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I'm not sure the psychology works out that way. price sensitive customers probably don't want to let you hold onto an extra $75 of their cash from the time they
by leetcrew 7y ago
I'm not sure the psychology works out that way. price sensitive customers probably don't want to let you hold onto an extra $75 of their cash from the time they make the reservation until they actually fly.
- gruez 7y agoTime value of money of a $200 plane ticket at federal funds rate (for half a year) is like what, $1.5?
- leetcrew 7y agoit's not about the lost opportunity to make an investment so much as tightening the margin for stuff like paying rent, utilities, and credit card bills. $75 isn't enough to make or break my budget, but it's still a lot to have tied up over a service I'm planning not to use. if you're the type of person to aggressively optimize travel for price, it could be a meaningful sum.
- glofish 7y agoPlus it is well established that we are less price-sensitive once the money left our pocket. Most people would end up using more services. Hence even instinctively feels like a much worse deal even if tying up that money would not impact them directly.