International arbitrage of the day

So, a choo cho day return from Freiberg to Usti nad Labem costs €59.

A choo choo day return from Usti nad Labem to Freiberg costs €25.

There must be some manner to run a Ponzi scheme on such a price difference.

Perhaps I should post myself or the tickets from one to the other?

17 thoughts on “International arbitrage of the day”

  1. This was going on in the 80s between London and Liverpool, to name but one. It’s easier now, because you buy in advance and collect the tickets from anywhere.

    Also today, Southern’s Day Rovers vary depending on where you say you start from. Spot the trick? “Rover”.

    Amazing.

  2. So Much For Subtlety

    I was booking a hotel the other day and I noticed it was more expensive on Firefox than on Microsoft Explorer. The margin wasn’t so great that it would be worth selling bookings to Firefox users, but it was interesting to say the least.

  3. @So Much …

    I’d be surprised if it were browser-dependent, though it’s not impossible. Recently, however, people have noticed that some sites keep track of previous searches and quote different prices. (I think the examples I saw were hotels and airlines.) Usually they store that state in the browser. Next time, try clearing the browser’s cache (usually through Preferences or Settings) and searching using the browsers in the opposite order. In the example I saw, the prices were pushed up, but some sites might randomly try offering a small discount to see if they get a bite.

  4. Of course, the original scheme run by Mr Ponzi was based on the differences in price for international postage. His idea was sound enough, but the volume of funds he received overwhelmed his adminstrative capacity. So he turned to fraud instead.

  5. I’ve noticed significant price differences between Expedia.com and Expedia.co.uk. As usual, people see Brits trying to buy something and think kerr-ching!

  6. Interesting about expedia.com and expedia.co.uk, as I’ve been using the latter and thought it seemed a little expensive. It didn’t occur to me to check the dot com.

    Recently, however, people have noticed that some sites keep track of previous searches and quote different prices. (I think the examples I saw were hotels and airlines.)

    Two friends tell me Virgin Atlantic does this. For whatever reason, the prices are more expensive the next time you look, unless you have cleared your cache (or browse in incognito mode).

  7. I remind myself of Tim’s support for the London congestion charge and of road tolls. These, as far as I can see, have their main justification in different costs for different journeys (or duration/convenience of journeys), according to the time of travel; this is through different amounts of competition at different times, for a limited resource.

    Surely the same argument can be used in support of differential train journey pricing, with higher prices attaching to the times when most people want to travel (as part of a free-market economy), and also arising from there being occasional spare capacity for which any income is (at the margin) mostly profit. And, of course, the trains somehow have to make the journey both ways: full, empty or in between.

    [Aside. There is also the difficulty in setting up a system of ticket transfers, such that there is benefit to people at the time that they want to make their journeys. There are then the ticket conditions, which probably make fraudulent the use of each ticket by more than one passenger.]

    Best regards

  8. I used to regularly travel between Manchester and Aberdeen (plane) and Manchester and Southampton (train) on weekly trips.

    It was cheaper for me to travel once in one direction (to Ab or South) and then get the regular returns from the other end, rather than always getting a return from Manchester to where ever. Just had to know when the end of the contract was at least a week in advance and only buy a single for that last trip.

  9. Many airlines used to require a Saturday night stay in order to get cheap fares. (Some still do, but the practice used to be almost ubiquitous). The idea was that business travellers would want to be home on the weekend, and leisure travellers would not. However, with business travellers who flew the same route regularly, this was easy to get around by buying two tickets with opposite starting points with one within the other. (For instance, fist ticket goes from A to B on Tuesday in the first week and B to A on Thursday in the second week. Second ticket goes from B to A on Thursday of the first week and A to B on Tuesday of the second week. Traveller uses both outward legs in the first week, and both return legs in the second week, flying A to B on Tuesday and B to A on Thursday both weeks).

