Much ado about pricing

Those aghast at Wendy’s and its “proposed” “dynamic pricing” make the usual errors of economic dislogic far too pervasive in our society today. As usual. This one’s a layup, but allow me to offer a few words.

First off, I think every fast food restaurant–nay, every single person conducting any type of business–should adopt a dynamic or “surge” model of pricing immediately. Please start charging different prices at different times of the day, week, and year for heaven’s sake.

It’ll be easy, of course, because every single person and every single company already does it.

Ever wonder why it’s more expensive to go to Disney World during Spring Break than the middle of January?

Ever wonder why a snow shovel tends to cost more in December than in June? Or for that matter the guy who comes to plow your driveway? He’ll give you a great price from April to October.

(You’re getting the idea but I can’t resist a few more.)

Ever hear of Happy Hour? Pizza specials on Mondays and Tuesdays? Post-season clearance sales, anyone?

Here’s a little secret. It’s all in the name of making money. (Gasp.)

Happy Hour doesn’t exist because someone is trying to be nice. The bar owner wants to get you in early so that you’ll be there longer and end up paying more. Play it right and you’ll get a good deal, of course, but the barkeep’s aim is not for you to save money. (Adam Smith called this non-existent character the benevolent brewer.) The reason Domino’s gives you a deal on Mondays and Tuesdays likewise isn’t compassion; they want to pull you in on a day you’re probably not thinking of ordering pizza. (But maybe if the weekend price is too much for you, you can still enjoy pizza earlier in the week.)

Is Domino’s practicing “surge pricing” on Fridays and Saturdays?

Funny how people tend to concern themselves with the higher prices in these arrangements, rarely thinking of the benefits at the low end. The cheap seats, the cheap fares, various discounts if you’re willing to travel on a particular day or be flexible about your time or take an “obstructed view.”

Rule #1 is: customers have choices.

This is the operation of the market. A free market to coin a term.

Wait, no, that’s the term everyone has been using for years, never mind.

Everyone business is free to charge whatever price its owners want. And ever consumer is free to say no.

Let the record show there have been a few places that have tried to guard against “surge pricing” and the like. They’ve had czars and commissars regulating prices from distant capitals, ensuring a “fairness” throughout the land preventing anyone from getting, well, anything good or approaching good service. They called the waiting lines “queues” to fancy up what really just a hassle. Waiting in line just became a different way to pay.

The Soviet-style communism from what I understand worked really well. Until we found out what was actually going on behind the Iron Curtain and it all came crumbling down.

Given the choice between state-regulated bread and circuses and some freely fluctuating prices on cheeseburgers…

I can has cheezburger?

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About moc

My name is Mike O'Connell. I am 41 years old and live in Northern Virginia. I am a teacher, a musician, and an enthusiast of all things American.

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