The bare truth

Highlighting imperfections in market pricing, former chief economist adviser Kaushik Basu tweeted, “One market failure that needs fixing is the fact that barbers don’t vary the price of haircuts depending on the quantity of hair.” The debate in the comments thread to that tweet seemed to indicate there is good reason why barbers charged the same amount for people suffering from thinning hair. “The classical theory is, the charge for haircut must be inversely proportional to the amount of hair. Less hair calls for more expertise,” went one reply to the tweet.