I will be flying to Southern California this week for the ASSA meetings, which got me thinking about red-eye flights. For those of you not in the US, red-eye flights are so named because they are overnight flights on which one typically has a hard time sleeping. It is very common for travelers flying from the West Coast to the East Coast of the United States to take red-eye — or overnight — flights, since those are typically cheaper, among other benefits.
So I have been thinking about red-eye flights. Or rather, I have been thinking about how grateful I am that my wife has decided not to book a red-eye flight on the way back from Southern California.
The existence of red-eye flights has always struck me as prima facie evidence in favor of time-inconsistent preferences, about which Wikipedia says the following:
In the context of behavioral economics, time inconsistency is related to how each different self of a decision-maker may have different preferences over current and future choices.
One common way in which selves may differ in their preferences is they may be modeled as all holding the view that now has especially high value compared to any future time. This is sometimes called the immediacy effect or temporal discounting. As a result the present self will care too much about herself and not enough about her future selves. The self control literature relies heavily on this type of time inconsistency, and it relates to a variety of topics including procrastination, addiction, efforts at weight loss, and saving for retirement.
I have booked too many red-eye flights in the past, and my thinking has always been: “I would be sleeping during that time anyway, so I might as well not miss out on anything important during the day and fly overnight; I’ll just sleep on the plane.”
Wrong. I have a hard time sleeping on a plane even when I am extremely tired, and every time I have taken a red-eye flight, I remember thinking: “What was I thinking when I booked this ticket?”
Here’s what I was thinking: My ticket-booking self was thinking: I’ll take the red-eye flight because there is little to no opportunity cost to spending the night on a plane, and it’s cheaper than flying during the day. But my red-eye-flying self inevitably ended up loathing my ticket-booking self for so severely discounting the costs of taking a red-eye flight relative to the monetary savings realized when booking the flights.