30 May 2008

My Inner Economist Screams

This morning at the Dubai airport I was at first delighted to see that they had free internet...for about 2 seconds, before my inner economist hollered at me. And then I thought, there will be an undersupply/overdemand. And sure enough, I had to wait in line. But it's not just that the free-ness created more demand; it also caused people to linger longer, further delaying other would-be users.

That was the overdemand side. The undersupply came in the form of non-working terminals--the first three I tried to access! (Of course I got to them first, they were the first to open up because no one lingered at them.) The grubby little storefront internet cafes near the Gold Souk in Dubai, which were not free (although at 85 cents an hour it was almost like free to an American) were in better operating condition--all their terminals worked. Of course they were doing a booming business, and a down terminal meant a loss of revenue.

The only surprising thing about the event was that I actually bought in to the idea of free internet service for a moment. I guess my inner economist was still drowsy.

And now I sit in an internet cafe that is right beside my nicely old-fashioned hotel in the old city district of Damascus, again blogging effortlessly at a pittance per hour. The concept of government providing for the public good is so compelling, but it just turns out so often that greedy individuals just manage to provide it so much better. "Invisible hand" indeed.


James K said...

You can ignore economics, but economics won't ignore you.

However, I should not that there are some viable for free business models around. Someone has to pay, but its not always the user.

James Hanley said...

There was no advertising or anything else to suggest that this was that type of business model, so no one is harmed but the "customer."

James K said...

Yes, well that's different then.