Customers prefer constant prices. Aside from the perceived unfairness, there are, again, transaction costs. Any time spent by customers trying to figure out how to get the lowest price is still a loss.
Airlines get away with it because airline seats are in limited supply, making it a seller’s market. The buyers have to take whatever the airlines give them. There’s certainly a fair degree of public outcry about it; the fact that there isn’t more is because of a combination of people not understanding it, the fact that most people only buy airline tickets occasionally, and the fact that there’s nothing the public can do about it.
Customers prefer predictable prices. They don’t have to be constant.
E.g., if tickets for an event are $15 in advance and $25 at the door, and this is stated clearly up front, most customers are OK with that… we can plan early and save $10, or we can keep our options open and pay a premium for that privilege.
Airlines get away with it because airline seats are in limited supply, making it a seller’s market. The buyers have to take whatever the airlines give them
On net, airlines lose money. In recent years, it seems to be mostly because of decreased demand (due to terrorism fears and TSA harrassment of passengers), and for decades it’s been because of price wars between airlines. I don’t think this is a market best described as a “seller’s market.”
That’s a very… incomplete prior. Customers also prefer cheap prices. Customers prefer (a lot!) the feeling that they got a deal and bought something on sale.
I also don’t see what’s special about airlines. Pretty much every business would love to price discriminate. Many do through a variety of methods. For example, supermarket coupons are a classic form of price discrimination.
Customers prefer constant prices. Aside from the perceived unfairness, there are, again, transaction costs. Any time spent by customers trying to figure out how to get the lowest price is still a loss.
Airlines get away with it because airline seats are in limited supply, making it a seller’s market. The buyers have to take whatever the airlines give them. There’s certainly a fair degree of public outcry about it; the fact that there isn’t more is because of a combination of people not understanding it, the fact that most people only buy airline tickets occasionally, and the fact that there’s nothing the public can do about it.
Customers prefer predictable prices. They don’t have to be constant.
E.g., if tickets for an event are $15 in advance and $25 at the door, and this is stated clearly up front, most customers are OK with that… we can plan early and save $10, or we can keep our options open and pay a premium for that privilege.
On net, airlines lose money. In recent years, it seems to be mostly because of decreased demand (due to terrorism fears and TSA harrassment of passengers), and for decades it’s been because of price wars between airlines. I don’t think this is a market best described as a “seller’s market.”
That’s a very… incomplete prior. Customers also prefer cheap prices. Customers prefer (a lot!) the feeling that they got a deal and bought something on sale.
I also don’t see what’s special about airlines. Pretty much every business would love to price discriminate. Many do through a variety of methods. For example, supermarket coupons are a classic form of price discrimination.