“No one goes there, it’s too crowded”- Yogi Berra
“No one goes there, it’s too crowded”- Yogi Berra
Network effects and Restaurants
http://girlingamba.com/shake-shack-worth-it-review/
This is a famous quote by the late Yogi Berra, a professional baseball player known for his witty sayings. The quote itself is a contradiction, if no goes there than it wouldn’t be crowded, but it is. However, this quote jumped into my mind during homework 7 when we investigated network effects and reservation prices. There was on such example where the reservation price of some product being sold was a function of the number of people who used it. This created a scenario where across part of the domain the more people using the product would increase the reservation price for everyone thus allowing more and more people to be able to buy the product. However, at some point the function caused an equilibrium where any new addition of people would decrease the reservation price causing those less to want to buy the product.
Using the concepts from that homework and the quote above, I’ll investigate a phenomenon I noticed with the opening of a Shake Shack restaurant near my town. The link at the top is a source from someone else who investigated the crowds at the same restaurant and determined that the crowd wasn’t worth it. When the restaurant first opened there was a lot of hype surrounding it, this effectively increased the reservation price of people. People are willing to give up a lot more to go to the restaurant than normal. This created the great crowds at shake shack for the first few weeks, as normally people wouldn’t be willing to wait in such a long line, but the novelty of the new restaurant made it worth it to them. This ties into the idea of reservation price. The idea of “No one goes there, it’s too crowded” also plays into the idea of reservation price. It comes down to a matter of perspective. For example, because the restaurant is so crowded, some people with a lower reservation price are not going to go. From the perspective of a cluster of those with lower reservation price, none of them are going to want to go to the restaurant. And thus it comes down to consider who is “someone”, and from certain perspectives based on reservation price those who are “someone” aren’t going to the restaurant and by their logic, that means no one is.