Why you can’t get a cab in the rain

cab rainWhy is it so hard to get a cab in New York City when it’s raining?

Because everyone wants a cab then, right? Hold on, it’s not that simple.

It actually is related to supply and demand, but probably not what you think.

Camerer, Babcock, Loewenstein, & Thaler put this to a study in 1997. Surprisingly, they found fewer cabs on the roads on rainy days even though more people were looking for rides.

When they dug deeper, they found out that the drivers actually rented out their cabs for 12 hour shifts. They also found out that most of the drivers set a goal to make twice the amount of the 12 hour rental cost.

On these rainy days, as more people took cab rides, the drivers reached their daily goals faster. They found that once the drivers reached their goals, they actually returned their cabs and went home!

The economic tenet of wage elasticity (and common sense) says that people should work more hours on days when they can earn more money and less on days when they earn less. But the drivers, with the opportunity to make more money and improve the lives of soaked New Yorkers, instead decided to call it a day.

What about you? Do you have a limit set subconsciously that you can’t go beyond? Limits in your paycheck? Limits to your happiness? To your health? Why not identify when you’re hitting a wall and see if it might be self inflicted? Sometimes just recognizing and acknowledging it can get you on the path to self correction.

To your best,

Jeremy

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