Some entertainers don’t pay attention to what’s going on around them. They just go, “Oh, cool, I’m playing this place.” They just do it, and they take the money. But if you pay attention, you find out that the economics are very simple. If you want more money, the fans pay for it. They just pay. And so I decided, “Okay, I’m making enough. Let’s drive the ticket prices down a bit.” I decided to do that a couple years ago, especially because the economy was shitty.
The McRib was, at least in part, born out of the brute force that McDonald’s is capable of exerting on commodities markets. According to this history of the sandwich, Chef Arend created the McRib because McDonald’s simply could not find enough chickens to turn into the McNuggets for which their franchises were clamoring. Chef Arend invented something so popular that his employer could not even find the raw materials to produce it, because it was so popular. “There wasn’t a system to supply enough chicken,” he told Maxim. Well, Chef Arend had recently been to the Carolinas, and was so inspired by the pulled pork barbecue in the Low Country that he decided to create a pork sandwich for McDonald’s to placate the frustrated franchisees.
But the McRib might not have existed were it not for McDonald’s stunning efficiency at turning animals into products you want to buy.
Bar-Yam’s findings, released Feb. 13 on arXiv, are part of an emerging research field known as econophysics. It applies to economics insights from the physical world, especially from systems in which networks of interacting units produce radical collective behaviors.
Heated water turning to gas is one such behavior, known technically as a phase transition. Another is snow gathering into an avalanche. Seen through an econophysicist’s eyes, a stock market panic is an avalanche, too.
Using a phase transition model, Bar-Yam’s group analyzed patterns of movement in the stock market. At the beginning of the 2000s, co-movement was low. On any given day, about half the stocks were moving up or down. By 2008, shortly before the crash, co-movement was absolute. People were no longer making independent decisions, but copying others.