surge pricing Archives

In theory, surge pricing is a no-brainer. If prices go up when demand surges at particular times, surge pricing will bring additional supply to the market. While not supporting what appears on the face to be an economically illiterate decision by an Indian court to ban surge pricing the authors of the Economic Times op-ed point to an unnoticed Delhi-specific fact: the only drivers who can respond to the price signal are those outside the area, since only licensed drivers can supply services. This suggests that research that pays attention to the specific conditions is needed. This is what LIRNEasia did with regard to telecom reform; this is what is needed for platforms in developing countries.