Bike rental vs. car rental

by Russ Roberts on July 23, 2012

in Complexity & Emergence, Dinner Table Economics

Why is that you can rent a car for less than $20 a day, but renting a bike costs $10 an hour?

Shouldn’t it be ore expensive to rent a car than to rent a bike?

This is a wonderful example of the challenges of using supply and demand effectively as well as an example of how complicated the world is relative to one’s casual observations.

I should say in advance that I do not know “the” answer but I think I have an idea of how to think about the problem that can lead to understanding the difference.

Feel free to give your thinking in the comments. I will post my ideas in a few days.

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