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Posts Tagged ‘pricing’

The Dutch Rail System's Strange Peak-Load Pricing

I bought a round-trip ticket for a short train trip in the Netherlands, paying full price. Later I asked a colleague if there are discounts of any kind. Yes, she said, as long as you travel after 9 a.m. I assume this illustrates peak-load pricing, so I asked about traveling in the evening rush hour. It turns out the discount is good any time after 9 a.m.—there is no peak-load pricing for evening rush.

Pricing Chicken Wings

I stopped by a local fried chicken joint, Harold’s Chicken Shack, the other day. Just to give you a sense of what sort of restaurant this is, there is a layer of bulletproof glass separating the workers and the customers. They don’t cook the chicken until you order, so I had five or ten minutes to kill waiting for my food.

Pricing Fancy Cheese

Ah, lunch at Fortnum & Mason in London — without doubt, the most posh place we ever have lunch at. By the time we get to dessert, we only have enough stomach room to split a piece of chocolate torte.

A Gullible American

The Caffé Nero outlet in London I visited recently has different prices for take-out and in-store cups of coffee — £1.65 for take-out, £1.75 for in-store. Given the costs of space for tables to sit at, and the need to own and wash cups and saucers, the price difference must be way too small to make this cost-based price discrimination.

I've Made a Huge Mistake

I cannot believe we posted a photo puzzler the other day about the pricing strategies at a banana stand and failed to acknowledge the most delicious fact about the situation: There’s always money in the banana stand!

Changing the Hotel Pricing Model

I spent three nights recently in the guest house at Hitotsubashi University in Tokyo. Very pleasant – and it was priced at $20/night (obviously heavily subsidized). In addition, however, there was a one-time $16 charge for cleaning at the end of my stay.

The Right Price for Parking

The City of Austin sells valet parking companies the right to use a parking space for $250 per year. Is that the right price? I doubt it.

Fix Medicare's Bizarre Auction Program

Harry Truman once quipped, “Give me a one-handed economist! All my economists say, ‘On the one hand, on the other'” Often even a lone economist has difficulty making a recommendation. While true on certain matters, there are many issues where economists do agree about the right and wrong course of action. A case in point is competitive bidding for Medicare supplies.

FREAK Shots: Mispriced Hot Dogs

Tom Glickman sent us this photo at a Nathan’s restaurant. One hot dog will cost you $1.99. But two will cost you $3.99 — and four will cost you $5.99. As Tom writes: “Not the most egregious mistake in pricing, but most curious that one is overcharged by a penny for every additional hot dog you purchase.”

How Apple Sets Prices

An article in Bloomberg BusinessWeek breaks down Apple’s pricing strategy and identifies its key components.

The New-Car Mating Dance

Our minivan is ten years old, so we went out to buy a new one this weekend. In Freakonomics and SuperFreakonomics, we write a lot about how the Internet has changed markets in which there are information asymmetries. Buying a new car gave me the chance to see first-hand these forces at work in the new car market.

A Reverse Auction to Conserve Kilowatts

The Missouri Department of Natural Resources on July 28th ran what may be the first-ever online reverse auction for energy efficiency grants. The state allocated $3 million of American Recovery and Reinvestment Act funding in a series of three one-hour auctions by having 23 pre-qualified businesses bid on a $/kWh saved basis for projects that were expected to enhance energy efficiency. Grants with fixed dollar amounts were awarded to the bidders who promised the best (conservation) bang for the (grant) buck.

Would You Like a Tchotchke With Your Internet?

A souvenir store on Unter den Linden in Berlin offers 15 minutes of “free” internet usage. To log in, you go to the counter, get an entry code, and are free to use a PC. Moreover, you can use the code to get 10% off the purchase price of any souvenir in the shop. But unlike some “free” deals that come with tie-in purchases, this is a voluntary tie-in.