Behavioral & Game Theory · Skyler · Walter

House Hunting

Walter and Skyler are in the market for a new house. Walter is attempting to maximize his utility by proposing to Skyler a larger house instead. In other words, Walter is trying to move onto a higher indifference curve. However, their limited budget represents a constraint to Walter’s utility maximization problem.

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Supply and Demand · Walter · Walter Jr.

Buy Me Off

In an attempt to get Walt Jr to like him again, Walter tries to buy him a used car. Recognizing that his dad is trying to purchase his approval, he convinces his dad to buy him a new sports car instead. This clip shows Walter’s willingness to pay for his son’s happiness.

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Behavioral & Game Theory · Foundations

How Big Does it Have to Be?

Skyler takes Walter to a storage area she has rented and shows him the giant pile of money he has made from his meth business. She then asks him “How much is enough? How big does the pile have to be?” Walter appears to have the same determination to earning revenue, but Skyler recognizes that her utility has diminished. The first thousands that Walter brought in may have excited her, but at this point it has become a hassle and it doesn’t seem like another dollar will really change her happiness level.

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Supply and Demand · Walter

Another PB&J

Walter loves peanut butter and jelly sandwiches. This simple meal is often the textbook example for complements in consumption. There are a variety of items that are often consumed alongside other items. When the price of one complement increases, it negatively impacts the consumption of the other.

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Skyler · Supply and Demand · Walter · Walter Jr.

Breakfast Options

Family meals are a great chance to see all the different complements and substitutes in a market. While milk and cereal are often consumed together (complements) there are other options people can decide upon to fulfill their breakfast need. Walter Jr opts for eggs and bacon (substitutes). The decision process involves weighing costs and benefits of alternatives.

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Hank · Supply and Demand · Walter Jr.

What’s for Dinner?

There’s a lot of different complements and substitutes that go into a meal. Fries and ketchup are complements, while sushi and burgers are substitutes. The collective decisions we make are influenced by a variety of different products and aren’t isolated to a single market.

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Supply and Demand · Walter

Peanut Butter and Jelly

Even drug manufacturers love peanut butter and jelly. This video clip shows Walter preparing himself a peanut butter and jelly sandwich. The two items are often the most common examples used when discussing complements in consumption.

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Jesse · Market Structures · Walter

No More Chili P(owder)

This clip shows Walter’s preference for producing superior products. In an inspired scene, Walter states: “You and I will not make garbage products. We will produce a chemically pure and stable product. One that performs as advertised. No adulterants. No baby formula. No chili powder.”

Why should Walter care about how his product performs? Why should product quality matter, especially when traded in a black market characterized by a relatively inelastic demand?

Product differentiation and quality, customer satisfaction, monopolistic competition, and market power can be discussed using this scene. As the show progresses, for example, viewers learn that Walter’s product is the best in the market, highly sought after, and blue. This last characteristic is especially important when learning about the white-colored competing methamphetamine. Product characteristics shape its substitutability and determine the elasticity of its demand or why brand products are often priced differently from generic products.

This description comes from Duncan, Muchiri, and Paraschiv (Forthcoming).

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