Mock Class: Extreme Economic Inequality Resulting From Randomness

Christoph Borgers, Professor of Mathematics

I went to a shopping plaza the other day to look for glass jars to store dried goods. One store had them for $2.15 a piece. I went to a second store. They had the precisely same jars for $1.50 a piece. Had I not thought of checking the second store, I would have overpaid by $0.65. Of course, such errors happen all the time. I will show you a mathematical model demonstrating that this sort of random errors --- half the time in your disfavor, half the time in your favor --- suffice to generate extreme economic inequality in the long run.