    Another slightly weird situation comes from the fact that nonstop flights are more expensive than flights with a stopover, but flights with a stopover usually incorporate a nonstop return in the middle.

    For instance, British Airways charges a lot less for Lisbon to New York return via London (ie Lisbon-London-New York-London-Lisbon) than it does for straight London-New York return. In order to prevent people ignoring the Lisbon-London legs and just flying London-New York return, the entire fare becomes void if you fail to fly the first leg. (The general rule of “Fail to fly a leg and the rest of the ticket becomes valid” applies with most return fares, to prevent this and various other similar tricks).

    This hasn’t stopped a little cottage industry of people who fly the “Lisbon Loop”. People fly to Lisbon on Easyjet, and then fly Lisbon-London-New York-London, before finally discarding the final London-Lisbon leg. It only really works if you have time to spend a few days in Lisbon (and want to) before going to the US.

  10. I was booking a hotel the other day and I noticed it was more expensive on Firefox than on Microsoft Explorer. The margin wasn’t so great that it would be worth selling bookings to Firefox users, but it was interesting to say the least.

    There’s an article about this in the week’s Ecqonomist.

  11. If the tickets have point of sale identification and marked “outward” and “return” then the arbitration is maybe not possible, if it is not allowed. But it maybe it is allowed. If you are traveling towards the point of sale with an “outward” ticket to show the ticket inspector. In summary there is nothing to exploit if they are different products, due to having different start points.

  12. Simon F

    Yes, they claimed that you PC/Window users are ‘cheapskates’ compared to us Mac users and the webs detect this. (and we get screwed so Windows users get the last laugh here, ……for the first time!)

  13. Yes – I had this experience with Malaysian Airlines last week attempting to book a single from Penang to London.

    Initially this was priced at 1,880 MYR (about £382), however I decided to check Singapore Airlines and Etihad to see if they were cheaper – they weren’t.

    When I attempted to book the Malaysian Airlines flight at 1,880 MYR all of a sudden I was advised that the price had changed (a little message told me so) and it was now 4,650 MYR or £944.

    Tried the rebooking several times and no joy. Cleared the Google browser cache, still no joy.
    Changed the flight date, still no joy.

    Then I changed the flight departure airport from Penang to Kuala Lumpur and we were back to reasonable prices.

    I changed the departure airport back to Penang and all of a sudden back to 1,880 MYR or £382, this time I successfully booked the flight.

    So, the Malaysian Airlines site was obviously set-up to jack up the price, but only for a certain period or number of booking enquiries.

    I had not logged in or entered any frequent flyer details, so the only way it could know it was me was by the IP address, cookies or cache.

    Know what to do next time though…

  14. When I was working in London during the week and going back to Leeds at the weekend, it was far cheaper to buy a weekend return London to Leeds than a Monday-Friday return Leeds to London. About half the price, if I remember rightly.

  15. I’m surprised that anyone’s surprised by these pricing discrepancies. It’s in the nature of the beast for any any industry offering goods which have a predetermined expiry date – hotel rooms, flights, train journeys, concerts, etc. An airline ticket has no value after the plane has taken off. So discounting is the norm in these industries, with the important proviso that it must be disguised in order to preserve the authenticity of the “official” price.

    Frankly, anyone who pays the advertised rate for a flight or a hotel room is either an idiot or travelling on expenses. Next time any of you are on a plane, just ask the person next to you what they paid for their ticket. I guarantee that it won’t be the same.

    But you have to know how to do it. For example, the best time to buy a hotel room is generally on the day, while the cheapest prices for scheduled flights are usually available around ten days in advance. (I could explain why, but I don’t want to get too longwinded.)

    Oh, and never, ever, use Expedia.

  16. Oh, and never, ever, use Expedia.

    I was just using it to get ‘indicative’ prices to save me visiting individual hotel websites. Honest.

  17. For example, the best time to buy a hotel room is generally on the day…

    That depends. If the hotel is filling up close to the day, you’ll pay through the nose.

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