TWO SYSTEMS OF BELIEF. At Fraudfiles, an unwillingness to allow Milwaukee area commuter train riders to ride at the expense of others.

An awful lot of taxpayer money is potentially going to be spent on a rail line that may not even be needed.

Passenger Rail, on the other hand, is not happy with Amtrak using peak load pricing.

But should Amtrak (or whatever form national Passenger Rail takes in the future)build enough new equipment to meet peak demands?

We say yes! Why? Because holidays and vacations are the make and break for any travel-related business in the US. Any business will get more repeat business and off-peak business if it can handle the peaks with style and class.

What the post illustrates is precisely the importance of understanding economics.

Stop playing games with numbers on tickets that should be flat rated. Get some balls and start serving the train-riding public like a real railroad! You may be surprised on how much new money you can make.

Those flat-rate tickets did so well for the real railroads that they paid (yes, paid, check your history) the government to take the passenger service off their hands. (Reading, Southern, and Rio Grande figured they'd lose less money by not joining up.)

The way to make money is to price over peak and off peak in such a way that revenues match incremental costs. Oliver Williamson solved the problem in 1966 (JSTOR). Telephone companies began using the method in the late 1970s, and deregulated airlines applied it extensively.