Welcome to The STEM Sessions Podcast. I am your host, Jarl Cody.
Gotta say, this episode became something more than I intended
- Originally idea was look at a couple of personal examples in which demand seemingly outweighed supply by a significant margin, but use logic and math to show the reality is likely much more reasonable than it appears
- Kind of a lesson like “don’t panic, take a breath, and let’s work through the numbers”
But when I got to the end of the original outline, I asked myself why does this excitement and warped perception happen in the first place
- It was an answer in which I was familiar with all of the components, but had never linked them together in such way before
- Yet it made complete sense, and I was a bit disappointed in myself that I didn’t link them on my own
This was initially just to satisfy my own personal curiosity
- But since I found the information intriguing, I decided to include it in the episode
This is The STEM Sessions Podcast Episode 18 – Supply, Demand, and Cognitive Bias
Live in CA, so the COVID-19 shutdown was quite heavy handed
- At some point, outdoor gyms were allowed to open, including public outdoor swimming pools
- My gym didn’t reopen, so took advantage of the pool
Number of swimmers limited to adhere to physical distancing requirements
- 18 lanes, one swimmer per lane
- Members of the same household could share a lane
Reservations opened two weeks in advance
- All 18 would be snatched up 20 minutes
- Free for all like ticketmaster back in the day
Any given session, typically three or six no shows
- You paid at the time of reservation and no refunds were given so no incentive to cancel
- No-shows would then go to people on the in-person wait list a few minutes after the session commenced
Obviously demand was greater than the supply of reservations, but how much greater?
- Given the speed at which reservations were gobbled up as soon as they became available, I wouldn’t fault anyone for thinking hundreds of people were looking to get one of those 18 spots
- But if we stop to think about it logically, that isn’t the case
- Remember, any given 8P session (the only time slot I went to) would have 3-6 people on the wait list
- Most would get in
- So the demand was at least 21-24: the 18 reservations plus the 3-6 wait list
- Could be more because it’s possible interested parties may not show up at all without having a reservation, but it was certainly not more than 30
As COVID restrictions loosened, the pool changed to two swimmers per lane regardless of household
- Total slots was now 36
- Still reservable at 8A two weeks in advance
- Same 8P session that originally sold out in 20 minutes, now never did
- Spots almost always available to reserve up to the day before
Demand obviously lower than 36 supply, so the math we walked through earlier was in the ballpark
- but to those of us who participated in the process, the demand felt significantly higher than that
- That’s why we set an alarm to remind us to be on the website at 8A ready to make reservations
Similar phenomenon is currently happening at Disneyland
- Daily reservations are in short supply, if any are available at all
- Leading to a lot of complaining and over-reactions
- But this has never been the case historically
Prior to pandemic shutdown, Disneyland had very popular Annual Passport (or AP) program
- Rumored to have been over a million passholders
- Majority were local to southern california, and in the name of full disclosure, I was one of them
- AP tiers differed by blackout calendar, but as long as your specific tier was not blocked on the day you wanted to go, you could show up and get it
- Only on rare occasions – Christmas and special events like the 24-hour days – were APs turned away due to capacity limitations
Today, the AP program has been replaced with a new program called Magic Keys
- Many similarities such as the tiered blackout calendar
- But big difference is you need a reservation for the day in question in order to attend
- Reservations available 60 days in advance
- Different tiers can hold a different number of reservations at the same time
- November and December are reservation wastelands – all have been gobbled up for some time
Like my swimming pool example, demand obviously exceeds supply of Disneyland reservations
- And also like the swimming pool example, the urgency and the competitiveness would lead one to believe the demand is easily 10X the supply
- So let’s use similar thought process to gauge the real scope
No one knows the max capacity of the two Disney parks in Anaheim
- Fire code sets limits for the restaurants, theaters, and indoor rides, but not the overall park
- Most guesses place Disneyland capacity around 85000 and Disney California Adventure (DCA) around 50000, or 135000 for the resort
- May be on the low side – I could see 100,000 for Disneyland and 75,000 for DCA being reasonable – but will stick with the first assumptions
Average attendance pre pandemic was 51000 and 27000 for Disneyland and DCA respectively, again based on educated guesses
- Weekends tended to see the most people, with weekdays typically less crowded
- Busy days were likely 80% the capacity limits, so 68,000 for DL and 40,000 for DCA, or 108000 total
- I realize “busy” is a very subjective term, but I feel its use is appropriate with this explanation
- As someone who visited the parks multiple times a month, if not weekly or more than weekly, there was a palpable difference between a normal day and a busy busy day – difficult to explain – you just felt it
- And this “feeling” plays into the way I estimate attendance
Remember, there were a million APs, and no one ever turned away, therefore daily demand pre-pandemic obviously never exceeded the resort capacity of 135,000
- Based on the “busy” day attendance, I think we safely put an upper limit on daily demand at 108000
- Average daily demand of 78,000
- These numbers include non-Aps – the single day ticket holders
Today, the resort is setting hard capacity limits via the number of reservations
- Doing this to because of staffing shortages
