US

Surge Pricing

Using surge pricing to allocate transportation services — such as Uber does with its cars — raises consumer welfare through various potential channels, such as increasing the supply of those services, allocating them to people who desire them the most, and reducing search and queuing costs.

Responses weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Agree
3
Bio/Vote History
Alesina
Alberto Alesina
Harvard
Strongly Disagree
10
Bio/Vote History
Altonji
Joseph Altonji
Yale
Strongly Agree
8
Bio/Vote History
Price responses to predictable surges (New Years) make sense.
Auerbach
Alan Auerbach
Berkeley
Agree
7
Bio/Vote History
Autor
David Autor
MIT
Strongly Agree
10
Bio/Vote History
Amazing that more things aren't price this way -- they should be.
Baicker
Katherine Baicker
University of Chicago
Agree
4
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT
Strongly Agree
8
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
5
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Uncertain
4
Bio/Vote History
Answer depends on particular market. Competition might be too limited on days with low supply and customers might be "taken for a ride."
Chetty
Raj Chetty
Harvard
Strongly Agree
7
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
6
Bio/Vote History
Welfare-reducing price discrimination outcomes are feasible, but the increase in supply in this example clearly enhances consumer welfare.
Currie
Janet Currie
Princeton
Agree
8
Bio/Vote History
Cutler
David Cutler
Harvard
Agree
6
Bio/Vote History
Mostly agree, but watch out for increasing the prices of subways and buses at times when lots of people want to ride them.
Deaton
Angus Deaton
Princeton
Strongly Disagree
10
Bio/Vote History
Efficiency is NOT the same as welfare! This is probably a good policy, but some people will lose.
Duffie
Darrell Duffie
Stanford
Strongly Agree
1
Bio/Vote History
This is basic microeconomics. Pricing different services differently improves the allocation of services, assuming no serious externalities.
Edlin
Aaron Edlin
Berkeley
Agree
7
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Agree
5
Bio/Vote History
Einav
Liran Einav
Stanford
Strongly Agree
8
Bio/Vote History
Fair
Ray Fair
Yale
Agree
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT
Strongly Agree
8
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Agree
6
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Agree
8
Bio/Vote History
I know it pisses people off but it is true
Greenstone
Michael Greenstone
University of Chicago
Strongly Agree
8
Bio/Vote History
It is critical that the prices are transparent. Possible that redistribution goals are harmed but it is inefficient means to redistribute
Hall
Robert Hall
Stanford
Strongly Agree
10
Bio/Vote History
Real-time market clearing pricing is gaining ground, over fierce opposition from all but a small band of economists and entrepreneurs.
Hart
Oliver Hart
Harvard
Uncertain
10
Bio/Vote History
Consumer plus producer surplus should rise but in the absence of competition consumer surplus may not. With competition consumers will gain.
Holmström
Bengt Holmström
MIT
Agree
8
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Strongly Agree
10
Bio/Vote History
Hoynes
Hilary Hoynes
Berkeley
Strongly Agree
10
Bio/Vote History
Judd
Kenneth Judd
Stanford
Agree
6
Bio/Vote History
Kaplan
Steven Kaplan
Chicago Booth
Strongly Agree
10
Bio/Vote History
I have first hand experience. Faced with long airport taxi lines late in the evening, the extra amount to use Uber is a bargain.
Kashyap
Anil Kashyap
Chicago Booth
Agree
7
Bio/Vote History
The alternative is standing in the rain or waiting forever at rush hour, sometimes paying the premium is just much better
Klenow
Pete Klenow
Stanford
Strongly Agree
5
Bio/Vote History
As long as it doesn't make them angry.
-see background information here
Levin
Jonathan Levin
Stanford
Strongly Agree
8
Bio/Vote History
Maskin
Eric Maskin
Harvard Did Not Answer Bio/Vote History
Nordhaus
William Nordhaus
Yale
Agree
8
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Uncertain
7
Bio/Vote History
Allocation efficiency improves but there are gainers and losers and a "welfare" assessment depends on how one weights individual outcomes.
Saez
Emmanuel Saez
Berkeley
Agree
6
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Agree
8
Bio/Vote History
Surge pricing enhances efficiency, for the reasons listed. Efficiency is not the only goal; anti-gouging laws reflect other worthy goals.
Scheinkman
José Scheinkman
Columbia University
Strongly Agree
9
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Strongly Agree
9
Bio/Vote History
Uber is making a market, so this question just asks whether having price change to balance supply and demand is a good thing.
Shapiro
Carl Shapiro
Berkeley
Strongly Agree
9
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Strongly Agree
10
Bio/Vote History
Shin
Hyun Song Shin
Princeton Did Not Answer Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
No Opinion
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
Uncertain
5
Bio/Vote History
Uber's ability to increase supply in the short run appears small so price increase may be mostly a transfer to Uber.
Udry
Christopher Udry
Northwestern
Agree
7
Bio/Vote History
Designed to get us in trouble with non-economist family and friends! It's not as simple as we teach in Intro; but claim is mostly true.