tag:blogger.com,1999:blog-5698599151422542939.post4645860766191702746..comments2023-09-21T05:14:00.254-04:00Comments on Euvoluntary Exchange: Cork It!Mungowitzhttp://www.blogger.com/profile/02340064320347875601noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5698599151422542939.post-75250812662390294532012-03-09T14:04:48.602-05:002012-03-09T14:04:48.602-05:00Sam, the fundamental conflict between the customer...Sam, the fundamental conflict between the customer and the restauranteur is about ill-defined property rights. Recall that property rights are entirely arbitrary and highly contextualized. What seems like an analogous situation may in fact be very different, according to both law and custom. That is why I shall refrain from drawing the obvious analogy made elsewhere between corkage fees and restrictions on bringing in outside food.<br /><br />Whenever we see surprise regarding price, I'm tempted to fall back on the results we get from literature on hidden fees at hotels: there are sophisticated consumers, and naive consumers, and the unique mix of the two in a market determines the degree to which hidden fees are sustainable as a business strategy.<br /><br />In this situation though, I really do think it's about property rights. There are myriad rights you do not have in a restauranteur's establishment. You have to wear clothes. You have to wear shoes. You can't act belligerent. You can't eat off the floor. No matter how freaky perverted you are in your own home, you have to act like a "normal person" when you go out.<br /><br />Your license is extremely limited.<br /><br />If you take the opposite view, you might be pleased to note that restaurants actually *allow* you to do something like bring your own bottle of wine instead of outright forbidding it. They're responding to a demand, they do not have zero MC, and they're operating as monopolists once you're at the table (as the comment above suggests). I guess half of infinity is corkage fee? :DAnonymoushttps://www.blogger.com/profile/16153702750268298333noreply@blogger.comtag:blogger.com,1999:blog-5698599151422542939.post-73802177109043160652012-03-09T12:23:00.509-05:002012-03-09T12:23:00.509-05:00Consider corking fees as an attempt to capture mon...Consider corking fees as an attempt to capture monopoly rents without enforcing monopoly restrictions. <br /><br />Restaurants could disallow BYO wine to capture rents, but they would pay the opportunity cost of repeat sub-marginal customers. Many do this. Others mollify BYO types by allowing them to bring their own wine, but charge them a premium.<br /><br />Anytime BYO is restricted the monopolists have decided it's more profitable to capture their rents through the high prices of goods sold. Beer and peanuts at the ball park; popcorn and soda at movie theaters. The infield at the Preakness Stakes recently moved from BYO to on-site licensed sales to stop drunken Baltimore hooligans from terrorizing families.<br /><br />"Hidden fees" are not an extraordinary phenomenon; they are always an option for sellers and will be chosen when monopolist pricing and enforcement cost more than driving away sub-marginal consumers with corking fees.Anonymousnoreply@blogger.com