Temporary Inflation Fees and Greedflation

Source: Bet On It
by Bryan Caplan

“A couple weekends ago at the Original Pancake House, I encountered yet another strange form of inflation: the ‘Temporary Inflation Fee.’ When you ask for a table, the concierge stand displays a list of seven rules. If you read to the end, you discover Rule #7, which proclaims the adoption of an unquantified Temporary Inflation Fee. When the check arrives, they start with the menu prices, then tack on another 3.6%. … Economists have lots of models with ‘menu costs,’ and one obvious objection is ‘How high can menu costs be? You don’t actually have to print a new menu. If unexpected inflation hits, just announce a surcharge.’ The TIF is the obvious objection come to life.” (09/06/23)