But the pricing feature about which I will rhapsodize is, of course, the dynamic pricing: “Saturday at 8 PM will be more expensive than Wednesday at 9:30 PM”. This price discrimination is brilliant but not novel, although its use in restaurant pricing is. It is a decentralized mechanism that enables consumers to sort themselves according to their their willingness to pay, their preferences and their price elasticity of demand while simultaneously enabling the seller to maximize revenue. Combined with the “concert ticket” design, this pricing structure generally looks like a good setup for profit maximization. And given what has driven Achatz’s popularity and the fact that the time-place “Paris 1912″ idea is more like entertainment than any dining experience I know of other than Medieval Times, I think the price discrimination is also a valuable way to allocate dining spaces over which there will probably be excess demand.

~alex

While these markets have yet to start running (and reducing risk), they do seem to be in the mold of the types of markets that Robert Shiller suggests, which manage the risk of such things as changes in housing prices or changing careers.

While managing risk in the movie business may not be a great social need, it is good to see these alternative markets being created. Better management of risk means more entrepreneurial activity. So, can we can expect a more eclectic set of movies to be produced in the future?

~alex

“We’re seeing a disproportionate number of users driving consumption [of the wireless spectrum],” Ralph de la Vega, AT&T Mobility president, said at the conference.

“If we don’t find a way to keep them from crowding out others, we’re going to have a very significant issue.”

Mr de la Vega said the top 3 per cent of its smartphone customers were responsible for 40 per cent of data usage, consuming 13 times more than the average smartphone user. With new smartphones that have software from Google and others coming, and the prospects of wider distribution of broadband-enabled notebook PCs, the demands for connectivity will continue to jump geometrically.

In other words, fairly soon the government is going to have to make some hard decisions about how the spectrum should be allocated. I wonder if this will lead to more expensive data plans, which are already fairly expensive (at least to me).

~alex

But when you went to the site the UI was pretty poor, and from what I saw last week, just before they shut down, they weren’t making any improvements. Just to find a player to trade on took some effort.

Of course there are myriad reasons why a site fails (and to be fair, ProTrade has now got on the Facebook bandwagon and is a Facebook app, the last chance of many failed businesses). But I have to believe that poor UI was part of the reason. After all, if people can’t figure out how to trade on your site, then people won’t play. And it’s not like there aren’t a plethora of rabid sports fans.

So, goodbye ProTrade.com. We hardly knew you. Even worse, we didn’t understand your UI.

All my Alex Ovechkin stock, blown away in the wind. Buh Bye.

~alex

But that has been corrected thanks to a new paper about online dating (Frost, Jeana H., Zoe Chance, Michael I. Norton, and Dan Ariely. People Are Experience Goods: Improving Online Dating with Virtual Dates. Journal of Interactive Marketing 22, no. 1 (winter 2008): 51-62.). Here’s the abstract (emphasis mine):

We suggest that online dating frequently fails to meet user expectations because people, unlike many commodities available for purchase online, are experience goods: Daters wish to screen potential romantic partners by experiential attributes (such as sense of humor or rapport), but online dating Web sites force them to screen by searchable attributes (such as income or religion). We demonstrate that people spend too much time searching for options online for too little payoff in offline dates (Study 1), in part because users desire information about experiential attributes, but online dating Web sites contain primarily searchable attributes (Study 2). Finally, we introduce and beta test the Virtual Date, offering potential dating partners the opportunity to acquire experiential information by exploring a virtual environment in interactions analogous to real first dates (such as going to a museum), an online intervention that led to greater liking after offline meetings (Study 3).

Hat tip to Al Roth, who is not only an esteemed academic, but a pretty good blogger, too.

~alex

I have a really hard time with ideas like this. In this case a social currency is really nothing more than a reputation system where the points you accumulate can be traded for something. And reputation systems, while not being totally divorced from reality, often reward the most active people in the system. The points one accumulates in the system reflect merely the world of the system, not the real world. (It’s not unusual to find real world experts with low reputation scores for a particular system, but that says more about how busy the expert is, not about their actual expertise.)

