Friday, February 15, 2008

Prime CA Real Estate for $20 a Night

For those of you who love the great outdoors, this morning at 7am was the big moment. Its was the time when Yosemite campsites become available for reservation (in July). With 5 separate people all trying to get different sites in Lower Pines, only 2 of us succeeded. The sites were sold out within seconds.

This situation is a great example of a deliberate market failure. It is deliberate because the government does not charge a market clearing price on purpose. We as a nation choose not to charge market value for Yosemite campsites because we want to guarantee access to all Americans and Foreign Tourists. Thus there is a deluge of demand for a limited supply. So in this situation the government relies on a first come, first served system instead. Unfortunately there is a great deal of gaming that can occur in this situation, and it doesn't necessarily result in an equitable allocation. Of course I am grateful for this alternative allocation policy, as we at least have a shot at securing campsites this way.

This situation also has much in common with the one I often study, landing slots at busy airports, which are also allocated on a first come, first served basis.....in aviation, when a resource is underpriced, the price is paid in time and not $$....hence all the delay as aircraft are forced to wait their turn.

2 comments:

Patient Renter said...

This is similar to the situation with concert tickets. When Radiohead tickets go on sale here soon, I'll have less than 5 minutes or so to try and get some before they're sold out.

Of course with concert tickets, we have a secondary market where supply/demand balances out more smoothly, but the transferability of concert tickets (as opposed to campsites, i'd assume) not only allows for a secondary market to exist but also increases the initial sales demand.

Anyways, we tend to go for hotels when visiting Yosemite :)

G Spot1 said...

I highly recommend staying at Yosemite lodge in late winter (like right now). Rent a pair of snowshoes before you go and enjoy the lack of summertime traffic...