Air New Zealand is also adding a new product: a fully sized bed (the couches are only 4 feet long) that economy class can rent for parts of the flight. Interestingly it does stack beds. Maybe that's only a regulatory problem for US airlines.
The fact that it's a separate location from your seat and the periods are so short (4 hour naps!) both point to two factors here: proper space utilization on an airplane is incredibly important to the airlines, and economy flyers are very sensitive to prices so they'll pay X + 400 for a 4 hour nap rather than 2X to fly the whole way in a bed.
Also because so many of Air New Zealand's flights are long haul they can afford to use space on this; the product might well go unused on a simple domestic flight in the US that another airline flies. But even for ANZ an all-sleeper flight would be unlikely to sell out, and that would be a disaster after investing into a full refit of a plane.
It sounds as though skynest actually accomodates as many people as the seats in the same space would, by stacking them three high. The only problem is that they can't be used for takeoff and landing, so instead are rented for 4 hour periods by people who already have a seat. There should be a solution to that problem.
This is somewhat related to an article I wrote about epistemology. Economics is in that category with one foot in the hard sciences and one foot in the social sciences. The soft social sciences have a huge problem with this, going off theory and doing very little well does experiments. We need to use the real world experiments of different culture groups to see how things work out in real life. We are getting further and further in the wrong direction by being all theory and no real world consequences. https://open.substack.com/pub/moralgovernment/p/10-reasons-to-or-not-to-believe-things?r=12fk1m&utm_medium=ios&utm_campaign=post
Might the airline issue be a matter of not all flights being overnight? Airlines use the same planes for repeated trips at all potential hours of the day and night. So a dedicated sleeper with less passenger space would be wasteful during the day, and perhaps even a significant negative for passengers who don't want to be asleep.
I suppose it could for many trains, but trains are much longer routes and tend to require more night time movement even if the route started during the day. I doubt that your typical Acela Corridor route has a lot of sleeping quarters, though I haven't ridden one so maybe I'm wrong about that. Train space and fuel costs to move trains is also much different than planes. Adding another train car with beds is significantly cheaper up front and in cost-per-miles than the same on a plane.
Another way looking at it is that the second scientist is more likely to be overfitting.
Regarding the Austrians, you are of course correct, as illustrated recently by your debate with Block.
However, I have a lot of sympathy for them in this age of overfitters, when data is molded to fit any narrative, be it COVID lockdowns, absurdly high minimum wage laws, bank bailouts, etc.
"We" is not a homogeneous "we". Some believe theory 1, others theory 2. Theorist 1 has a certain "reputation" for making correct predictions. Reputation is not foolproof. There may be other reasons and motivations to trust theory 2 more.
If there were a "rational", holistic, inescapable decision-making mechanism, there would be no more believing and deciding. Such a mechanism is dead or frozen non-choice. Contingency opens up the possibility of choice. Prediction always requires belief. Because the future is unknowable, there can be different predictions or imaginations or versions of the future. Of course, prediction matters. It is essential part of every action. But people aim in different directions at different imagined or extrapolated futures. The future is subjective :).
The event had too much discussion of who wrote what where for my taste — I would rather argue about ideas. So it wasn't a question of who was or wasn't convinced. The first reading was my father's positive economics essay and I don't think any one was arguing that it was wrong, although some people may have thought it was. The Austrian readings were Kirzner and Hayek, neither of whom was present. I suppose the nearest to a disagreement was my arguing that Kirzner's emphasis on entrepreneurship didn't actually buy us anything, that we didn't know more about markets after reading it, and that some of the things he said about the subject were not true. So I learned a little about non-Rothbardian Austrian economics, but I still don't have a clear picture of what the substantive disagreement with Marshallian economics is. All I really got was emphasis on entrepreneurship and rejection of equilibrium as a useful concept, but the substitute seems to be "equilibrating," moving towards equilibrium but not getting there.
I'm a big fan of Kirzner Chapter 1 for how to think about equilibrating, but I agree. It's not clear what it buys us. Circulating back to the post, there are some predictions. You need to have the law of one price at any moment in time. But you also get that in search, even in the first chapter of Stigler's textbook.
If there were a monopoly airline that would make sense, but an airline that charged a somewhat lower price would shift customers from their competitors to them.
No. Competition tends to drive price down to cost, so the two gas stations having the same price isn't surprising. It doesn't follow that if one of them increased the price by a dollar the other one would do the same.
The airline puzzle is why one airline doesn't steal customers from all the others by introducing a somewhat lower quality product at a much lower price.
Some long-haul airlines do offer beds in economy class. Air New Zealand for instance:
https://www.businessinsider.com/flew-on-worlds-4th-longest-flight-in-revolutionary-skycouch-review-2022-10
Air New Zealand is also adding a new product: a fully sized bed (the couches are only 4 feet long) that economy class can rent for parts of the flight. Interestingly it does stack beds. Maybe that's only a regulatory problem for US airlines.
https://onemileatatime.com/news/air-new-zealand-skynest-economy-bunk-beds/
The fact that it's a separate location from your seat and the periods are so short (4 hour naps!) both point to two factors here: proper space utilization on an airplane is incredibly important to the airlines, and economy flyers are very sensitive to prices so they'll pay X + 400 for a 4 hour nap rather than 2X to fly the whole way in a bed.
