Different River

”You can never step in the same river twice.” –Heraclitus

February 7, 2005

The Economics of Being Late

Filed under: — Different River @ 11:42 pm

Ever wonder why meetings usually start late? Andrew Chamberlain over at The Idea Shop has an economic explanation, based on game theory, as to why punctuality is inefficient, or in other words, why people are consistently late for meetings. You have to read all the way through the “Update” at the end to get the full story.

(Hat tip: Ashish’s Niti. Ashish’s objection is correct, and is answered by Andrew in the update.)

This reminds me of the statement Steven Landsburg makes in The Armchair Economist that: “If you never miss a flight, you’re spending too much time waiting around in airports.”

In this case, you don’t need another person waiting for you; all you need is some uncertainty about how long it will take to get to the plane. The idea here is simple: Missing the plane is costly, but waiting is also costly. You know approximately, but not exacltly, how long it will take you to get to your flight, and you leave with that amount of time, plus an extra amount of time to take into account the fact that missing the plane is costly. But that “extra amount” is limited by the fact that waiting around at the airport is also costly. So the goal is to leave “enough” extra time, but not “too much.”

One way we can test this theory in practice is to see if people allow more time when the cost of missing the flight is obviously higher (compared to other times). For example, the cost of missing the flight is not very much if there is likely to be another flight on the same airline to the same place leaving shortly, with seats available — and the cost of missing the flight is higher if those things are not true. So, we should expect people to leave for the airport earlier when travel is heavier and there is less likely to be an open seat on the next flight (e.g., holiday travel times), when flights are infrequent (international flights, flights to/from small airports) and so one. On the other hand, we should expect lots of people to cut it close when flying between destinations with very frequent service, such as Los Angeles to San Francisco or Phoenix, or New York to Washington, DC or Boston.

I’ll bet if we went out and got some data, we find that that’s true. In fact, we wouldn’t need data on when people leave for the airport; we’d just need data on what percentage of the passengers miss the flight and show up late to re-book for the next one. I bet people are doing that all the time for flights from Los Angeles to San Francisco, and only rarely for flights from Los Angeles to Hong Kong.

One Response to “The Economics of Being Late”

  1. Dave Schuler Says:

    Yeah, I linked to this one some time ago. Great, isn’t it? And now I have a good excuse.

Leave a Reply

Powered by WordPress