Folk economics: a Vermont locksmith

Shortly after Debbie and I were married we moved from Dallas to the Boston area and spent a couple of years there. One of the novelties for us, of course, was snow that stuck around for the entire winter. Debbie had already done some downhill skiing, and enjoyed it. Downhill skiing held no attraction for me (my one attempt at it will make for an entertaining story in some other context) but I was willing to give cross-country skiing a try. So one Sunday we drove with our friend Dan up to a small ski resort in Vermont to try it out.

The skiing was fine, at least the totally flat part. But I soon discovered that even cross-country skiing involves some downhill sliding, and even at gentle speeds that would make a downhill skier laugh it was more than I could handle. For me that day there was a lot of falling down and getting up.

After a few hours of that we were ready to head back home, so we turned in our rented equipment and headed out to the car. Unfortunately, my keys had fallen out of my coat pocket during one of my tumbles, and Debbie’s keys were in her purse, safely locked inside the car. After puzzling awhile over what to do next, Debbie went with Dan back to the resort hotel (a fair distance away, as I recall) to call around for a locksmith, while I waited at the car.

After awhile a nondescript pickup truck pulled into the parking lot and began slowly driving down the aisle; the driver saw me, drove over, and put his head out the window to ask if I was the fellow who needed his car unlocked. When I said I was, he got out of his truck, reached back in to grab a long, thin strip of metal, walked over to my car, slipped the metal strip down inside the door, probed for a second, then pulled up—and the door was now unlocked.

Relieved, I asked him a bit nervously how much I owed him. Twenty dollars, he said. I was shocked. Granted, this was 1986, and twenty dollars then was more like fifty dollars now. But I would not have been surprised if he had charged me twice or even three times as much, and I would have paid it; not as gladly as I paid the twenty dollars, but still without regret. After all, it was a cold Sunday afternoon, I was in a strange town far from home, I needed to get home, I didn’t know the going rate for popping a door lock either there in Vermont or at home in Boston—I was not in a good position to be soliciting the recommended three quotes for the job.

And I’m sure the locksmith knew this as well. How many times had he been called away from a warm home on a frigid Sunday afternoon to pop a car lock for some Boston yuppie who had foolishly locked the keys in the car, a resort town visitor who was unlikely to ever see him again, much less use his services a second time, a visitor who probably wouldn’t even offer a word of thanks along with his payment? Surely he knew that such visitors were unlikely to argue about being overcharged, or that their objections could be easily ignored.

Still, he charged twenty dollars. He probably considered that a fair price for an hour away from home and ten seconds of cold but easy labor on a Sunday afternoon. And I agreed with him; in fact, if the me of today had been standing in that parking lot I would have not only thanked him profusely (as I did) but also paid him an extra ten dollars for his trouble. But according to classical price theory, that would have made both of us very foolish.

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2 thoughts on “Folk economics: a Vermont locksmith

  1. there are many things in modern economic theory that work different in the real world, rather than a classroom setting. I often think economists often live in the “Land of the Lotus Eaters”, a place above and beyond the complicated lives and motives of real Humans. human beings are simply too complex for any theory to explain everything humans do. Humans simply break too many of the rules, like you paying an extra $10, to fit some obtuse economic rule.

  2. I am not sure the story as you tell it breaks the rule, except insofar as not all participants in the market have perfect information (you didn’t know what the going price was for the service). You were stuck and he was the only provider. You could have potentially avoided this interaction by asking on the phone what it was going to cost in advance (I usually have to do this because these people nowadays only take cash and I need to make sure I have it). What would have happened if you had said, “I’ll give you $10?” He had already performed the service, and was already out of his warm house.

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