Now, the idea of all-inclusive has a STRONG negative appeal to me, and I don't know if it's just because it leads to minimal acceptable quality as a ruling standard. I think also because it tends to encourage overconsumption (in me, anyway, and I really don't need THAT in my environment ;) both impulsive and sort of semi rational "to get my money's worth". I also always have the (adjacent) feeling that I might be paying for stuff I don't want or need, so what I ACTUALLY want would be cheaper.
As to emptyish restaurants, few hypotheses:
1) the numbers allowed to book might be optimised for the minimal kitchen staff costs, not seat capacity
2) if it's more expensive than buffet (and also, as an aside, the idea of eating buffet food in a hot country resort feels me with with certain trepidation personally...) to make/serve, the "swim up bar effect" might be in place
3) people book more than one slot or place so they have a choice later -- if possible? I'm sure it must be possible, eg for different people in the same party/room to book different dinners?
Just a quick note to say that re (2) it's all included so there's no price and on (3) I'm not sure but I *think* that only one person per party can make a reservation. I think reservations are tied to rooms, but I'm actually not sure about that. Could be. I'd lean toward (1)... And thanks!
So I am a big fan of all-inclusive resorts and have been going to them since my early teens when my parents took me.
One story to demonstrate the incentive system, on an all-inclusive trip in my early 20's, I was at the resort night club bar waiting for a drink, an attractive well dressed 20 something woman stood between the male bartender and I, also looking for a drink. The bartender looked at her, went right past her, and took my drink order. She was surprised enough at that turn of events, which would never happen in a regular bar, that she looked at me questioningly to which I responded, "I tip." She nodded. The bartender came back with my drinks and immediately went to her.
Much of the incentive structure you talk about can be circumvented by taking a stack of small bills with you on the trip. Word spreads incredibly fast among the staff and no one bats an eye at wet bills at the swim up bar.
Ah, that is an excellent example of the dynamics of these incentives. The surprise you mention is so interesting and indicates people's expectations under normal (not all-in) conditions. Great tip (as it were) for making the most of your all-in time. Thanks for this interesting comment!
When I was about 18 or 19, I went on vacation with a group of friends. Being impoverished college students, we were excited to find an all-you-can-eat buffet restaurant.
One of the friends had grown up working in his family's restaurant, so he was quite aware of the variations in profitability among various menu items.
In order to get our money's worth, we didn't eat all day so we'd be able to really take advantage of the all-you-can-eat benefit. I was starving by the time we went to dinner, and as soon as I got in line at the buffet I started loading my plate up with the first item I saw, which was macaroni and cheese.
My restaurant-savvy friend was horrified at this rookie mistake. "Don't take that! Don't take any of this stuff!" [gesturing at the pasta, rolls, potatoes, and rice] "Hold out for the stuff at the other end - the roast beef, the spare ribs, the seafood! That shit's expensive, all this stuff here doesn't cost them hardly anything to make! You gotta load up on the meat and seafood to get your money's worth! All that mac-and-cheese on your plate cost them like six cents to make - they're counting on you filling up on that and not having room for the roast beef!"
Well. That was a valuable lesson in economics for me. Ever since then, I've been very suspicious of all-inclusive pricing, because I know that they are counting on customers to mostly gravitate towards the stuff that is super-cheap to provide so that they don't notice that the premium, high-value items are either scarce and require significant time waiting in line, or else are only available for a price upgrade.
Interesting, thanks for the comment! There’s a fascinating psychological element in here that economists have talked a bit about. Suppose you would have gotten 8 enjoyment units out of the mac and cheese but only 5 enjoyment units out of the crab, thinking now only about the food and flavor per se. In such a case, it is still rational to heed your friend’s advice? A traditional economist would say no because all that (should) matter to you is your own enjoyment, or “utility function,” as the economist would say. There are arguments that go the other way. For instance, cost to the seller might predict how much enjoyment a consumer will get. And there might be a psychological benefit to costing the restaurant as much as possible. But, yes, the intuition is real. If you want to go down the rabbit hole on the academic side, an entry point is Dick Thaler’s notion of “transaction utility,” which is basically the idea that you want to feel like you’re getting a good deal. Here’s a classic paper: https://www.sciencedirect.com/science/article/abs/pii/0167268180900517.
