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Ski-Lift Pricing, with Applications to Labor and Other

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  • Barro, Robert J
  • Romer, Paul M

Abstract

The market for ski runs or amusement rides often features admission tickets with no explicit price per ride. Therefore, the equilibrium i nvolves queues, which are systematically longer during peak periods s uch as weekends. Moreover, the prices of admission tickets are much l ess responsive than the length of queues to variations in demand, eve n when these variations are predictable. Despite the queues and stick y prices, the authors show that the outcomes are nearly efficient und er plausible conditions. They then show that similar results obtain f or some familiar congestion problems and for profit-sharing schemes i n the labor market. Copyright 1987 by American Economic Association.

Suggested Citation

  • Barro, Robert J & Romer, Paul M, 1987. "Ski-Lift Pricing, with Applications to Labor and Other," American Economic Review, American Economic Association, vol. 77(5), pages 875-890, December.
  • Handle: RePEc:aea:aecrev:v:77:y:1987:i:5:p:875-90
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    Cited by:

    1. Gérard P. Cachon & Martin A. Lariviere, 1999. "Capacity Allocation Using Past Sales: When to Turn-and-Earn," Management Science, INFORMS, vol. 45(5), pages 685-703, May.
    2. Julio J. Rotemberg, 2008. "Behavioral Aspects of Price Setting, and Their Policy Implications," NBER Working Papers 13754, National Bureau of Economic Research, Inc.
    3. Ramandeep S. Randhawa & Sunil Kumar, 2008. "Usage Restriction and Subscription Services: Operational Benefits with Rational Users," Manufacturing & Service Operations Management, INFORMS, vol. 10(3), pages 429-447, December.
    4. Pascal Courty & Mario Pagliero, 2008. "Responsive pricing," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(2), pages 235-259, February.
    5. Gérard P. Cachon, 2007. "2007 M&SOM Best Paper Award," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 351-352.
    6. Andre De Palma & Moez Kilani & Robin Lindsey, 2006. "The Economics of Truck Toll Lanes," ERSA conference papers ersa06p896, European Regional Science Association.
    7. Lindsey, Robin & Daniel, Terry & Gisches, Eyran & Rapoport, Amnon, 2014. "Pre-trip information and route-choice decisions with stochastic travel conditions: Theory," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 187-207.
    8. Richardson, Martin, 2002. "Quality and Congestion in Environmental Goods: The Road to the Wangapeka," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 477-496, May.
    9. Stefan Borsky & Paul A. Raschky, 2009. "The Hedonics of Hedonism - Estimating the Value of Risk-Taking Activities," Kyklos, Wiley Blackwell, vol. 62(2), pages 210-225, April.
    10. James G. Mulligan, 2006. "Endogenously determined Quality and Price In a Two-Sector Competitive Service Market With an Application to Down-Hill Skiing," Working Papers 06-01, University of Delaware, Department of Economics.
    11. Bradley M. Braun & Ady Milman, 1990. "Localization Economies in the Theme Park Industry," The Review of Regional Studies, Southern Regional Science Association, vol. 20(3), pages 33-37, Fall.
    12. Julian Manning, 1994. "Existence of Competitive Equilibrium with a System of Complete Prices," GE, Growth, Math methods 9406003, EconWPA.
    13. Wolff, François-Charles, 2014. "Lift ticket prices and quality in French ski resorts: Insights from a non-parametric analysis," European Journal of Operational Research, Elsevier, vol. 237(3), pages 1155-1164.
    14. Bipasa Datta & Clive D Fraser, 2006. "The Company You Keep: Qualitative Uncertainty in Providing Club Goods," Discussion Papers 06/21, Department of Economics, University of York.
    15. Larry Karp & Jeffrey M. Perloff, 2005. "When Promoters Like Scalpers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 477-508, June.
    16. Gérard P. Cachon & Pnina Feldman, 2011. "Pricing Services Subject to Congestion: Charge Per-Use Fees or Sell Subscriptions?," Manufacturing & Service Operations Management, INFORMS, vol. 13(2), pages 244-260, June.
    17. Julian Manning, 1994. "Efficiency in Economies with Jurisdictions and Public Projects," Public Economics 9406004, EconWPA.
    18. Bakos, Yannis & Brynjolfsson, Erik & Lichtman, Douglas, 1999. "Shared Information Goods," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 117-155, April.
    19. David N King & Yue Ma, 2000. "Local authority provision versus club provision," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 18(2), pages 207-223, April.
    20. Orbach, Barak Y. & Einav, Liran, 2007. "Uniform prices for differentiated goods: The case of the movie-theater industry," International Review of Law and Economics, Elsevier, vol. 27(2), pages 129-153.
    21. William H. Sandholm, 1997. "An Evolutionary Approach to Congestion," Discussion Papers 1198, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    22. de Palma, André & Kilani, Moez & Lindsey, Robin, 2008. "The merits of separating cars and trucks," Journal of Urban Economics, Elsevier, vol. 64(2), pages 340-361, September.

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