Pay for Convenience: Travel Edition

I'm a big fan of paying for convenience. In any decision, you have to weigh the costs and the benefits very carefully. That's why, on a recent trip to visit my sister and her family in Minneapolis, I paid the person next to me $10 to swap his aisle seat for my middle seat. Since it was a family trip paid for with SkyMiles and companion passes, we didn't exactly get our pick of the seats. I was fine sitting in the middle seat in the back of the plane from Birmingham to Atlanta because it's a pretty quick flight, but I was less enthusiastic about that on the two-hour flight from Atlanta to Minneapolis.

What did I give up? Anything else I could have gotten for $10--say, a fast food meal.

What did I get? a little more space (which meant a sunnier disposition when we landed), aisle access so I could get up and down without having to ask someone to move, and enough elbow room that I could open my laptop and get some work done.

Verdict: worth it.

It occurs to me that this is also a pretty good metaphor for equilibrium: equilibrium is like a situation on a plane where no one could make an offer attractive enough for someone else to switch seats with them. When the plane takes off, every seat is occupied by its highest-value occupant. Of course, a lot of the really interesting analytical stuff gets started when transaction costs get in the way--but that's another discussion for another day.