Well said. There will always be scarcity — the question is what kind. Ancestral scarcity was often about survival goods: food, shelter, warmth. A bad famine could eliminate your entire kin group and with it your inclusive fitness in one blow. Modern scarcity is increasingly about positional goods — a beachfront lot, a top-tier mate, a coveted job. Is there any literature you'd point to on quantifying that shift?
Thanks for the kind words! Let’s see, Hirsch’s Social Limits to Growth is the classic cite for positional goods. More accessible would Robert Frank’s The Darwin Economy, I think. Frank is an excellent writer and has hit these themes in that book and elsewhere. Geoffrey Miller’s Spent is also excellent on this. Maybe Nonzero by Robert Wright? Sort of gets at related themes... I'd probably start with Miller. Easiest read, most bathed in evolutionary reasoning. Thanks again!
Is there a typo (“long” not “low”) in “Could healthcare come to resemble the swim-up bar, with low wait times and a mediocre product?”? (And the answer is “yes”, e.g. see the UK system.)
It seems like the wait times are an easy way to measure if supply needs to be increased. It doesn't matter all that much for a bar, but for healthcare where the stakes are high it seems like minimizing wait times should be a priority
I agree. Wait times can be a signal that there is insufficient supply and/or prices are too low, depending on how the good/service is allocated. Restaurants that get booked up fast, suggesting residual demand, can increase prices if they can't make their dining room bigger, or what have you. This dynamic is why prices are, usually, good signals. But, yes, totally agree, on the general point. Healthcare is weird in the U.S. because the consumer of the product (the patient) isn't paying the price (because the insurance company is). This opacity, among other things, prevents healthcare markets from coming to equilibrium. To be clear, I'm not saying I have a better idea for how to run the healthcare system...
Healthcare is also weird in general because often the ones who need it the most are not capable of paying the price for it. And that's not just physical health but mental as well. Especially if they can't afford insurance
Having had very active little boys, we decided the all inclusive would be the best compromise for family holidays. Im team Esther Dyson. Rather pay $20 for a cocktail than wait in line like cattle for a “free” gasoline adjacent cocktail. Happy we did it ( boys memories) and happy i never have to do it ever again. I prefer a “staycation”. Great essay. Thank you.
When the price system is absent, other measures can be discovered. At my all-inclusive resort I don't bother with fine dining reservations. I just show up at prime time wearing a nice dinner jacket. In addition to elevating the style quotient, I slip a few bucks to the hostess. She gets the money, but bears no cost in providing the food or premises. So of course she us happy to see me. I tip the waiters too after the meal. They remember me next time, even if that is a next year.
Like many people I am dismayed by tip inflation on payment machines. But going tip free? No way, been there, done that, suffered the miserable service in socialist paradises.
As an employer, commissions, task completion rewards, or profit sharing, call it what you will, is shockingly motivating to staff. It is something they can control, measure, and take home. Best tied closely to identifiable behavior and paid promptly.
As my mother always said, you get what you pay for.
Not to take away from the excellent post, but the examples of scarcity can be a bit better. "...only one person can live in the house on the cape and only one person can marry the fairest of them all." Com'n. An enterprising contractor can build a high rise on the beach (just pay the council/Mayor enough money for their campaigns), and as to marriage with only one fair lady- how about polygamy!?
First, thanks for the kind words and for the comment. The examples are supposed to evoke the general idea that some goods are positional, as economists like to say. You can substitute any example that illustrates the point - the house *closest* to the cape, say, and only one person can marry the fairest of them all *monogamously*. But, yeah, point taken. Probably I could have chosen better examples. Fair.
That was supposed to be "long" wait times. There was a typo in the original. Fixed in the posted version. Yes, my idea was to try to draw the analogy and consider how health care is allocated in the context of these ideas. My visit to my primary health care feel like a swim up bar in the sense that I generally don't pay (much) for the visit but I wind up waiting to get an appointment and then to be seen when I am there. What would a simple check-up look like in a world in which I paid the full cost of the visit and could pick any doctor I chose, rather than the one specified by my insurance? I don't know, but, again, health care is really complicated.
Very good point on the laboratory aspect.
Now, the idea of all-inclusive has a STRONG negative appeal to me, and I don't know if it's just because it leads to minimal acceptable quality as a ruling standard. I think also because it tends to encourage overconsumption (in me, anyway, and I really don't need THAT in my environment ;) both impulsive and sort of semi rational "to get my money's worth". I also always have the (adjacent) feeling that I might be paying for stuff I don't want or need, so what I ACTUALLY want would be cheaper.
