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Monday 14 December 2009

The commerce of transit

We are off on holiday and yet again sitting in the 'holding pens' called airport transit lounges.

I look around me see if there are any economic lessons to pick up on, as our laboratory is a constantly seething, bubbling cauldron of activity.  Yes, off course I am referring to the laboratory of the experimental, behavioural economist...
And the answer to the question is a resounding yes.
 
An airport transit lounge is a hive of commercial activity.  A few are individual travellers, pairs or family or loose- family groupings.  Some are grumpy, happy, tired, confused  (you obviously spotted me in the crowd) and a range of other states of being.

Everyone knows they are only there for a specified period of time and are desperate to avert the chasms of boredom enveloping them.

Hence some clever people invented the 'Duty Free' shopping experience. What a great way for retailers to boost their profit margins, whilst making us all believe we are saving money because the sales (or consumption) tax has been removed?

We are off to another transit hub, where they introduce another twist in the tail - the foreign exchange issue. Better leave your calculator behind and trust in the information asymmetry of the estimate conversion factor...

theMarketSoul (c) 2009


 
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