This is the Cato Daily Podcast for Wednesday, February 28th, 2024.

I'm Caleb Brown.

You've come to expect airline ticket prices to vary.

You've come to expect the price of a lift ride to vary.

But what about the price of your baconator? On an

earnings call Wendy's discussed leaning into more dynamic pricing on their

menu. Those are comments the company quickly appeared to walk back. Cato's Ryan Bourne says

dynamic pricing should be viewed as nothing more than an experiment, and consumers will

be the final judge. Ryan, I think we may have talked about surge pricing before at least within the

context of Uber and Lyft and ride sharing services but this is not an uncommon thing. Prices are dynamic. They change based on market

conditions. So when I read that Wendy's was toying with the notion of changing prices on what could have been a per minute

basis. I was a little intrigued. What were your initial thoughts of that notion of something like a fast food restaurant engaging in this type of pricing?

Well, dynamic pricing of course is, you know, where the price of a good or service fluctuates in real time based on supply and demand.

And it's really, as we've rolled out these new algorithmic technologies,

this has become an option that wasn't available to companies before which they're able to

now harness.

And it's exactly the same principle for why you pay more for a flight home

Christmas time or holiday time than you do in other periods of the year where there's less demand.

This is becoming increasingly common across a range of industries.

Yes, it's obviously deeply embedded in ride share, Uber and Lyft. That's a sector where you're

trying to quillibrate the demand and supply for rides at any given time.

But as these technologies have become more advanced, it's increasingly been used across a wide

...