On 3/7/07, Leigh Meyers <[EMAIL PROTECTED]> wrote:
Every Friday and Saturday night on the motel strip in Santa Cruz, many of the motels will keep a number of rooms vacant until way late at night when the bar crowd is out looking for a room to keep off the road... Then it's whatever the market will bear... Even if a couple of rooms don't get rented, they might still make out better than having rented them at a cheaper rate earlier in the evening.
This sounds like one of those brilliant examples of "economic science" in action from Freakonomics. Except those guys manage to spin such failures of pricing theory into a triumph of "economic reasoning".
Gambling on business transactions WOULD keep what appears to be valid economic theory from panning out as predicted. This is one of the reasons I think derivatives and their market are truly social diseases that damage the societies they leech on.
I don't see the connection to derivatives. -raghu.
