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If you had an efficient market, wouldn't a competitor charge just a little less than others who are using surge pricing? Isn't the whole efficient market thing
by twelfthnight 2y ago
If you had an efficient market, wouldn't a competitor charge just a little less than others who are using surge pricing? Isn't the whole efficient market thing about how eventually prices should reach the cost of production, which would not be affected by surge demand?
- ohmyiv 2y ago> If you had an efficient market, wouldn't a competitor charge just a little less than others who are using surge pricing? Absolutely. If everyone raised their prices of umbrellas due to rain, I'd lower my prices a bit to get those customers. I'd probably wind up making more overall too. Hopefully it will also lead to increasing return customers due to goodwill. If everything works out, not only would I sell more umbrellas, but I'd make more money in the future from returning customers. Win for me. And I feel like that's why we _don't_ have surge pricing on everything already.
- senordevnyc 2y agoIf everyone raised their prices of umbrellas due to rain, I'd lower my prices a bit to get those customers. And then so would they, and so would you, and so would they, and pretty soon you'll all find an equilibrium-while-raining price.