Markets in everything: the roommate/rent dilemma

Stephen Dubner at Freakonomics asks how three roomates should split their Manhattan rent when the rooms vary widely in size. Suggestions included splitting it by square foot, or rotating rooms.

As an economics blog, I’m surprised not to see an economics answer: let the (miniature) market decide.

In college, my roommates and I (one other economist, a biologist and a business major) faced the same room size dilemma. The fix? We bid on the biggest/smallest rooms until we were all satisfied with our abode and our price. There was never a regret in the two years we lived together.

Of course, I’m the person at age 10 whose Dad gave him a T-account on the fridge and received debits and credits instead of an allowance. So maybe my approach to household decision making is a little different from the rest of the world…