Vacation - Continued (Final) - Visit With Zo

First, Congratulations and shout out to Zo and Beth on the birth of Jake Lorenzo. Reports are that Jake and Beth are both doing well and that Mike is a little excited, although it would probably be difficult to detect. After finishing our tour of the Hearst Castle, Rachel and I set off towards San Diego. The difficulty in this journey is that there is no good way around Los Angeles. However, we lucked out and made it through LA in about an hour and a half. The highlight of our trip was dinner on our final night with Mike Lorenzo, the proud father mentioned above, and his wife Beth. This was the first time that Rachel and I had the opportunity to meet Beth. She is very nice and has no difficulty keeping Mike in his place. We ate at a great sushi restaurant and then went for ice cream at the beach. For those of you who know Rachel and I very well, you know that we are big zoo-goers. We could not pass up the opportunity to visit the San Diego Zoo while we were in town, so on Wednesday, we visited the U.S.'s most famous zoo. It was really cool, as the habitats were extremely well designed. As you probably know, the pandas are probably the most famous animals at this zoo. We can now say that we have seen them. They really didn't do much. Very lethargic animals. I affectionately named the one in this picture "Larry Wray". I welcome blog-readers to hypothesize why.


My favorite exhibits are always the apes (note that this includes lowland gorillas, orangutans and chimpanzees). I have included a video clip (I used Quicktime) of the baby orangutan playing with his father at the San Diego Zoo. Several families with small children abruptly left this exhibit, as two in the clan decided to get intimate. Rachel would allow no video footage of this spectacle.

My favorite of the apes is always the Eastern Lowland Gorillas, or "Silverbacks". They are large and in charge. The alpha-male pictured here was no different. This day was especially good for me, as they actually ran at one point. I had never seen one of them run. I gained a whole new level of respect for them, as they are not only huge, but really fast, much like Tim Tebow (I am watching him shred USC as I write this).

REFLECTION - Airline Price Discrimination
I learned in MBA school that an excellent way to make money is to segment your customers and then price discriminate amongst those segments, charging different prices to memebers of each segment. The airline industry has mastered this technique (I assure you that it is a valid tool and that airline earnings would be even worse without it).

Why do I write this, you ask. I can now say that I was a target of this price discrimination. I conducted a clinical experiment by buying 2 airline tickets from the same airline to different destinations from the same origination with both purchases made exactly 2 weeks in advance of the flight.

Flight #1: I fly from Philadelphia to Phoenix, AZ. I lay-over for the weekend in Phoenix and then fly to Orange County, CA on Sunday afternoon. I then fly back to Philadelphia on a red-eye flight Tuesday evening, arriving in Philadelphia on Wednesday morning. This flight logs over 5,000 miles and costs approximately $400.

Flight #2: I fly from Philadelphia to Knoxville, TN. I lay over for the weekend and then fly back to Philadelphia on Sunday afternoon. This flight logs 1,200 miles and costs about $200 more than Flight #1.

How can this be, you (and I) ask?

1) Knoxville is obviously a more attractive destination than either Phoenix, AZ or Orange County, CA, especially during football season.

2) Phoenix is not nearly as attractive destination as it once was, as most women have heard by now that Jeremy Graves is in fact married and thus is no longer available. The OC has suffered since the cancellation of its critically acclaimed series.

3) Competition - This may be the most plausible reason. Multiple airlines with multiple time slots fly from Philadelphia to both Phoenix and the OC. Prices are driven down further, as Southwest is one of those carriers. You want to fly to Knoxville, you have less options, which means a higher price.

4) Economies of Scale - More people fly to Phoenix and the OC from Philadelphia than to Knoxville. This is likely because they have not heard what a paradise that Knoxville truly is. 300-person flights allow larger planes to be used, achieving economies of scale vs. 50-person flights, which use smaller planes. In competitive markets, prices are driven towards variable cost. Each additional passenger on either flight adds very little variable cost (just the incremental fuel to fly that person's weight and baggage). These total variable costs are more effectively distributed across a larger passenger pool, achieving economies of scale on the larger flights to Phoenix and the OC.

Whatever the reason, it stinks that I have to pay $200 more to go see my parents than to travel coast-to-coast.