Visiting China last year, I was struck by an interesting puzzle. In the U.S., if you are in a big building selling clothes or groceries, a department store or a supermarket, the people selling them to you are employees of the firm that owns the building. In China, you are much more likely to be in a building whose owners rent it out in small pieces to a lot of individual sellers. Instead of a supermarket, you have a large building with half a dozen butcher stalls, eight fish stalls, ... . Instead of a department store, you have the same pattern with different stalls selling different sorts of clothing, jewelery, electronics. The pattern is not perfect. There are supermarkets and department stores in China and I once saw a Chinese style food market in Baltimore. But one form of retailing is the norm in China and the exception in the U.S., the other form the norm in the U.S., the exception in China.The puzzle is why.On my recent visit to Brazil, I came across another such puzzle. In Brazil, at least in Sao Paulo, restaurants frequently sell food not by the dish but by the kilo. You fill up your platter with whatever combination of salad, beans, meat, desert you want, they weigh it and charge you. I do not believe I have ever seen that pattern in a restaurant in the U.S. The closest I can think of is the cafeteria in my university, which sells salad by weight, most other things by individual price.There are obvious advantages and disadvantages to that way of selling food. The puzzle is why it is common in one country, rare or non-existent in another.That reminds me of another puzzle that struck me a very long time ago. Some of the costs that a patron imposes in a restaurant depend on what he eats, some on how long he sits. Why are there no restaurants that price the two separately—charge a lower than usual price for the food, but add an additional charge for the time you sit?For any reader who teaches economics, I suggest that working through the logic of these three puzzles, seeing what the costs and benefits are of one form of organization over another, would be a good problem to set your students. For any graduate student looking for a thesis topic who is more interested in doing economics than proving how much mathematics he knows, one of these puzzles might be worth considering. The first step, of course, would be a survey of the literature to see if someone else has already offered an adequate answer. If you find one, let me know.
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