All economists agree that more flexible dynamic pricing for electricity, water and road access would make society better off. Up to this point, the median voter and the median consumer have not embraced dynamic pricing. Voters tend to oppose road pricing (as even Mike Bloomberg learned in rich, sophisticated NYC) and consumers choose not to opt into time of day electricity pricing. One explanation for these facts is that we face a cost of action and prefer not to be continuously optimizing facing changing relative prices (for some evidence see
Frank Wolak's paper). Another explanation is that income inequality means that we have a fairly large share of poor households who prefer to pay with their time rather than facing spiked high prices (see
Jan Brueckner's paper). A third explanation is that we are creatures who need experience with something new before we appreciate its benefits.
Enter Uber. Uber just emailed me that on New Years that its loyal customers will face dynamic pricing. Here is the graph I was sent.
While Ubers riders are not a random sample of adults, this experience with dynamic pricing serves society as we become more accustomed to a "violation of the law of 1 price".