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.
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.
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.
Are most conference fees OPM?
If not, they might lose the segment that are “sullen procrastinators.”
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.
Comments on this entry are closed.