When there is an inefficiency (people waiting in long lines for rides), there is also opportunity to make money.
Wednesday, May 15, 2013
Whom should we blame?
Several students wrote to tell me about this story: Wealthy hire disabled guides to skip lines at Disney World.
If you are like most people you reacted with moral outrage at the idea of wealthy able-bodied people using money to take advantage of a benefit preserved for the disabled. Some blame the disabled person who was running the guide service, while others blame the wealthy Manhattanites for using it.
But this is a blog about management, so I focus on the management lesson:
Disney sells VIP access to skip the long lines, which is a type of indirect price discrimination. But there seems to be better ways for Disney to take care of this, like congestion pricing. But just because I can think of another way to do it, the fact that Disney prefers to price this way suggests that there is something I must be missing.
Would love to hear ideas on how Disney can better price rides.
Note that this is an old problem, Mickey Mouse Pricing, with many different facets, as explained by William Allen in his textbook.