The WSJ post describes Seriosity, a product which uses the idea of a social currency to help people get attention. (For example, I’ve earned a certain number of “Serios” so now I can make my boss pay attention to my emails.) The trouble with this is that it’s way to easy to imagine scenarios where the amount of social currency one has, or decides to spend, has nothing to do with the quality of what’s being communicated. In other words, following our example, just because someone who works for me decides to spend a lot of Serios to get my attention, how do I know what they have to say is something worthwhile.

Humans already have countless ways to make these types of judgments (some of which may certainly be flawed). But I have a hard time believing that introducing a social currency is going to make these types of judgments any easier. In fact, it seems that introducing a social currency just makes things more confusing.

~alex

“Prices just fell off a cliff,” says Dina Astell of the Racehorse Owners Association. “Trainers who used to get credit from their banks stopped getting credit.”

Now all eyes are on the sale of two year olds, hosted by Tattersalls, to be held tomorrow and Wednesday. It uses the old English coinage of guineas to price its sales.

Last year’s record sale raised 11.88m guineas or just under £12.5m from the auction of 116 racehorses. But this year prices are expected to fall following the onset of the worldwide recession and the collapse of value in other asset classes.

Paul Roy, chairman of the British Horseracing Authority and a former Merrill Lynch banker, says Tattersalls is unlikely to repeat last year’s successes. “Generally you have got to think that prices are going to be down based on the prices in October,” he said.

“People haven’t stopped talking about recession. The trend we have seen oversees is definitely down. Some of the economic issues haven’t gone away. There is less money around and less buyers.”

However, in spite of the downturn the success or failure of the sale could rest on Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, and his Godolphin stable, which is based near Newmarket.

Ed Prosser, who covers bloodstock sales for the Racing Post newspaper, says: “Whatever the Maktoums decide to do is going to be absolutely crucial in determining how the breeze-up sale at Tattersalls is going to go. They will have a huge bearing on how the other major sales perform this year because nobody else is spending their volume of money at the top level.”

As the Sheikh goes, so goes the market for race horses

~alex

To quote the article:

The Russian domain .ru saw growth of 11 per cent and the Chinese domain .cn grew 8 per cent. Those figures were boosted by new “internationalised” domain names that do not use the Latin alphabet.

Developed markets suffered more, with fourth-quarter registrations for .com and .net domain names declining 9 per cent against the third quarter of 2008 and 16 per cent compared with the final period of 2007.

“What we can see is a little slowdown on the [pay per click] market,” said Tobias Wann, head of Verisign’s domain name services in Europe. Pay per click sites are created to carry only advertising.

“But there is also a little less [registration] activity on traditional domain names,” Mr Wann added.

So perhaps your crazy domain name hasn’t been taken after all … yet.

Excellent! www.WinADateWithAMonkey.com is still available!

~alex

From the FT:

“In some fancy restaurants you don’t need to make reservations anymore. Consumers have traded down. They now go to cheaper places,” says Mr Ng, who estimates about one in 10 customers are new patrons who have given up expensive meals and opted for Fairwood.

“You now see more people in business suits in Fairwood. Some fund managers tell me they eat at our restaurants too,” says Mr Ng.

While retail in general is hard hit by sinking consumer confidence and lower spending, Mr Ng says fast food has been able to escape the turbulence because people have to fill their stomachs, no matter what.

Amen.

~alex

Closer to home is the poor lobsterman — of whom UsableMarkets knows one or two — who has to suffer good harvests and falling demand. (From the FT: Maine lobstermen suffer as prices fall)

As always, a tasty bit (with butter):

Seafood shops along Portland Harbor are selling lobsters for as little as $3.89 per pound, which is about what you pay for a pound of cold cuts at the supermarket. The low prices are due mainly to an imbalance in lobster supply and demand. Consumers are dining out less at a time when the lobster catch in Maine and Canada has increased by between 10 and 20 per cent from last year.

“Consumers started pulling back from going out to eat as often and pulling back on discretionary spending,” says John Norton, president and chief executive of Cozy Harbor Seafood, a seafood processor in Portland. “To a certain extent, lobster is a celebratory item and people weren’t feeling celebratory in October.”

Revenge of the lobsterman … who’s making less that $4.00 per pound

~alex