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Hello:

One of the big differences between how every single one of the other companies you mentioned (hotels, airlines, clubs) set surge pricing and the way you set surge pricing was that they announce the actual price way in advance and then adjust downward if there are empty places. The reason people were upset was not the pricing, it was the fact that they could not plan for the pricing. Any person who had really studied economics could have predicted the reaction you received. As I used to tell my economics students in their first day of class, introduction to economics supply and demand is a pretty lie, but please don't expect this to work in real life. With the exception of the comodity/financial markets (and not even there if you look at the reality) no one uses 'spot' pricing in the real world...at least not in any successful businesses.

Good luck...and if you want more insight there are several texts discussing successful pricing models for handling surge pricing. Feel free to email me if you'd like some references.

2 years, 7 months ago on Surge Pricing Followup

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