Also because so many of Air New Zealand's flights are long haul they can afford to use space on this; the product might well go unused on a simple domestic flight in the US that another airline flies. But even for ANZ an all-sleeper flight would be unlikely to sell out, and that would be a disaster after investing into a full refit of a plane.
It sounds as though skynest actually accomodates as many people as the seats in the same space would, by stacking them three high. The only problem is that they can't be used for takeoff and landing, so instead are rented for 4 hour periods by people who already have a seat. There should be a solution to that problem.
This is somewhat related to an article I wrote about epistemology. Economics is in that category with one foot in the hard sciences and one foot in the social sciences. The soft social sciences have a huge problem with this, going off theory and doing very little well does experiments. We need to use the real world experiments of different culture groups to see how things work out in real life. We are getting further and further in the wrong direction by being all theory and no real world consequences. https://open.substack.com/pub/moralgovernment/p/10-reasons-to-or-not-to-believe-things?r=12fk1m&utm_medium=ios&utm_campaign=post
Might the airline issue be a matter of not all flights being overnight? Airlines use the same planes for repeated trips at all potential hours of the day and night. So a dedicated sleeper with less passenger space would be wasteful during the day, and perhaps even a significant negative for passengers who don't want to be asleep.
But doesn't the same argument apply for trains?
I suppose it could for many trains, but trains are much longer routes and tend to require more night time movement even if the route started during the day. I doubt that your typical Acela Corridor route has a lot of sleeping quarters, though I haven't ridden one so maybe I'm wrong about that. Train space and fuel costs to move trains is also much different than planes. Adding another train car with beds is significantly cheaper up front and in cost-per-miles than the same on a plane.
Another way looking at it is that the second scientist is more likely to be overfitting.
Regarding the Austrians, you are of course correct, as illustrated recently by your debate with Block.
However, I have a lot of sympathy for them in this age of overfitters, when data is molded to fit any narrative, be it COVID lockdowns, absurdly high minimum wage laws, bank bailouts, etc.
"We" is not a homogeneous "we". Some believe theory 1, others theory 2. Theorist 1 has a certain "reputation" for making correct predictions. Reputation is not foolproof. There may be other reasons and motivations to trust theory 2 more.
If there were a "rational", holistic, inescapable decision-making mechanism, there would be no more believing and deciding. Such a mechanism is dead or frozen non-choice. Contingency opens up the possibility of choice. Prediction always requires belief. Because the future is unknowable, there can be different predictions or imaginations or versions of the future. Of course, prediction matters. It is essential part of every action. But people aim in different directions at different imagined or extrapolated futures. The future is subjective :).
By chance, I found a Youtube video about an overnight bus in Japan that provides sleeping quarters. Apparently, fits 11 people to a bus.
https://www.youtube.com/watch?v=E1sxGSiAG70
Were any of the Austrians at the event convinced?
The event had too much discussion of who wrote what where for my taste — I would rather argue about ideas. So it wasn't a question of who was or wasn't convinced. The first reading was my father's positive economics essay and I don't think any one was arguing that it was wrong, although some people may have thought it was. The Austrian readings were Kirzner and Hayek, neither of whom was present. I suppose the nearest to a disagreement was my arguing that Kirzner's emphasis on entrepreneurship didn't actually buy us anything, that we didn't know more about markets after reading it, and that some of the things he said about the subject were not true. So I learned a little about non-Rothbardian Austrian economics, but I still don't have a clear picture of what the substantive disagreement with Marshallian economics is. All I really got was emphasis on entrepreneurship and rejection of equilibrium as a useful concept, but the substitute seems to be "equilibrating," moving towards equilibrium but not getting there.
I'm a big fan of Kirzner Chapter 1 for how to think about equilibrating, but I agree. It's not clear what it buys us. Circulating back to the post, there are some predictions. You need to have the law of one price at any moment in time. But you also get that in search, even in the first chapter of Stigler's textbook.
Why do they not add cheap sleepers? Probably because
„Business class cost about eight times as much as economy, first class something like twice that.“
And presumably these sell, and sell well, or they would increase the size of economy.
If there were a monopoly airline that would make sense, but an airline that charged a somewhat lower price would shift customers from their competitors to them.
Doesn't this argument apply to the two gas stations across the street from each other which have the same prices?
No. Competition tends to drive price down to cost, so the two gas stations having the same price isn't surprising. It doesn't follow that if one of them increased the price by a dollar the other one would do the same.
The airline puzzle is why one airline doesn't steal customers from all the others by introducing a somewhat lower quality product at a much lower price.