Brothels, Buffets, and Disneyland

I read in a local newspaper about a bordello in Germany, where prostitution is legal, that charges customers a fixed fee: a bit over 100 euros ($140) for an evening of drinks, food, and entertainment.

This kind of pricing is common to amusement parks (Disneyland, for example), ski lifts, all-you-can-eat restaurants, and elsewhere. It is a way the firm can minimize the transactions costs of pricing each service and also, if the fixed price is set properly, extract the entire consumer surplus.

With such a pricing scheme, however, the customers who choose to pay the fixed fee will differ from those who buy the product if each item is priced separately. Visitors to Disneyland will disproportionately be those who will consume a lot of rides, skiers will be those who want to make a lot of runs, and bigger eaters will visit all-you-can-eat restaurants (for example, I never go to them because they’re a bad deal for me).


Paul

So this bordello should attract those who consume a lot of sex? That doesn't bode well for the prostitutes.

hmmm...

Thus logically the ones who would want to use a fixed price brothel are the ones who would want to do lots of stuff that might be supplemental charges elsewhere.

The mind reels....

Phil

Well it seems to be a TV invention that brothels are always headed by wise madams and not slave traders. But to be fair the pricing scheme generated a lot of attention in the media, so this may be a really low cost advertising, depending on how long they run with it.

Morten

I wonder how a fixed prize can 'extract the entire consumer surplus'? This does not make any sense to me. Do you mean the entire consumer surplus of the marginal consumer? As you suggest, a skier making lots of runs surely gets to keep some surplus, as the resort have to price low enough to attract less keen skiers etc. Would be great if you could elaborate what you mean.

William

Look what happened to six flags. Ch 11 bankrupcy. Doesn't always work out.

TSG

I'm not sure the ski resort analogy works.

Does anyone know of a ski resort that allows you to pay for one trip up the mountain? Lift tickets are more typically sold in full or half day increments aren't they? It seems to me that for most skiers, what they are paying for a lift ticket seems to have little impact on whether they maximize the number of runs in a day.

Grant

At Disneyland you pay for admission and then pay more for food and drink. Not an entirely apt comparison.

M.B.

The comparisons would seem to have less in the way of product differentiation or differences in consumer perception of quality. This has been re-phrased with no attempt at humor so that the editors will let it through this time.

PPrboy

Anybody remember back when disneyland was pay to get in and a book of tickets for the rides "e-rides, anybody?"

Mom & Dad would hand their tickets to the kids and watch from the side. The kids were usually tired before all the tickets were used so the extras made it home as souvenirs. Less folks actually on the rides, but the folks didn't have to pay out unneeeded big bucks to watch their kids have fun.
Then they went to no ride tickets and everybody is cramming into all the "hot" rides to get the most bang for the buck.
Or staying home because they don't like any of the rides (six flags, great america) and all the rest of the ride only amusement parks

jimbino

What we need, it seems, is a bundling of brothel and disney, so the kids have something to do while the dad is busy.

myron

package deal prostitutes , , , wow, McSex.

Keith

TSG (comment #6):

At Mountain High in the San Gabriel Mountains in southern California you can buy traditional all-day (or 1/2-day or whatever) ski lift passes, but you can also by a pass with a number of points on it. When you scan these latter cards in the lift line, the appropriate number of points get deducted (longer lifts cost more points).

http://www.mthigh.com/rates/lifttickets.html

michelle

It's more comparable to a 'great cruise deal.' But is emblematic of some "Disney Deals' as well.(As the price is just too good and people end up spending way more than particular brothel, people receive a few free drinks. I think it is also custom for people to have to pay a lot more for actual services.

While the sticker price is relatively low, people leave with some beer in their stomach. Or a lot less cash in their wallet than originally intended. Realistically, it's probably a lot of girls getting guys to buy overpriced champagne.

While more local residents may know this, most tourists probably do not. Anyways, $140 is hefty for beer and a decently cooked dinner.

T.C. Moore

Dude, yer old. No disrespect.
I think your lack of appetite (in the broadest sense) may be affecting your theorizing.

Most people consider it a convenience to not be nickel and dime'd at Disneyland and ski resorts, and I'm sure at the brothel, too. When skiing I think "am I getting my money's worth?", cuz I'm cheap, but rarely do I feel that I haven't at the end of the day (unless I spend 3 hours drinking cuz the bartender's cute.)

90% of the time, people rise to the challenge, and consume until satiated, at which point they think "I got my money's worth". Only if it's a totally bad deal do they feel otherwise.

To offer alternative pricing would confuse people, all for a tiny minority who feel "I never get my money's worth." Of course, far more people are getting a "bad deal", but they don't realize it, or don't care enough to stop.

Meanwhile, I also rarely do all-you-can-eat. But if they call it a buffet, that's different. French makes it sounds less gross.

Read more...

Steven

This made the headlines here in Germany too. The closest match is the final comment in the post itself--the author doesn't go to all-you-can-eat restaurants because he doesn't eat much. In the local press the madame of the establishment in question notes that the business model relies on the fact that men overestimate their abilities to engage in intercourse multiple times. Very very few can give it a go more than twice -- and usually have a little blue pill to help them -- so there's no real threat to the stand business model. It's all marketing.

Ben

Re #7:

That was my first reaction as well. I believe the analogy is pointing to the unlimited use of rides, not food. The use of rides is only limited by time and the number of other guests seeking to ride the same ride. The argument being made is that if the price is fixed regardless of the number of rides, the consumer gets the best bang for the buck by riding as many rides as possible. This likely produces more riders on rides in a day than would a pay per each ride model where the consumer would quit riding after the marginal benefit stopped exceeding the cost of the ride.

Doc

Would foreplay be a C or D ticket with E tickets required for the act? Talk about failure to capture consumer surplus. Voyeurs would argue for an A ticket while getting the maximum benefit.

Valpey

The Madam is effectively eliminating the most negative part of the encounter. The part of the transaction where the client and the provider have to negotiate ("I'll do x for y dollars") is precisely one of the least pleasant components of the experience. If instead it is looked upon as a cover charge, where, once inside, the client is able to foster the illusion with the provider that their experience together is more genuine, then the client walks away happier - and more likely to return.

Loren Pechtel

I think Valpey (#18) at least partially nailed it--although for me the most negative part would be sex with a total stranger. (Obviously, I have never had sex with a prostitute.)

buggar

late post as i was shocked when I opened at work with my work computer. shame on you...hee hee

To the comment about amusement park rides. I'd rather not be second in line for a roller coaster, but second in line for this, argh blah.

Also, what happens if the featured ride is "out of commission" in need of lubrication like many roller coasters are shut down for periods during the day? argh blah.

this sounds like the health authorities will shut down such a place as it is near impossible to follow govt mandated health (and working condition) guidlines.

lastly, I'll leave ya with a slogan that the establishment can use....come inside for a whole lot of fun, although to be sic(k) the words may be spelled differently.