3 ms·

Arguably the prices are already transparent, but I think you're arguing that they should be simple and by extension, that complex pricing structures violate the

Arguably the prices are already transparent, but I think you're arguing that they should be simple and by extension, that complex pricing structures violate the free market. I would argue that complex pricing structures are advantageous for savvy customers and airlines alike, and that unsavvy customers (like me, at least when it comes to flying) should expect to pay a premium for simpler pricing structures. An analogy would be purchasing a PC; savvy folks can save hundreds while unsavvy people trying to do the same are very likely to accidentally compromise on things that are important to them. I don't think the solution is regulation; I think it's to teach common sense.

zbentley 8y ago
> unsavvy customers ... should expect to pay a premium for simpler pricing structures. That is both inaccurate (with regards to airlines--you can't tell how much of a flat-fee ticket with baggage included is devoted to that baggage, because ticket prices are widely variable by airline and time, so straight-across comparison is not reliable) and . . . well, just awful; "do your research so you don't miss out on cheaper alternatives" is a reality sometimes, but saying that this is a desirable property of an economic system seems like an inhumane and, if taken to extremes, systemically dysfunctional position to take. It seems like it incentivizes deliberate complexity in pricing structures--and the theoretical backpressure against those trends (competition by organizations with simpler structures) seems to only very rarely be the equal of its opponent. The alternative isn't "hold everyone's hand through all cost decisions"; the alternative is don't make things worse/more confusing unless you absolutely must. Edit: typo.
- weberc2 8y ago
  > The alternative isn't "hold everyone's hand through all cost decisions"; the alternative is don't make things worse/more confusing unless you absolutely must. If you're confident and in fact the entire industry is moving in the wrong direction, then you should probably invest as much as you can afford in an airline that is offering simpler plans. For me, I'll trust that the airlines' leaders are the experts in their own market. > saying that this is a desirable property of an economic system seems like an inhumane and, if taken to extremes, systemically dysfunctional position to take. "Choice" (i.e., "freedom") _is_ a desirable property. Sometimes it means people make inefficient choices (per their values); in general, the proper response to this observation is to teach people how to choose efficiently.
  - consz 8y ago
    >If you're confident and in fact the entire industry is moving in the wrong direction, then you should probably invest as much as you can afford in an airline that is offering simpler plans. I think people should be heavily criticized for making arguments like this -- it's entirely done in bad faith. You're presenting a fairy tale, a piece of advice that is completely un-actionable for a huge majority of people. What is this person supposed to do, when (a) No such airline exists (b) What sort of marginal impact can <$1000 (presumably the most that can be afforded for this by the majority of people) even have in achieving actual change? If anything, complaining about it to others (online or elsewhere) probably has more efficacy than doing the above.
    - weberc2 8y ago
      Not bad faith; you just missed the joke. (a.1) Of course there are differences in the complexity of airlines' pricing structures. To claim that all airlines' menus are equally complex is an extraordinary claim. (a.2) The extent to which it is hard to find an airline with a very simple pricing structure testifies to the economic infeasibility of these structures unless the OP found a market inefficiency (which was overlooked by the entire industry), in which case he should exploit it to the tune of millions of dollars. (b) Assuming the OP is in fact an airline industry visionary, when other airlines see him making money hand over fist, they'll change their ways.
      - zbentley 8y ago
        > The extent to which it is hard to find an airline with a very simple pricing structure testifies to the economic infeasibility of these structures Perhaps. As I've said elsewhere, another explanation is that it's easier to collude than compete, especially in markets with entry-barrier-induced low participant counts. The "it came to be this way therefore the market has revealed the optimum" claim misses frequent realities of limited market control/visibility, greed/laziness (i.e. collusion), and intermediate or catch-up evolutionary behavior (i.e. it's quite hard, absent lots of historical evidence often lacking in recent markets, to tell whether something represents a stabilizing optimum or a state of flux as emergent behaviors pursue changing realities, and there are many reasons to presume the latter).
- AnthonyMouse 8y ago
  > saying that this is a desirable property of an economic system seems like an inhumane and, if taken to extremes, systemically dysfunctional position to take. You have it backwards. The problem with simplicity is that your options for a PC become Performance, Mainstream and Economy. If Economy would have been sufficient except for the storage, sorry, you'll have to pay +$300 for Mainstream (which also has a faster processor and more memory) even though faster storage by itself would only have been +$100. There is efficiency in not paying for what you don't need, but it has intrinsic complexity. Or you can just buy Performance, not have to worry about anything, but pay +$800. Having the simple options available is good because some people value time more than money. Having the complex options available is good because some people value money more than time (or can make a complex decision in a small amount of time). Having said that, the charges for checked bags are still ridiculous, but only because the fees exceed the airlines' cost for carrying the bags by such a large amount. Fortunately they're likely to be destroyed by the price comparison sites now listing the fees next to the ticket price, which should reintroduce price competition for the checked bag fee and either get the fee reduced/eliminated or benefit the customer by giving those who don't need to check a bag a disproportionate discount. Or some enterprising airline will realize they can profit from selling the empty space in their planes not being used for checked bags to someone like FedEx to carry packages. Then FedEx will realize they can open a storefront in the airport and charge less than the airlines to ship your luggage and you'll be able to pay FedEx $15 to pay the airline $10 to check your bag, instead of paying the airline $30. Then the airlines will just charge $14.
amptorn 8y ago
> unsavvy customers [...] should expect to pay a premium No, they shouldn't.

