Baggage Carousel Econ Lesson

By Amy Alkon


donkeyrock
shared this story
from Advice Goddess Blog.

Baggage Carousel Econ Lesson
David N. Laband writes in the WSJ about “a simple lesson in free-market economics, provided courtesy of the harsh winter weather of recent days in the eastern half of the U.S.”:

Coincidentally, the annual meetings of the American Economic Association were scheduled to take place in Philadelphia, from Jan. 3-6. My friend and colleague, Haizheng Li, flew in to Philadelphia late in the evening of Thursday, Jan. 2, landing around 10:45. As he later told me, by then it was snowing heavily. Because of backed-up air traffic, the pilot was not able to park at their arrival gate for 40 minutes. After de-planing, Haizheng waited for another 40 minutes to retrieve his luggage.

The AEA conference is huge, with several thousand attendees. Under ordinary circumstances, the participating conference hotels are constantly running shuttles to and from the airport to pick up guests. Taxis are running nonstop. Not on this night.

While waiting to collect his luggage, Haizheng learned from a colleague that the hotel shuttle service was taking two hours or longer. Worried, he went out to the taxi line even before getting his luggage. Snow was falling, the line of prospective customers waiting for taxis was long–and there were no taxis in sight. It was near midnight. The taxi staff said it was unlikely any cabs would be coming in such bad weather.

Haizheng and a number of other passengers were facing the grim prospect of an uncomfortable night at the airport. The food vendors were all closed. Haizheng was tired and hungry–and he was scheduled to make a presentation at 8 the next morning.

Unexpectedly, out of the night came a savior. A man walked through baggage claim asking whether any of the recently arrived passengers needed transportation to one of the downtown hotels. Haizheng didn’t ask what the ride might cost, he just said yes. As it turned out, the man took six stranded passengers, plus luggage, to their hotels for $25 each.

No doubt in doing so he broke at least one, probably several, laws regarding passenger transport that are designed to prop up the local taxi cartel. Yet this man’s action dramatically improved the lives of six individuals, each of whom undoubtedly would have been willing to pay much more than $25 to get from the airport to their respective hotels. Haizheng told me he would have paid a lot more.

Euvolutionary Exchange blogs about this, explaining:

The logic of “price-gouging” opponents is sometimes …read more

Source: Donkeyrock_BlurBlog

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