Dan Hill asks

Why does the liklihood of free internet decrease as the hotel price increases?

My answer: The more expensive the hotel, the more likely it will have many business travelers.  Those people are less price sensitive, especially for add-ons.  The greater dispersion of valuations also increases the incentive to price discriminate and, in essence, charge them a higher rate.  If Internet service is averaged into the basic price, Internet users receive an implicit discount.  Why offer that discount to your business travelers?  Steve Landsburg wrote a short piece on this for Slate.

Here is Dan’s original question.


Comments for this post are closed