Rory Sutherland

re: airbnb discourse in college I worked as a server at an upscale steakhouse. we had a few different steak sauces that were made from scratch daily. they were expensive to make, and less than half of the customers that ordered steak wanted sauce, so the restaurant charged $3 for it we got complaints constantly. just at my own tables, half a dozen times a week I'd get complaints about being "nickel and dimed" for $3 of sauce on a $70 steak. a few times a month someone would mention it in an angry online review, or ask to speak to a manager and demand that it be removed from the bill because "who the hell charges for condiments?" after several years of this, finally management had enough. they raised the price of every steak by $3, and now complimentary sauce was included with each steak on request. want to hazard a guess about how many customers complained about the $3 price increase on steak? essentially zero. it was great, from the restaurants perspective! no more complaints, and instead of making $3 on 40% of steak orderers, they made $3 on all of them. and the customers were much happier, despite this deal being absolutely, unequivocally worse for them. consumers are not rational agents from microeconomics textbooks. very often the *feeling* of what they're being charged for matters way more than the absolute value of what they're being charged. I think that's more or less what happening with airbnb. people don't want to be charged a cleaning fee and then also told they have to clean, even if in the counterfactual world the additional cleaning fee is more than they'd be willing to pay someone to do the required cleaning. a $100 cleaning fee *feels* better than a $50 cleaning fee + "load the dishwasher and take the trash out to the dumpster", even though most people would not pay $50 to not have to do that.