culture posts as well. So stay tuned!

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Eric Dunaway (Wabash College) and I explored the deep overlap between poker and entrepreneurship. Whether you’re building a business or building your bankroll in poker, the skills required are surprisingly similar. Here are a few reasons, and for more check out the video below!

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1. Side Hustles and Brand Building

In our video we start with poker vlogger Wolfgang Poker, who sells hats emblazoned with pocket sevens—his signature hand. It’s not just merch; it’s strategy. Selling a few dozen hats helps him offset tournament entry fees, build his brand, and even attract sponsorships. It can be important for entrepreneurs to diversify their income streams.

2. Investing with Expected Value in Mind

Next, we look at Andrew Neeme, who—along with Brad Owen and Doug Polk—bought a majority stake in the Lodge Card Club in Texas. The investment reflects a classic poker trait: evaluating the expected value of a decision. They are calculating that the expected profits will be positive and the risks are manageable. The logic used by poker players is the same logic entrepreneurs use when deciding where to allocate capital.

3. Managing Risk and Emotional Setbacks

In a powerful video clip, Brad Owen recounts a hand that led him to quit professional poker for a while. It’s a reminder that variance, loss, and emotional strain are very real. The takeaway for entrepreneurs? Setbacks are normal. What matters is how you manage risk, control emotion, and keep going. And it is also important to manage business capital.

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4. Liquidity, Opportunity Cost, and Risk of Ruin

In poker, managing your bankroll is important. Not doing so means a downswing could cause bankruptcy. The same holds in business, it is crucial to keep enough business capital and liquidity to survive a rough stretch.

5. Profits Must Cover Opportunity Costs

Just like poker players must cover not only the buy-in but also food, travel, and lodging, entrepreneurs must factor in all costs—equipment, rent, insurance, and more. It’s not enough to earn from your business. To be a full time entrepreneur you’re giving up a salary and that should be factor into determining whether the decision to become an entrepreneur, or full-time poker pro, is a good one.

For More, Watch the Video!

In both poker and business, you can make all the right moves and still lose in the short run. But if you understand variance, manage capital wisely, and make positive expected-value decisions consistently, you give yourself the best chance to win over time. Check out the video for more!

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In this post, drawn from our recent YouTube video, I explore how poker hands reveal core principles from behavioral economics—especially risk aversion, expected value, and marginal utility.

Hand #1: Phil Hellmuth Buys Insurance While Holding Aces

In a televised high-stakes hand, Phil Hellmuth holds pocket aces and is heavily favored to win. Still, he chooses to buy insurance from fellow pro Phil Ivey—paying $20,000 to guarantee a $90,000 payout only if he loses the hand. The fair value of the insurance (based on odds) was closer to $15,000.

@pokergoBuying insurance from Phil Ivey during the Main Event! Phil Hellmuth had Brett Richey in a bad spot in this hand from the 2007 @WSOP Official Main Event. But that didn't stop him from buying $20,000 worth of insurance from Phil Ivey! You can watch all of the 2007 Main Event right now on PokerGO on demand. PokerGO is the home of the 2023 World Series of Poker and we're bringing you 47 days of consecutive days of poker livestreams this year! You don't want to miss it. Use the code "DREAM23" to get $30 off an annual subscription today and be entered into drawing to win a seat in the 2023 PGT Championship $1,000,000 Freeroll. Could you be the next to make poker history? Don't forget to follow for more daily poker videos! . . . . . . . . . . . . . . . #poker #wsop #worldseriesofpoker #philhellmuth #pokerbrat #philivey #brettrichey #pokergo #livestreampoker #2010wsop #mainevent #wsopmainevent #tournamentpoker #pokertournaments #highstakespoker

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Takeaway: Hellmuth willingly pays a $5,000 premium to eliminate risk, showing textbook risk aversion. Even poker legends dislike uncertainty when the stakes are high enough.

Hand #2: Brad Owen “Runs It Twice” to Smooth Variance

In another scenario, Brad Owen faces an all-in with pocket queens against ace-king. Rather than run the hand once, the players agree to run it twice—two separate board runouts, splitting the pot between them.

Nothing changes in terms of expected value. But variance is reduced. Imagine that the hand would have been exactly 50/50 to win or lose. By running it twice, the odds are now:

• 25% win both runouts (scoop the pot)

• 50% win one, lose one (break even)

• 25% lose both

Takeaway: Running it twice is a variance-smoothing technique. It reduces the emotional and financial whiplash that can sink even skilled players—especially pros who rely on long-run gains.

Hand #3: A Teacher Folds Pocket Aces for a Guaranteed $50,000

The most extreme case of risk aversion came in a PokerStars special where an amateur teacher, staked with $100,000, folded pocket aces pre-flop. Why? He had just won a big pot and was sitting on a $50,000 profit—money he could keep if he didn’t lose it.

Despite holding the strongest starting hand in poker, he chose the sure thing.

