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December 7, 2007

Pay for Preference

Greyhound's new priority seating option is another example of good economics. If you've ever ridden on Greyhound (especially from NYC!) you know how bad the lines can get and as a result how irritated people can get. In some senses, I think they're replacing poor management with a cost-benefit exchange, but that doesn't change the fact that it makes sense.

Movie theaters in major urban centers do the same thing by allowing movie-goers to reserve seats in prime locations of the theater, sometimes even with a snack/beverage service. Its been this way on Broadway and stadiums and airlines all along, so why not?

Repugnancy costs originating from cultural mores. That's the answer. But is it a good one?