Pokémon, a hand held video game made by Statoshi Tajiri in 1996 is about a character who explores the world training Pokémon and using them to battle against other trainers.  Today there are 6 generations of Pokémon games, 23 different core series games, and over 700 Pokémon, all of which I have loved playing.  I received my first game: Pokémon Blue, back in 1997, the year I also learned to read, after my mom got tired of staying up reading Pokémon to me all night.

Since those fateful days staying up with a flashlight under my covers, Pokémon has aged with me, like a fine wine. As it turns out, Pokémon is more complex than meets the eye, both in player-to-player interactions and in the main game. Now that I am older and have taken Micro Econ, I have recognized the presence of several monopolies in the Pokémon games.

So, lets take a look at the Pokémon economy.  In Pokémon, the player buys all of their goods either from individuals who sell specialty items like Lavaridge cookies or MooMoo milk, or from the Pokémart. Pokémarts are a strong example of a monopoly in the Pokémon games. In order to complete the game, one must buy Pokéballs in order to catch Pokémon, potions to heal them in battle, and other items, which increase the base stats of Pokémon. Since Pokéballs are directly necessary in order to beat the game, and items like potions are extremely helpful, the demand for these products is highly inelastic. Additionally, all of these products must be bought in Pokémarts scattered across the land. All of these Pokémarts maintain the same appearance and prices. We can assume, since all trainers must buy Pokéballs, and those who buy other items have a significant advantage, that the Pokémart monopolies can mark up prices significantly in order to maximize profits. We see this by comparing the products made in Pokémarts to other items available in game.

One interesting phenomenon in the Pokémon games is the relative prices and efficiencies of different healing items. For instance, the store bought item Potion costs 300 Poké-dollars to heal 20 hit points, whereas the Fresh Water item heals 50 hit points for only 200 Poké-dollars. So how does the Pokémart monopoly get away with this huge markup? Well firstly, Fresh Waters can only be bought at vending machines in specific locations in the game, whereas Pokémarts can be found in virtually every city in the game. Another reason is that they aren’t perfect substitutes for higher-level trainers. While Fresh Water offers the best Hit Points to Poké-dollar ratio, one of the main uses of healing items is in the heat of battle. This is where Fresh Water falls short. Fresh Water can only heal 50 hit points maximum, but Hyper Potions which cost 1200 Poké-dollars can heal for 200 hit points, albeit for a lower hit point-Poké-dollar ratio. However, for higher-level Pokémon, 50 hit points is an insignificant amount, especially when expecting a big attack.

Another way I have applied the concept of monopoly to the Pokémon games is in my player-to-player interactions. Sparing you all the nitty gritty details about Pokémon breeding let me tell you that it is very difficult to train Pokémon adequate for competitive battling and to breed just one would take days of work. I wanted to build a team of 6 Pokémon, but I knew I didn’t have enough time. This all happened towards the end of winter term and I realized that the opportunity cost of breeding Pokémon all day was a significant drop in my GPA. So, I came up with a strategy to create a monopoly on one type of competitively viable Pokémon, then to trade it for different Pokémon of the same worth. See, while it may take days to breed the first competitive Pokémon, the second and the third take only minutes afterwards. In a simplistic way, this is like the concept of an economy of scale, wherein the first unit is expensive to produce, while the next are less so, making this the perfect set up for a natural monopoly. In order to do this right, I needed to pick a Pokémon that is strong despite fluctuations in the metagame (or current dominant strategy). This meant that my product had inelastic demand, meaning I could demand stronger Pokémon in return for my trade. I also decided to pick a scarce Pokémon and give it a scarce move through a series of time consuming steps. This created a significant barrier for entry for others looking to breed similar Pokémon, giving me stronger monopoly power. All told, I was able to make a number of beneficial trades with others who had similar monopolies on different Pokémon. This illustrates the fact that by specializing and trading, each Pokémon master could save time but still make a powerful team in order to be the very best.

All told, Pokémon actually illustrates the concepts of monopoly fairly well, both in game and in player-to-player interactions. For those interested in the Pokémon I used to make a monopoly, it was jolly Lucario with the egg move bullet punch. Unfortunately, Lucario has since been banned to the über tier and so my monopoly power is mostly gone.

Link to the article

This article discusses some of the reasons behind why cable prices are raising so rapidly.  The author says that this trend is a result of cable companies working together to artificially raise prices.  They do so by competing over issues like recording space instead of over price.  Since cable companies are largely similar to the average American, people do not benefit from switching providers.

I think that there might be other reasons affecting this price increase as well.  The supply for cable packages is strange.  In some circles, like students or the tech savvy, cable has a direct substitute in internet service providers.  A subscription for Netflix, Hulu, and Antenna costs 27$ per month total,  as opposed to the cheapest cable providers $50 dollars a month.  Therefore, since these products are substitutes, the demand curve for cable amongst the tech savvy is highly elastic.  In fact, since the prices of internet TV providers are so much cheaper than cable, we can assume that anyone who views these products as substitutes will have already switched from cable to internet TV.

However, for many, internet TV is not a substitute.  Perhaps they cannot figure out how to work netflix, or prefer to watch on a large screen TV.  Maybe they just enjoy classic programming and like the ease of being able to turn on the TV and flip through the station.  Whatever the reason, to them internet TV is not a substitute for cable.  We can then assume that their demand for cable is relatively inelastic. Since they must buy from one of the cable companies, cable companies can increase their costs to make up for lost demand by internet users.  To me, this is the more likely reason that cable companies have increased their costs so dramatically.  It is interesting that the demand for cable can be both highly elastic and highly inelastic at the same time.

Since my life is pretty much confined to being within the Carleton bubble, I want to talk about how the principles of microeconomics apply to my life here: specifically to how I spend my money at Sayles.  We have talked in class about how the income and substitution effects impact our consumption patterns, but I want to examine a more general trend, why do I always tend to save my money at Sayles until the end of each term.

I’m on the 14-meal plan meaning that I start out each term with 300 dollars at Sayles.  Assuming that I eat Sayles equally throughout the term, I should be around 150 dollars by fifth week.  However, both terms I have been on the 14-meal plan, I have been closer to 200 or 250.  By the end of the term, I always end up at 0.  I think this tendency to save early on in the term and spend later can be explained using the economic concept of opportunity cost and utility.

First off, it is important to note that Sayles gives me high utility. I far prefer it to LDC or Burton.  Another important note is that I never end up eating my full 14 meals in the dining halls.  To me, dining hall meals are essentially free and infinite.  One reason I think I save my Sayles money at the start of the term is because the opportunity cost of eating at Sayles is higher.  Why would I eat Sayles when I can get free LDC?  As the term goes on the opportunity cost of eating Sayles goes down, since if I don’t bring the balance down to 0 I miss out on utility.  Utility is the other reason I believe I save my Sayles dollars.  To me, there is high utility in being able to eat during times of the day when the dining halls are closed.  I would prefer to save my available Sayles dollars for meals during times like this, and eat free dining hall food the other times.  Finally, I do not experience diminishing marginal utility from Sayles, except in extreme cases.  That said, even if I do have 50 dollars at sayles at the end of the term, I could always spend it on mango juices and other items I can bring home with me and eat there.  Therefore, I save my dining dollars at Sayles to be spent during times when it would be of high utility to me, which tend to be later on in the term.  I also begin to spend money later in the term as I see that I risk running out of time to spend the rest of my money.