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Why Not?
I was just invited to a conference -- a very good one in fact -- where the price of registration rises by $150 for every week that passes. This encapsulates at least two principles of behavioral economics. First, it combats our natural tendency to procrastinate. Second, if you register early you feel you have won a bargain when in fact it still costs something. This is of course also a planning externality if they know the number and nature of attendees sooner rather than later.
Posted by Tyler Cowen on July 3, 2008 at 10:03 AM in Economics | Permalink
Comments
Sounds like a potential disaster unless you have an excellent prediction model. Considering that they probably have a fixed limit on attendees due to fire codes or other things, they should probably just raise the price after a fixed number of tickets have sold. Southwest Airlines does something like this.
Posted by: Rimfax at Jul 3, 2008 11:00:09 AM
I am fairly lazy, but I am also on the cheap
side so these things so this is a definite push/pull thing with me.
I ran a marathon last year, but didn't register
earlier, just in case I wanted to punk out or
got hurt. I wanted the chance that I would
run it to increase before I committed to the entrance fee.
Another friend of mine registered early, and got the discount, but didn't do it for the lower price, but did so because he felt more
motivated by signing up early.
Posted by: DougEFresh at Jul 3, 2008 11:02:46 AM
There is a New Year's Eve party that has a similar plan. It takes advantage of network effects, that getting some members of a group to commit to it, causes other members to commit since that's where the group is going. When groups are more nebulous, the effect becomes even more dramatic. If I have two independent friends who I find out are both going, I'm even more inclined to go.
My group of friends had members that went last year and rated it highly. So we went this year, and it seems their sales tactics were too effective, because it became impossible to get a drink. Thus, I won't be going next year. I could see oscillation becoming a dominant pattern.
I don't know if similar effects happen with respect to academic conferences.
Posted by: Craig at Jul 3, 2008 11:23:44 AM
Most conferences have lower fees before some date and then higher after
that. This certainly makes sense, assuming that date to be an important
one for planning purposes. I do not see much point in this week by
week sort of thing. Sounds like they are trying to gather data for a
paper that will not be interesting enough to get into JEBO, :-).
Posted by: Barkley Rosser at Jul 3, 2008 2:07:24 PM
Are most conference fees OPM?
If not, they might lose the segment that are "sullen procrastinators."
Posted by: odograph at Jul 3, 2008 3:28:07 PM
Is this an econ conference? Because if not, it could engender resentment.
Isn't there such a thing as a "fairness constraint?" People sometimes resent price discrimination (even though this isn't the typical charge-more-to-the-willing variety).
I bet if you tried to impose this structure on a conference of literature professors, they'd have your head.
Posted by: gm at Jul 4, 2008 7:17:40 AM
There is a disadvantage to this system. If someone finds out that they could have gone for much less had they registered earlier, they may opt not to go at all, just to resolve the cognitive dissonance.
Posted by: John at Jul 4, 2008 10:34:03 PM
Tyler, the more intersting story will be when you tell us if you actually register, and at what price.
Posted by: Bob Meade at Jul 6, 2008 6:50:02 AM
