Who Pays $731 for a Pizza?

Under what circumstances would you be willing to pay $731 for a pizza?

If your answer has something to do with raising money for charity, then you are halfway right. But that’s not the interesting half.

Here are a few clues:

+ The pizza was sold at auction.

+ The bidding began at $0, and climbed fairly steadily to the winning bid of $731, with nearly 20 different bidders.

+ The auction lasted just over three days and concluded fairly recently.

+ The identity of the buyer isn’t important; it’s the circumstances of the purchase that are interesting.

Have you guessed it yet? I seriously doubt it. So here are a few more clues.

+ The auction concerned a pizza baked in Brooklyn.

+ The pizza in question was to be baked at a certain time … and was connected to a certain holiday.

Yes, that’s right: someone paid $731 for the rights to the first pizza baked after the Jewish festival of Passover.

During the eight-day festival of Passover (seven days in Israel), observant Jews don’t eat any chametz, a category of food that includes any fermented flour and which therefore comprises bread, cake — and, yes, pizza. (This prohibition commemorates the Israelites’ exodus from Egypt, when they didn’t have time to let their dough rise; this is why matzo is eaten during Passover.)

And so each year at Passover, many Jews rid their homes of all chametz. There are all sorts of side markets arising from this practice, including the “selling” of chametz to non-Jews, and the repurchase thereof. There has even been an effort to provide kosher-for-Passover gasoline, since corn is also considered chametz, and since corn-based ethanol has become a common ingredient in gas. [Addendum: the kosher gas story was apparently a pure spoof.]
Anyway: the $731 pizza was a different story. It represented the right to break the chametz fast with a fresh-baked pie from the renowned Pizza Time on Avenue J in Brooklyn.

(Hat tip: Jeff Stier)


procrastinating_econ

The situations for which I would ever pay $731 for a pizza are:

1) Hyperinflation.

2) I am starving to death and I have exactly $731 and somebody offers me a pizza in exchange for money and I don't have any alternative i.e. i'm hungry in a desert or an island.

3) At gun point (provided I have the $731).

4) Might do it for a charity but not sure about that (provided I have a lot of money).

5) I am paris hilton!

JordanO

There are an infinite number of situations where I would be willing to pay $731 for a pizza. For example:

- When the pizza is topped with $731 + x in cash, where x is greater than, say, 10 or 20 (so as to give a small margin of safety should the auctioneer rip me off or should the cheese render any of the currency irredeemable.)

prosa

The situations for which I would ever pay $731 for a pizza are ... I am paris hilton!

If you were Paris Hilton you wouldn't be eating 'za in the first place. Too many calories.

By the way, I believe that Kosher gasoline thing was mainly a hoax.

procrastinating_econ

Neat! You nailed me there. However, there is problem. If you are paying $731 for a pizza and getting a more value than what you paid for (because $731 + x > $731), you are making a arbitrage profit of $x without taking any risk, which is inconsistent with "there ain't no free lunch" rule. But I would agree the real world can be quite different than this.

Also if this is a auction, the bidding should reach high enough so that the pizza is sold for $731 + x, and not $731.

procrastinating_econ

if I was Paris Hilton I wouldn't know how many calories there are in a Pizza!

furiousball

If I was Paris Hilton's dog, I might be able to buy that pizza too.

chrisbryan

If I was Paris Hilton's dog, I would kill myself!

izakrap

this is insane!

diogenes

I thought you were headed toward this story from March 15:

NEW YORK (Reuters) - A New York restaurateur has cooked up the most world's most extravagant pizza -- a $1,000 pizza topped with six sorts of caviar and fresh lobster.

Nino Selimaj, who runs six pizza restaurants in New York, on Wednesday unveiled his Luxury Pizza, a 12 inch (30 cms), thin crust topped with caviar, lobster, creme fraiche and chives. Cut into eight, it works out at $125 a slice.

"I know this won't be for everyone but there are people in New York who can afford it and once tried, they'll be back for more. It is delicious," said Selimaj, who moved to New York from Albania about 29 years ago.

