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Quotation of the Day…

… is from page 291 of GMU Econ alum Liya Palagashvili’s superb 2024 paper “Dynamic Pricing Can Benefit Consumers,” which is chapter 24 in The War on Prices: How Popular Misconceptions About Inflation, Prices, and Value Create Bad Policy (Ryan A. Bourne, ed., 2024):

A counterintuitive point here is that sharp price increases associated with high-demand periods provide a signal to improve long-term supply too. Just as surge pricing for rideshares at the end of a baseball game encourages more drivers both now and after future sporting events, the price signal from a bowling alley being full on weekends despite prices being higher may encourage new entrants to the industry or capacity expansions from the provider. This is a crucial point with regard to the “fairness” of high prices, which are often judged on a very static basis.

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