As to emptyish restaurants, few hypotheses:
1) the numbers allowed to book might be optimised for the minimal kitchen staff costs, not seat capacity
2) if it's more expensive than buffet (and also, as an aside, the idea of eating buffet food in a hot country resort feels me with with certain trepidation personally...) to make/serve, the "swim up bar effect" might be in place
3) people book more than one slot or place so they have a choice later -- if possible? I'm sure it must be possible, eg for different people in the same party/room to book different dinners?
Probably no penalty for simply not showing up for your reservation.
Just a quick note to say that re (2) it's all included so there's no price and on (3) I'm not sure but I *think* that only one person per party can make a reservation. I think reservations are tied to rooms, but I'm actually not sure about that. Could be. I'd lean toward (1)... And thanks!
More expensive for the resort to provide.
So I am a big fan of all-inclusive resorts and have been going to them since my early teens when my parents took me.
One story to demonstrate the incentive system, on an all-inclusive trip in my early 20's, I was at the resort night club bar waiting for a drink, an attractive well dressed 20 something woman stood between the male bartender and I, also looking for a drink. The bartender looked at her, went right past her, and took my drink order. She was surprised enough at that turn of events, which would never happen in a regular bar, that she looked at me questioningly to which I responded, "I tip." She nodded. The bartender came back with my drinks and immediately went to her.
Much of the incentive structure you talk about can be circumvented by taking a stack of small bills with you on the trip. Word spreads incredibly fast among the staff and no one bats an eye at wet bills at the swim up bar.
Ah, that is an excellent example of the dynamics of these incentives. The surprise you mention is so interesting and indicates people's expectations under normal (not all-in) conditions. Great tip (as it were) for making the most of your all-in time. Thanks for this interesting comment!
When I was about 18 or 19, I went on vacation with a group of friends. Being impoverished college students, we were excited to find an all-you-can-eat buffet restaurant.
One of the friends had grown up working in his family's restaurant, so he was quite aware of the variations in profitability among various menu items.
In order to get our money's worth, we didn't eat all day so we'd be able to really take advantage of the all-you-can-eat benefit. I was starving by the time we went to dinner, and as soon as I got in line at the buffet I started loading my plate up with the first item I saw, which was macaroni and cheese.
My restaurant-savvy friend was horrified at this rookie mistake. "Don't take that! Don't take any of this stuff!" [gesturing at the pasta, rolls, potatoes, and rice] "Hold out for the stuff at the other end - the roast beef, the spare ribs, the seafood! That shit's expensive, all this stuff here doesn't cost them hardly anything to make! You gotta load up on the meat and seafood to get your money's worth! All that mac-and-cheese on your plate cost them like six cents to make - they're counting on you filling up on that and not having room for the roast beef!"
Well. That was a valuable lesson in economics for me. Ever since then, I've been very suspicious of all-inclusive pricing, because I know that they are counting on customers to mostly gravitate towards the stuff that is super-cheap to provide so that they don't notice that the premium, high-value items are either scarce and require significant time waiting in line, or else are only available for a price upgrade.
Interesting, thanks for the comment! There’s a fascinating psychological element in here that economists have talked a bit about. Suppose you would have gotten 8 enjoyment units out of the mac and cheese but only 5 enjoyment units out of the crab, thinking now only about the food and flavor per se. In such a case, it is still rational to heed your friend’s advice? A traditional economist would say no because all that (should) matter to you is your own enjoyment, or “utility function,” as the economist would say. There are arguments that go the other way. For instance, cost to the seller might predict how much enjoyment a consumer will get. And there might be a psychological benefit to costing the restaurant as much as possible. But, yes, the intuition is real. If you want to go down the rabbit hole on the academic side, an entry point is Dick Thaler’s notion of “transaction utility,” which is basically the idea that you want to feel like you’re getting a good deal. Here’s a classic paper: https://www.sciencedirect.com/science/article/abs/pii/0167268180900517.
If you ever do a Disney trip would be interesting to hear an economist's take as many aspects are marketised a pretty sophisticated way.
By a strange coincidence, my next post is about Disney ticket pricing systems over time, connecting to the ideas in post. Watch this space!
