Thursday, August 23, 2012

Restaurant Pricing

I just stumbled upon, which is a clever platform for variable pricing at restaurants. Table space has different values on different days and at different times: more people go out on the weekends, so demand for fine dinning is higher on a Friday at 7:00pm than on a Tuesday at 3:45pm. Savored allows restaurants to adjust for this by discounting reservations based on the hour of the reservation. This price discrimination enables bargain hunters to get lower prices by making reservations at times when the table space is less valuable. Listing discounts on the Savored website allow the restaurant to advertise to those bargain hunters. Lunch and dinner menus also accomplish this, as do happy hours. How else do restaurants price discriminate?

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty