Oddbean new post about login | logout More on pricing: After a pub chain introduced 'dynamic' or 'surge' pricing to raise margins at times of peak demand, the FT expects this to become more common as more firms adopt yield management pricing already adopted by #airlines & for concert tickets. The key problem for users of dynamic pricing is their customers' perceptions of #fairness. Although a staple of critical political economy, mainstream #economics has a blindspot on fairness, which may cost these firms more than they think!
@43d7c4ea Isn't happy hour kind of the same thing? Reduce price during times low traffic. Feels like it's more about perception than actual mechanics. Dropping price for low demand feels fair, but raising it during high demand does not. Edit: also, as you say, hotels and airlines do this already, without any outcry.
@43d7c4ea I think the vast majority of large corporations simply don't care what customers think of their brands - because they have high market control and run an artificial scarcity model. Airlines and concert promoters are perfect examples. You pay what they demand or you don't fly/go to the show. Ever more companies and restricting supply in similar fashion. With so many pubs closing, I'm not surprised some are trying this. Late stage capitalism is built for #PriceGouging
@43d7c4ea Back in 1990s Oslo I recall there was a bar (near the stock exchange of course) that had dynamic pricing. A gimmick for brokers iirc. Not a regular there as it wasn't my scene, but I've this mental image of the customers responding to the dynamic pricing by running secondary markets in drinks from their tables. #Norsktut