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It probably won't work because it contradicts behavioral economics. Daniel Kahnemann won the nobel prize in economics in 1992 "for having integrated insights fr
by mixmax 19y ago
It probably won't work because it contradicts behavioral economics. Daniel Kahnemann won the nobel prize in economics in 1992 "for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty". One of his findings is that people tend to overreact to small probability events, but underreact to medium and large probabilities.
What that means in the case of this particular business model is that customers will be wary of reserving a table at an early stage where they will potentially pay a high price for the seating even though the probability of this happening is very low.
If you haven't heard of Kahnemann's work his nobel lecture is definitely worth watching - it will give you some great insights on pricing, auctions, and why the economy works as it does.
http://nobelprize.org/nobel_prizes/economics/laureates/2002/kahneman-lecture.html http://nobelprize.org/nobel_prizes/economics/laureates/2002/...
- bayareaguy 19y agoI agree. I know I wouldn't go for this sort of scheme unless there were special circumstances. I think popular restaurants should try and find a way to offer real-time reporting of queue lengths and availability of items on their menu so that I could make a good decision quickly when friends call and want to eat somewhere.
- DaniFong 19y agoWhat if said restaurant were based in a casino?
- mixmax 19y agoheh great comment :-) They would break the bank...
- akkartik 19y agoDidn't the black swan refer to Kahnemann? Drat, I've lent out my copy. http://www.amazon.com/Black-Swan-Impact-Highly-Improbable/dp/1400063515 http://www.amazon.com/Black-Swan-Impact-Highly-Improbable/dp...
- mixmax 19y agoI haven't read, but maybe I should - just checked out the reviews on amazon. It is interesting to note though how markets (and in particular stockmarkets) are heavily influenced by behavioral economics and traders inability to assess a situation correctly in statistical terms, which creates a non-equilibrium in the marketplace. I actually thought up a plan for exploiting this that might just work, unfortunately I am not a programmer so I will have a tough time implementing it.
- hugh 19y agoI agree. Moreover, at any point in time I have three options. 1. Make a booking now, and run the risk that I might pay too much, 2. Wait a little longer, and run the risk that I might miss out altogether, or 3. Say "sod this" and make a booking at another restaurant that doesn't make me play silly headgames just in order to eat there. I reckon I'd choose option 3 every time.