Sunday, July 15, 2007

Ladies' Night

Ilya Somin, in two posts, criticizes a class action lawsuit against private night clubs that have ladies’ nights, during which they offer lower drink prices to women. The second post, in the course of explaining why the case shouldn’t be certified for a class-action lawsuit, gets to the economics of the matter:
[M]any of the members of the class in question ("men charged more money or burdened by stricter time restraints than women" at the night clubs in question) actually benefit from these practices. At the risk of belaboring the obvious, a key purpose of ladies nights at night clubs is to benefit (heterosexual) men. Many night clubs and bars become relatively unnappealing [sic] to men because the male-female ratio is too high, reducing male patrons' chances of picking up a date. By attracting more women, ladies' nights improve the dating odds for male patrons. [emphasis added]
The blogosphere has visited this territory before. Alex Tabarrok explained the model of inter-customer externalities in a 2005 post and applied the conclusions directly to ladies’ nights. More recently, I applied the model to sex parties. However, on re-reading Alex’s post, I was struck by the following passage:
If men have a higher demand for going to a bar with many women ... than women have of going to a bar with many men ... then in a competitive market the bar must set a higher price for men than for women.
Hm. Problem is, while ladies’ nights certainly exist, they are not the norm. They typically occur only one or two nights a week, usually weeknights. One explanation is that men’s and women’s demands for bars don't actually differ that much. Another explanation is that the nightclub scene is not competitive. Based on personal observation, I find both explanations highly implausible. So what gives? Why isn’t every night ladies’ night?

The natural answer is that the male-to-female subsidy happens spontaneously, through the mechanism of men buying women drinks. This norm has the added advantage of making sure the subsidy doesn’t go to all women, but only those who are actually interacting with men at the bar. And the subsidizers aren’t all men, but only those who have the greatest interest in meeting women.

If I’m right, then the problem is turned on its head. The question isn’t why some nights aren’t ladies’ night, but why any nights are. Apparently the spontaneous subsidy must be insufficient on some nights; but why? I’m just guessing here, but I suspect it has something to do with the ladies’ intentions in coming to the bar. If they come to the bar for the opportunity to meet men (but not too many men, as that can be threatening and creepy), then the spontaneous subsidy works well enough. But if women come to the bar primarily for other reasons – e.g., to chat with girlfriends after work – then the spontaneous subsidy is less attractive because a woman must chat with a man to get it. The bar-sponsored subsidy, on the other hand, can attract women even if they are not primarily interested in meeting men. Of course, this explanation implies that the men’s dating odds are lower than they seem. But the men may tolerate this for two reasons – first, because even uninterested women can be pleasant to look at, and second, because men still stand a better chance than if there weren’t as many women present. At least some of the women who come for other reasons may nevertheless be interested if the right (or right enough) guy makes a pass.


Ran said...

There might be a kind of price differentiation going on; women who are more willing to interact with interested men might be willing to pay more per drink on a night with fewer other women, so they have better pickings, so to speak. (Of course, this isn't really price differentiation in the traditional sense, because part of the reason they're willing to pay more is that they're not actually expecting to have to pay the full price; but, same general idea.

Anonymous said...

Those who visit on Ladies Night because it is cheap might decide to revisit on another night.

Jenny said...

Are men more likely to buy women drinks when there’s a bar-sponsored subsidy? That is, are they taking advantage of the fact that what they usually “buy” is offered at a cheaper price?

Anonymous said...

Here is a blog that talks about ladies night drink prices. Come on guys. You want more women? You gotta pay!