"Sure, some people will say it is just a publicity stunt but I have researched this for over a year and think there is a demand. I have already sold one."

jonathank

Your car is not a person. It can consume corn. Your dog may too. Funny article though.

I think this is a neat idea to raise money.

procrastinating_econ

I think only Levitt and Dubner can try out the pizza and let us know how it tastes lol!

(On second thought i might be wrong cauz there could be other rich people around this blog too who've got nothing better to do hehe :)

The rich can afford it and they have to spend their money somehow. Some claim there is a downside to being rich and spending $731 on a pizza like Paris Hilton (and her dog or other rich people) would evidently do, will not increase their utility level that much. People like Robert Frank (author of "Luxury Fever") and Dan Gilbert suggest our preferences go out of the box when we have too many choices. Their mantra if our choices are constrained it will make us more happy than if we have too many choices. There is tons of analysis done on this.

For anyone interested in this check out Robert Franks book Luxury Fever, Juliot Schor - The overspent american (http://www.youtube.com/watch?v=_nk2_rk0FLw), and psychologists like Dan Gilbert (http://www.youtube.com/watch?v=LTO_dZUvbJA). There was also this article recently in the new york times titled "The rich are more oblivious than you or me" (http://www.nytimes.com/2007/04/04/opinion/04conniff.html).

I am not sure how true all this is, atleast because I still want to be rich. And if one earned their money fair and square then I think there is no harm in spending it either!

Read more...

procrastinating_econ

Has anyone around here read Robert Franks "luxury fever" or Juliet Schor's "the overspent american" ?( herez a nice video about her http://www.youtube.com/watch?v=_nk2_rk0FLw).

Some people do claim that if our choices are restricted it could lead to increase our utility level than having too many choices? If anyone interested in checking out more you can look at Dan Gilberts Ted conference (http://www.youtube.com/watch?v=LTO_dZUvbJA ) and also there was an article about this in the new york times recently titled "The rich are more oblivious than you or me" (http://www.nytimes.com/2007/04/04/opinion/04conniff.html).

I don't know how true all this is because I still want to be rich! Also if you earned your money fair and square there is no harm in spending it either.

procrastinating_econ

Please ignore comment #12 cauz its the same as #11. My apologies, I pressed the submit button and the post didn't appear instantly, so I rewrote it.

guyentin

My original thought was that the pizza was topped with Kobe Beef and Truffles (a lot of them). But that would not be kosher and the Passover thing makes more sense.

bholland

Reffering to the article "the price of sexual preference"... This article made me understand that sexual preference does have it's price, and it happens to be higher for homo-sexuals. Setting the value of an American life at $2 million, Francis calculated that in terms of AIDS-related mortality, it cost $1,923.75 in 1992 (the peak of the AIDS crisis) for a man to have unprotected sex once with a random gay American man versus less than $1 with a random woman. Econmically speaking, the odds of contracting an STD were much greater with gay men, thus the risk increased and essentially the cost as well.

RandyfromCanada

please if some celberity had taken a bite and left the pizza some american withh too much money would buy the leftrovers on e-bay for more than $731

what worse $731 for a pizza or a million for a baseball ? too much money not enough need in USA

Willy

I hope it was at least a large pizza.

110phil

Why would you want to pay $731 just to get the *first* pizza? Why not just order half an hour later from somewhere else and pay $10?

What's the big deal about being first?

ZH

The Kosher for Passover gasoline article was a hoax. There is no basis whatsoever in Jewish law for it, and the rabbis quoted in the article do not exist.
Also, as an Orthodox Jew who has eaten in many of the kosher pizza stores in the New York area, I do not think Pizza Time, or really any kosher pizza store except J2 in Manhattan (which claims that they can deliver a pizza anywhere in the world in 24 hours) qualifies as "world famous"

Nir Levy

In response to the above, is the Pizza really that good that they ship it? Pizza is probably the very, very last food item I would ever ask to be shipped. Pizza is best fresh, hence the value. Being able to eat Kosher pizza right after passover is a luxury because of that. But with time, value would go down rapidly.

I hate pizza that isn't fresh.