Paying for position

The New York Times reports on Universal Studios Hollywood:

It has introduced a $299 V.I.P. ticket, just in time for the summer high season, that comes with valet parking, breakfast in a luxury lounge, special access to Universal’s back lot, unlimited line-skipping and a fancy lunch.

V.I.P. visitors also receive “amenity kits,” which include mints, a poncho to wear on the “Jurassic Park” water ride and bottles of hand sanitizer.

Disney still serves up its roller coasters the old-fashioned way — one rank for everyone, white collar next to blue — but Universal says it had experienced rising demand for special access and price distinctions.

“Consumers want what they want,” said Xiomara Wiley, senior vice president for marketing and sales at Universal Studios Hollywood, which charges $80 for a no-frills ticket and $149 for one that allows for limited line-skipping.

I will speculate that those who buy the no-frills ticket don’t mind at all that for $299 visitors can get valet parking, a fancy lunch, mints and a poncho. But “unlimited line-skipping”? Children learn at a very young age about social norms governing cutting-in, and so the ability to purchase the right to do so will immediately strike many people as wrong, just as stories of those who cut-in through hiring handicapped individuals to serve as proxy family members, or of those who simply pretend to be handicapped themselves, are considered not just wrong but actually newsworthy wrong. So why is paying extra for a poncho and hand sanitizer all right?

If I could generalize, I think there is a distinction to be made between buying ordinary goods for consumption and buying goods that are positional – goods that can only be had at the expense of someone else. I don’t feel an intuitive sense of being wronged when someone has the spending power and the desire to buy $50 bottles of olive oil, $5,000 suits, $100,000 cars. None of those purchases affect me. But if someone uses their spending power to gain position at my expense, then I object. This is at the root of complaints about the role of money in campaign financing: funds are spent by individuals and corporations wishing to advance their political agenda at the expense of other political claims. It is why we think there is something wrong with an industry that serves to collect millions of dollars preparing students to do well on their SATs: such efforts are purely designed for parents who want their children to have a better position, necessarily at the expense of others, for a chance at the limited spaces available at elite colleges. Fighting for position in these cases is worse than a zero-sum game, it’s actually a negative-sum game as resources are expended not for any increase in valuable goods, but simply to re-arrange who is at the front of the queue, either in politics or higher education. (An analysis of what happens when an economy is increasingly driven by positional goods is found in Fred Hirsch, Social Limits to Growth).

In the long run it will be interesting to see whether the sale of VIP passes tends to lower the demand for ordinary passes. We expect it would – the experience of going to this amusement park on a no-frills ticket is now worse than it used to be.