Economic Decision Making

Yesterday, Thursday Feb 12

I was at SFO waiting for my NWA afternoon flight to Honolulu.  The flight was overbooked, so they offered $300 credit for bumping to the next day.

I told the counter that I would do it for $500 (in my mind to a rough approximation, that would have clearly been worth it) but they said they couldn't go that high.  So I declined the $300 and took the flight.  Now I am here in Kona, Friday Feb 13, and I think I made the wrong decision (not a horrible decision mind you, just the slightly less optimal one). 

I have in the past had the Phineas Gage problem where I am paralyzed by small decisions, and even today, I still spend too much time on $5 decisions.  This was a decision in the low hundreds of dollars, however, so I think I should have sat down and thought out all the factors, at least for ten minutes.  It was taking a while to load the flight, so I had time.

Here are the facts:

The offer:

$300 NWA credit

Hotel and meals for the night in SFO

Standby for first-class

Considerations:

$300 credit is not cash.  I would value it at $150, since it might not get used.

I didn't need to be in Kona by Thursday night.  I have really nothing going on today, Fri.  But I had packed and was at the airport, so I was emotionally ready to go.  In fact, if you had told me on Wed that I could delay going to Kona by a day for $0, I probably would have said yes.

I night in SFO staying at a decent at hotel and getting a workout in would not have been unwelcome.

I am not earning any money now, so my time is worth very little, though I do have plenty of savings.  If for some reason I am not working two years from now, I'm sure I would be all over a $3oo offer (my marginal time would be worth the same, about $0, I would just be feeling a lot poorer by then).

I could theoretically save $110 by pushing back my condo in Kona a night (I would say $50% I could do this).

The NWA flight was leaving an hour late.  Thus I was probably going to miss my connection to Kona, and likely to have to pay $30 in Honolulu to change it, since I booked it on Hawaiian, not NWA.

This is the key question I did not ask NWA.  If I bump to Fri, can you book me all the way to Kona?  This would have saved me the change fee described above, plus about another $30 in baggage fees (I don't pay baggage fees on NWA because I have elite status).  If I had sat and meditated for 10 minutes this might have occured out at me.

Turns out, when I got to HNL, I had to pay $100, not $30 to change and upgrade to first-class since coach was sold out.  The real "disaster" would have been if I had to spend the night in HNL.

Another thing going on at this time was that I was having an email conversation with Mandy.  She and Kirk had not been able to rent a car in Kona for the class, this was a little problematic for them.  I told them that Annabel told me about a  local place that has cars on a first-come, first-served basis that closes 4:30 Fri (after they get in).  She called and they said they might have a pickup truck for rent.  I offered to pick it up for them and pick them up at the airport.  She said that would be great, but if not, no big deal, they would try on Sat.  So I felt a little invested in doing this for them, but certainly not obligated.

To run the numbers again

$300 credit on NWA (value it as $150 cash)

50% probability of saving $110 at the condo

50% probability of saving $50-$100 going to Kona by having NWA book me straight through

So, not a huge value.  On the other hand, I think I mis-assessed the value of being in Kona on time, instead of a day late.  The value of that really was about zero, but emotionally I was invested to go, I had packed up and taken the BART to SFO.

Thoughts?  Should I try to make a better decision about the same circumstance in the future?  Or is this not even worth thinking about?  Clearly I am thinking about it now, so I guess I do wish I had thought about it yesterday.

Most people would not take the $300 because their schedules are far less fluid than mine.  This is an example of how many more options I have with my time than most people because of lack of regular job and wife and kids.  Ultimately, they did get the required two people to accept the $300 to skip the flight, but it took a while.

I realize this has nothing to do with food.  Yes, I know this shows how scatter-brained I am.  I think may be it is my destiny to be forever unfocused, but at least I make it work somewhat well (earn a six-figure living in most years).