Thursday, January 5, 2012

Surge Pricing

Remarkable post by R. Salam, on surge pricing.

He's right, of course. It's exactly the same issue as for "gouging."

Either you use surge pricing or you simply tell customers that cars are not available even at a high price that at least some of them are willing to pay, which is really strange. (Uber's explanation...)

Might not even be profit maximizing. What this does is ensure that there is a car available, in an emergency.

Very cool.

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Do you have suggestions on where we could find more examples of this phenomenon?