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August 30, 2004

Parking: The Utopian Fallacy

The other day I drove to the B-School, intending to go quickly to my office and back. I have a choice between the Near Parking Lot, which is usually full, and the Far One, which is not. On this occasion, I felt a strong pull to try the Near Parking Lot because I was only going in for 10 minutes. Why? I knew that it was irrational. If I save 5 minutes by going to the Near Parking Lot, I save 5 minutes regardless of how long I stay in the building.

I think my urge was what might be called the Utopian Fallacy . In Utopia, people would only park in the Near Lot if they are going to stay in the building a short time. For every one person who is going to stay in the building for 8 hours (480 minutes), about 48 people who stay in for 10 minutes could park. The 8-hour person would save 5 minutes; the 48 10-minute people would save 48x5= 240 minutes. So it is massively inefficient not to have a short-time-limit parking spot close by. And if everyone would voluntarily park in the lot only if they were going to be there no more than 10 minutes, we would be better off.

That, however, is not the case. My premise was that most people are *not* following this policy, and so the Near Lot is probably full.

Note that if I were planning to stay for 8 hours, and I decided to go to the Far Lot, even though I thought I had a good chance of finding the last spot in the Near Lot, that would not be irrational-- just altruistic. I would be freeing up a spot for either another 8-hour parker (in which case society is no worse off) or for 48 10-minuters (in which case I have benefitted society a lot, not an irrational thing to do if I am so inclined). But that is quite different from being a 10-minuter and going to the Near Lot just because it *ought* to have a space.

Posted by erasmuse at August 30, 2004 12:43 PM

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The real answer, of course, is to charge more for the nearby lot until the average parking time is 10 minutes.

Posted by: Nick Ronalds at September 3, 2004 04:14 PM

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