From an economics standpoint, this is risk aversion on full display. The teacher effectively “paid” over $100,000 in expected value to lock in a life-changing payday. When you factor in diminishing marginal utility—the idea that each additional dollar is worth less to you than the last—the decision makes more sense.

(That said, if you’re ever at a poker table and think you might fold pocket aces, it’s time to leave the game!!!)

So, What’s the Lesson?

Even professional gamblers don’t treat money the same way all the time. We’re all subject to emotional responses, loss aversion, and the desire for certainty. These hands remind us that:

• Risk aversion is real—even among gamblers

• Insurance markets exist in everyday and unusual settings (like poker)

• Variance matters just as much as expected value

• Marginal utility shapes how we value additional income

Poker offers a rich playground for observing economic behavior in real time—and not just in theory

Watch the full discussion here:

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Let me know what you think. Have you ever made a “rational” decision that looked irrational on paper? Or hedged against your own team just to protect your emotions? I’d love to hear your take.

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In the video, we break down how poker players actions can give us insight into behavioral economics.

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Among the lessons we dive into:

• The Sunk Cost Fallacy: Why losing one hand shouldn’t affect your next decision—but often does.

• Prospect Theory: Why losses feel worse than gains feel good, and how that shapes risky behavior at the table.

• Commitment Devices in Action: Satellite tournaments that force winners to enter bigger events show how removing choices can help people make better long-run decisions.

• Revealed vs. Stated Preferences: A wild $2 million weight-loss bet between two pros reveals what people really want when the stakes are high.

We even share personal stories, like gym-related incentives embedded in a syllabus and the odd psychology of “winning” by breaking even.

If you're curious how economics plays out in everyday decision-making—or just enjoy poker and want to justify watching it as educational—this video is for you.

Key Concepts Covered:

• Behavioral economics

• Tilting and emotional bias

• Risk-taking after losses

• Marginal analysis

• Commitment devices like StickK

• The hidden power of incentives

Watch the Video:

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While some trends may confirm what you suspect, others offer surprising insights into today’s Broadway ticket prices. I also recorded a video discussing this, which you can find at the end of this article.

Let’s dive in with five facts about Broadway ticket prices

#1: Broadway Ticket Prices Have Risen Since the 1990s

In 1997, the average Broadway ticket cost about $48. Fast forward to 2024, and that number has climbed to around $126. That’s a jump of over 160%. People know that Broadway isn’t cheap, so this likely isn’t a huge surprise.

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#2 Broadway Ticket Prices Have Risen More Than Inflation

It’s not just nominal price increases. When adjusted for inflation using the Consumer Price Index (CPI), the 1997 average ticket would be about $94 in today’s dollars. Given they are $126 today, that means prices have risen significantly in real terms, too. In other words, Broadway prices over the past 30 years are not just keeping up with the cost of living—they have been outpacing it.

#3: Premium Ticket Prices Have Skyrocketed

The real shocker? It’s in the top-end tickets.
In 1997, the priciest seats went for about $124 (in today’s dollars). By 2024, premium ticket prices are averaging around $400. These are often the best seats for blockbuster shows—but many less popular productions now offer premium-priced options, and some theatergoers are willing to pay top dollar without blinking.

This reflects a smart pricing strategy: charge more to those who are willing and able to pay.

#4: Ticket Prices Have Fallen Since 2018 (Inflation-Adjusted)

Here’s something that may surprise you: While prices have increased since 1997, Broadway ticket prices have declined in recent years. In 2018, the average ticket was $127 (not inflation-adjusted), one dollar higher than the 2024 average of $126.

That doesn’t sound too bad, until you adjust for inflation. When adjusting for inflation, the average ticket price has dropped from nearly $160 in 2018 to $126 in 2024. That’s a massive decrease—and a financial strain on productions, since fixed costs (like actor salaries, theater rentals, set costs, etc.) have not been decreasing.

#5: Everyday Tickets Are More Affordable Than You Think

One important clarification that is needed: the average price includes high-end, premium tickets. Many people or families - and I’m in this camp - don’t spend money on the premium priced tickets. We buy what we’ll call a typical ticket. If we focus on the typical ticket—what most people are actually paying?

When we remove the top 5% of ticket prices (the most expensive ones), the average ticket in 2024 comes out to $106. In 1997, that same average ticket (adjusted for inflation) was about $88. That’s still an increase, but a more modest increase over the past 30 years.

This tells us that Broadway is price discriminating effectively—a term in economics that simply means charging different prices to different people based on their willingness to pay. It helps keep shows accessible to everyday fans, while still capturing revenue from premium buyers.

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Broadway’s Pricing Strategy Is Economics in Action

Broadway theaters are responding to economic incentives—balancing the need to attract a broad audience while also maximizing revenue from their most devoted fans. These pricing patterns reflect core economic principles, from supply and demand to inflation, price discrimination, and consumer surplus.

For more, watch the video!