Much of my first-year microeconomics course was focused on the concept of maximising utility. What exactly is utility? The unassuming layman or fourth year ex-GPS rowing BAFE student who began their degree during COVID might ask. The irony of that question, however, is that unbeknownst to them, both unsuspecting individuals have maximised their utility. The layman with no knowledge of microeconomics has no need to stay awake pondering the opportunity cost of every minute of sleep lost, the BAFE student sleeps soundly in a flight path suburb next to his cupboard full of DFO Tommy Hilifiger shirts, RMs, and a singular pair of Docs for when he is forced to forego the Regatta for Rics. They are not perfectly substitutable, but he doesn’t even know what that means. Game theory? He has golf tomorrow and a theory that he will win. All is well.
Unfortunately, I do not fall into one of these archetypes, although my results for ECON2011 may convince you I do. Nevertheless, to set up my model for today, I’m going to think like an economist and assume rational behaviour on your part, reader, in that you are not reading a literal blog about economics from the Economics Society about the Economics Ball without a first year week one knowledge of micro. If you are – I admire your chutzpah – but maybe skim and scan Investopedia first.
Unlike the legendary free launch party of yore which sparked revolutionary economic discoveries by my predecessors – see references Hunt (2021) and Mortimore (2021) – the ball presents a unique challenge in terms of modelling utility. These intellectual heavyweights have concluded that a free event leads ‘attendees [to] theoretically demand an infinite number of drinks’, but the ball is a paid event (Hunt, 2021). Do I assume the ticket price as a sunk cost and the attendees as rational economic agents? I don’t know how valid that is; I personally have never seen someone acting in an economically rational way off an entire bottle of $5 sparkling repackaged as prosecco.
The Tragedy of The Uni ball – as lamented by Keynes in a paper that was sadly lost to time, but I have gained access to – is that if we assume the average attendee is used to paying $10 per drink, a $110 ticket makes attendees believe they must have at least 11 drinks to break even, and more to make a profit. It can also be assumed that, naturally, a fair proportion of the attendees of the Economics Ball are there to make a profit. Personally, as a woman, I would never pay for a drink, but I’m not smart enough to calculate if that means my break-even point is 0 or infinite mimosas. For our BAFE alpha male, sure, reaching break-even might not be too much of an issue, but if your biopic wouldn’t be called Australian Psycho, maybe be wary of this.
We could factor in the additional costs of the ball – Instagram dress hire accounts must make more money off the ball than the society – but whether this would increase consumption due to increased costs or decrease it due to fear of vomiting and paying an additional cleaning fee is to be contested, so I will not be incorporating this into my model. However, empirical evidence suggests that perhaps there is a trend towards increased consumption for female ball attendees who generally spend more on preparation, leading to trips home in an ambulance à la a certain UQES exec member.
Additionally, to set up my model, I have assumed increasing marginal utility for the first 5 drinks for normal people, and 2 drinks for losers those who enjoyed ECON2300. After that, all marginal utility diminishes faster than Kevin Ye finds you on LinkedIn after you pass him on the street.
It is then clear that the optimal amount of drinks is somewhere in the middle of the ticket price-number of drinks curve. Of course, paying more for your ticket means that you will require more drinks to reach this level. It must also be reiterated that if you are used to paying more for drinks – say, at the Eagle St BELhub satellite campus, Friday’s – you may derive more utility from each drink and hence require less drinks to reach maximum utility than someone who is Birdeespilled. However, it is also likely that you spent more on your dress than someone who frequents the Bird, and thus there is a shift in your utility curve to approximately that of someone who is Birdeespilled. Please note that this is being published for educational purposes and I take no responsibility for encouraging anyone to consume copious amounts of mimosas to ‘maximise their utility’ as economics is made up.
Opposing this perspective, however, is economic researcher Mortimore (2021)’s insight that there is a ‘tendency [for] young people to consume in excess, often to the extent that the outcomes seem very inconsistent with a utility-maximising decision’, bringing us back to the notion that perhaps ball attendees aren’t interested in slowing their pace to maximise utility after all, but prefer to attempt to reach a break-even point on their ticket price. Then again, judging by the P-plated S-class outside Colin Clark that nearly wrote off my Suzuki Swift this morning, I am not entirely sure how concerned the average Economics Ball attendee is with reaching positive cash flows on a $105 investment.
I will be carefully observing on Saturday night and implementing econometric analysis and detailed surveys to create a rigorous and mathematical model of Ball attendees. And now that everyone who has read this will be staying away from me, I’ll be able to fully capitalise on my ticket price at the bar.
By Charlotte Thorne
Hunt, D. (2021). UQES Blog. Retrieved from Bar Tabs: A Further Examination: https://www.uqes.com.au/blog/bar-tabs-a-further-examination/
Mortimore, D. (2021). UQES Blog. Retrieved from Bar Tabs: A Case Study in Tragedy of the Commons: https://www.uqes.com.au/category/blog/page/3/#:~:text=Bar%20Tabs%3A%20A%20Case%20Study%20in%20Tragedy%20of%20the%20Commons