Regal Cinemas will introduce surge pricing at some movie theaters next year — Quartz

Markets work best when highly valued goods and services are more expensive. And generally, people are fine with that. We understand that prime cuts of filet mignon cannot cost the same as McDonald’s burgers, and that there’s a reason first-class plane tickets cost more than coach. If these things were all the same price, it would be a disaster, with demand far outstripping supply of sought-after items.

Yet for some reason, for products that cost more or less depending on the time when you buy them, this logic appears to fail us. Surge pricing, the practice of increasing prices at times when demand is high, feels unjust. Uber and Lyft’s practice of raising prices when there is more demand for cars drives customers crazy. When shops charge more for snow shovels during snowstorms, people find it deeply unfair. This shouldn’t be the case: Competitive markets work best when sellers can maximize revenue. This makes more of a product to be available when buyers want it most.

Variety reports that Regal Cinemas will begin testing demand-based pricing (another term for surge pricing) in early 2018. The US’s second-largest theater chain plans to charge higher prices for movies and showtimes that are hot tickets, and lower prices for flops and inconvenient times. Regal CEO Amy Miles said the goal is to “drive incremental revenue in peak periods and incremental attendance in non-peak periods.” The new pricing model will be trialled in several markets that have not yet been announced.

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Regal Cinemas will introduce surge pricing at some movie theaters next year — Quartz.