Well said. There will always be scarcity — the question is what kind. Ancestral scarcity was often about survival goods: food, shelter, warmth. A bad famine could eliminate your entire kin group and with it your inclusive fitness in one blow. Modern scarcity is increasingly about positional goods — a beachfront lot, a top-tier mate, a coveted job. Is there any literature you'd point to on quantifying that shift?
Thanks for the kind words! Let’s see, Hirsch’s Social Limits to Growth is the classic cite for positional goods. More accessible would Robert Frank’s The Darwin Economy, I think. Frank is an excellent writer and has hit these themes in that book and elsewhere. Geoffrey Miller’s Spent is also excellent on this. Maybe Nonzero by Robert Wright? Sort of gets at related themes... I'd probably start with Miller. Easiest read, most bathed in evolutionary reasoning. Thanks again!
Is there a typo (“long” not “low”) in “Could healthcare come to resemble the swim-up bar, with low wait times and a mediocre product?”? (And the answer is “yes”, e.g. see the UK system.)
It seems like the wait times are an easy way to measure if supply needs to be increased. It doesn't matter all that much for a bar, but for healthcare where the stakes are high it seems like minimizing wait times should be a priority
I agree. Wait times can be a signal that there is insufficient supply and/or prices are too low, depending on how the good/service is allocated. Restaurants that get booked up fast, suggesting residual demand, can increase prices if they can't make their dining room bigger, or what have you. This dynamic is why prices are, usually, good signals. But, yes, totally agree, on the general point. Healthcare is weird in the U.S. because the consumer of the product (the patient) isn't paying the price (because the insurance company is). This opacity, among other things, prevents healthcare markets from coming to equilibrium. To be clear, I'm not saying I have a better idea for how to run the healthcare system...
Healthcare is also weird in general because often the ones who need it the most are not capable of paying the price for it. And that's not just physical health but mental as well. Especially if they can't afford insurance
Oops. Yes. Fixed. And also yes. :-)
Having had very active little boys, we decided the all inclusive would be the best compromise for family holidays. Im team Esther Dyson. Rather pay $20 for a cocktail than wait in line like cattle for a “free” gasoline adjacent cocktail. Happy we did it ( boys memories) and happy i never have to do it ever again. I prefer a “staycation”. Great essay. Thank you.
When the price system is absent, other measures can be discovered. At my all-inclusive resort I don't bother with fine dining reservations. I just show up at prime time wearing a nice dinner jacket. In addition to elevating the style quotient, I slip a few bucks to the hostess. She gets the money, but bears no cost in providing the food or premises. So of course she us happy to see me. I tip the waiters too after the meal. They remember me next time, even if that is a next year.
Like many people I am dismayed by tip inflation on payment machines. But going tip free? No way, been there, done that, suffered the miserable service in socialist paradises.
As an employer, commissions, task completion rewards, or profit sharing, call it what you will, is shockingly motivating to staff. It is something they can control, measure, and take home. Best tied closely to identifiable behavior and paid promptly.
As my mother always said, you get what you pay for.
Not to take away from the excellent post, but the examples of scarcity can be a bit better. "...only one person can live in the house on the cape and only one person can marry the fairest of them all." Com'n. An enterprising contractor can build a high rise on the beach (just pay the council/Mayor enough money for their campaigns), and as to marriage with only one fair lady- how about polygamy!?
First, thanks for the kind words and for the comment. The examples are supposed to evoke the general idea that some goods are positional, as economists like to say. You can substitute any example that illustrates the point - the house *closest* to the cape, say, and only one person can marry the fairest of them all *monogamously*. But, yeah, point taken. Probably I could have chosen better examples. Fair.
"Could healthcare come to resemble the swim-up bar, with low wait times and a mediocre product?"
I love the analogy but don't we already have a lot of that? What are 10 minute doctor visits?
That was supposed to be "long" wait times. There was a typo in the original. Fixed in the posted version. Yes, my idea was to try to draw the analogy and consider how health care is allocated in the context of these ideas. My visit to my primary health care feel like a swim up bar in the sense that I generally don't pay (much) for the visit but I wind up waiting to get an appointment and then to be seen when I am there. What would a simple check-up look like in a world in which I paid the full cost of the visit and could pick any doctor I chose, rather than the one specified by my insurance? I don't know, but, again, health care is really complicated.