zbentley 8y ago

> unsavvy customers ... should expect to pay a premium for simpler pricing structures. That is both inaccurate (with regards to airlines--you can't tell how much of a flat-fee ticket with baggage included is devoted to that baggage, because ticket prices are widely variable by airline and time, so straight-across comparison is not reliable) and . . . well, just awful; "do your research so you don't miss out on cheaper alternatives" is a reality sometimes, but saying that this is a desirable property of an economic system seems like an inhumane and, if taken to extremes, systemically dysfunctional position to take. It seems like it incentivizes deliberate complexity in pricing structures--and the theoretical backpressure against those trends (competition by organizations with simpler structures) seems to only very rarely be the equal of its opponent. The alternative isn't "hold everyone's hand through all cost decisions"; the alternative is don't make things worse/more confusing unless you absolutely must. Edit: typo.

weberc2 8y ago
> The alternative isn't "hold everyone's hand through all cost decisions"; the alternative is don't make things worse/more confusing unless you absolutely must. If you're confident and in fact the entire industry is moving in the wrong direction, then you should probably invest as much as you can afford in an airline that is offering simpler plans. For me, I'll trust that the airlines' leaders are the experts in their own market. > saying that this is a desirable property of an economic system seems like an inhumane and, if taken to extremes, systemically dysfunctional position to take. "Choice" (i.e., "freedom") _is_ a desirable property. Sometimes it means people make inefficient choices (per their values); in general, the proper response to this observation is to teach people how to choose efficiently.
- consz 8y ago
  >If you're confident and in fact the entire industry is moving in the wrong direction, then you should probably invest as much as you can afford in an airline that is offering simpler plans. I think people should be heavily criticized for making arguments like this -- it's entirely done in bad faith. You're presenting a fairy tale, a piece of advice that is completely un-actionable for a huge majority of people. What is this person supposed to do, when (a) No such airline exists (b) What sort of marginal impact can <$1000 (presumably the most that can be afforded for this by the majority of people) even have in achieving actual change? If anything, complaining about it to others (online or elsewhere) probably has more efficacy than doing the above.
  - weberc2 8y ago
    Not bad faith; you just missed the joke. (a.1) Of course there are differences in the complexity of airlines' pricing structures. To claim that all airlines' menus are equally complex is an extraordinary claim. (a.2) The extent to which it is hard to find an airline with a very simple pricing structure testifies to the economic infeasibility of these structures unless the OP found a market inefficiency (which was overlooked by the entire industry), in which case he should exploit it to the tune of millions of dollars. (b) Assuming the OP is in fact an airline industry visionary, when other airlines see him making money hand over fist, they'll change their ways.
    - zbentley 8y ago
      > The extent to which it is hard to find an airline with a very simple pricing structure testifies to the economic infeasibility of these structures Perhaps. As I've said elsewhere, another explanation is that it's easier to collude than compete, especially in markets with entry-barrier-induced low participant counts. The "it came to be this way therefore the market has revealed the optimum" claim misses frequent realities of limited market control/visibility, greed/laziness (i.e. collusion), and intermediate or catch-up evolutionary behavior (i.e. it's quite hard, absent lots of historical evidence often lacking in recent markets, to tell whether something represents a stabilizing optimum or a state of flux as emergent behaviors pursue changing realities, and there are many reasons to presume the latter).
AnthonyMouse 8y ago
> saying that this is a desirable property of an economic system seems like an inhumane and, if taken to extremes, systemically dysfunctional position to take. You have it backwards. The problem with simplicity is that your options for a PC become Performance, Mainstream and Economy. If Economy would have been sufficient except for the storage, sorry, you'll have to pay +$300 for Mainstream (which also has a faster processor and more memory) even though faster storage by itself would only have been +$100. There is efficiency in not paying for what you don't need, but it has intrinsic complexity. Or you can just buy Performance, not have to worry about anything, but pay +$800. Having the simple options available is good because some people value time more than money. Having the complex options available is good because some people value money more than time (or can make a complex decision in a small amount of time). Having said that, the charges for checked bags are still ridiculous, but only because the fees exceed the airlines' cost for carrying the bags by such a large amount. Fortunately they're likely to be destroyed by the price comparison sites now listing the fees next to the ticket price, which should reintroduce price competition for the checked bag fee and either get the fee reduced/eliminated or benefit the customer by giving those who don't need to check a bag a disproportionate discount. Or some enterprising airline will realize they can profit from selling the empty space in their planes not being used for checked bags to someone like FedEx to carry packages. Then FedEx will realize they can open a storefront in the airport and charge less than the airlines to ship your luggage and you'll be able to pay FedEx $15 to pay the airline $10 to check your bag, instead of paying the airline $30. Then the airlines will just charge $14.

amptorn 8y ago

> unsavvy customers [...] should expect to pay a premium No, they shouldn't.