5/22/07 The Measurable Ramifications of Risk Due to the Price of Stamps

An amazing thing happened when stamps went up to 41 cents...I was allowed to touch the utilities bill. Even though I work in the very same building as the Knoxville Utilities Board, and even through I passed the bill drop box every single day, and even though I had offered on several occasions to carry the bill in and drop it off on my way to the elevators, Tony felt that it would be more prudent to spend 39 cents on a stamp to mail the bill to them. (This probably has something to do with my tendency to use bills as bookmarks as opposed to, you know, paying them). So each month, Tony would pay 39 cents for the piece of mind that the US post office, despite their reputation for occasionally losing mail entirely, generally did not use our bills as bookmarks (that he knew of). But lo and behold, all that changed when the stamp went up to 41 cents. As my economics books says, Tony reached his break-even point on the risk curve, where the risk he was willing to assume with my carrying the bill corresponded to the price he was willing to pay, which appears to be less than or equal to 41 cents, but more than 39 cents. There's even a graph that shows something very similar to this in the book and I can show you the exact page and everything because I have it bookmarked...with the utility bill.