![]() ![]() ![]() In Florida, we receive hurricane warnings most years. Those lower prices provide customers with less costly options to see or do what they want – a win.Ī more controversial example is hurricane supplies. Isn’t it better to have the choice to pay more and receive the thing you value than to be told, “Sorry, we are sold out?” Similarly, dynamic pricing results in lower prices for less popular attractions and dates. If it is a game you really want to see or a trip you really want to take, you can do so – for a higher price and you will know the price in advance. You might ask, “How is that a win-win? The sellers win because I pay more, but I don’t win.” Well, in fact, you do win. Those customers who could be more flexible are rewarded with lower prices for doing so. By adjusting prices according to demand, travel companies ensure that the customers who most value traveling on specific days can do that, albeit at a higher price. During periods of low demand, such as mid-winter trips to Minnesota, prices tend to be lower. During periods of high demand such as the Wednesday before Thanksgiving, prices are higher. Buyers can see the prices and decide whether to buy.Īirlines and Hotels are the best-known industries using dynamic pricing. These days we often use electronic secondary markets like StubHub, but the same principle applies – prices are higher for the most popular events, and lower for the less popular. I was young and I could tolerate the heat, so sometimes I took advantage of the lower ticket prices. On the other hand, 1 pm games in September against a mediocre opponent from the West had low demand and lower prices. The scalpers explained there were not many seats so they could charge higher prices, and I knowingly paid more to attend. As I recall, the sellers in front of the stadium were able to charge much more for the game against the Jets, simply because there were so many ex-New Yorkers living in Miami. In 1983 after moving to Miami, I scalped tickets to multiple Miami Dolphins games. The customer is always told the price before deciding to buy and can say no. ![]() Scalpers have always adjusted their prices according to the day and time of the game, the importance of the game, and the opponent. Politicians Should Stay Out of It. An obvious but little-discussed example of dynamic pricing is the secondary market for events like sports, concerts, and theater. I have written multiple blog posts about dynamic pricing, with my main point being it is a very efficient way to balance supply and demand. When used properly, dynamic pricing can be a win for the seller and the buyer but it does not deceive the customers. I finally complained after the last trip to the airport was $30 more than quoted, (I know, I should have switched earlier), and the Lyft rep’s response was, “We use dynamic pricing.” He was wrong. I recently took a few rides with Lyft in New York City, and I was surprised when the actual prices I was charged were higher than the price I was shown when booking. ![]()
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