- Attempting to more evenly spread attendance throughout the week rather than having weekends above average, and the weekdays below
I’ve observed the parks to be at least as busy as the pre pandemic average but definitely not busier than the really busy days of the past
- 60,000 for DL and 35,000 for DCA are reasonable estimates, making 95,000 total
- Because most days have no reservations available, these are the capacities that have been set
- This is the combined available reservations for key holders and single day ticket holders, even though they come from different pools
- Disney sporadically moves unused single day ticket holder reservations over to the key holders pool, and they are typically consumed within days
This establishes the supply, but what is the daily demand for reservations
- Using various facebook groups and message boards as guide sticks, one would think the demand is mulitple times the capacity
- But much of that is grumbling by former AP holders who are used to going whenever they wanted
- An obnoxious minority of us rightfully gained the nickname “passholes” for a reason
Let’s ignore the hyberole, and apply some logic to the question
- It’s all but certain there are fewer Magic Key holders than there were AP holders
- AP program existed for decades, Magic Key for a half-year
- If there were a million APs, there are likely only a few hundred thousand magic keys, and that may be an over estimate
- Obviously demand is equal to the cap of 95000, plus the magic key holders who can’t get reservations on any given day
Regarding single day ticket holders, we can assume it’s roughly the same as pre-pandemic
- Tourism is still down, judging by hotel occupancy
- But some former APs have converted to single day tickets so it probably evens out
Again, old max capacity was 135000, which was never reached
- Old busy day was 108000, which was often reached
- New capacity is artificially set at 95000 give or take
- If 135000 was never reached we know the current demand is most likely less than that
My best guess is if Disney increased the number of reservations to say the old busy day attendance of 108,000 there would always be reservations available the day of
- Meaning daily demand, despite the online doom-saying, is likely only a few thousand more than the current cap
- So if Disney increased capacity by a few thousand reservations, maybe 15%, the built up ill will would likely dissipate since the calendar wouldn’t be slammed shut
Demand may be even less considering people are most likely hoarding reservations
- When magic keys were introduced, you could often get “day of reservations”
- If not day of, certainly week of
- As we approached the holidays and people saw more dates fill up, they were hit with a sense of urgency, so they made future reservations without knowing for certain if they’d be going (you can cancel the night before with no penalty)
So what compels people to feel such urgency to the point of hording in these situations?
- For that answer, let’s look to another recent hoarding event – toilet paper at the beginning of the COVID-19 pandemic
Scientists at the National Center for Biotechnology Information (part of the National Institute of Health NIH) performed a systematic review and realist synthesis of data and studies of the toilet paper hoarding
- Realist review found the primary causes were social cognitive biases such as the bandwagon effect
- Incidentally, a realist review is an interpretative review of the literature which considers interaction among context, mechanism, and outcome
- Opposed to a systematic review that collects empirical evidence that fits pre-specified eligibility criteria in order to answer a specific research question
Cognitive biases are errors in our thinking or errors in how we interpret external data that influence our decision
- Simple example is giving more weight to one’s personal anecdotes than confirmed statistics
Bandwagon effect is a cognitive bias in which a person makes a decision primarily because other people are making the same decision
- Can be dangerous because person making the decision often ignores both logic AND prior experiences
- Social media amplifies the power of the bandwagon
- Adds to the sense of urgency – fear of missing out
- And that is precisely what happened in the two examples I’ve presented
Interestingly, today we often place a negative connotation on bandwagon effect and other cognitive biases, but we evolved these tendencies for a reason; it was advantageous to survival as an individual and procreation as a species
- Cognitive biases speed up decision making in life and death or other urgent situations – if you see a people running in a panic in the same direction, the bandwagon effect influences you to run the same direction rather than stop and evaluate why everybody is running
- Instinct tells you they’re running from something dangerous and you should too!
- Bandwagon effect also lead to safety in numbers, which was important when humans were preyed upon by larger animals
Cognitive biases are a primal, instinctual, and advantageous method of weighing options when the choice determines if you’ll survive a scenario
- But in the modern world, where our survival doesn’t hinge on every decision we make, it’s more often than not better to follow higher level logic and statistics when making our decisions
- Cognitive biases lead us astray in our modern lives; to irrational decisions such as a hoarding reservations to theme parks
Thank you for listening to The STEM Sessions Podcast.
This episode was researched, written, and produced by Jarl Cody.
Here at The STEM Sessions, we strive to share accurate and complete information, but we also encourage you to do your own research on the topic we discussed to confirm the accuracy of what we’ve presented. Corrections are always welcome.
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Finally, please remember STEM is not a tool exclusive to experts, policy makers, and talking heads. Every presenter is susceptible to unconscious and, sometimes, deliberate bias, so always verify what you read and what you’re told.
Until the next one, stay curious.
REFERENCES
“A systematic review and realist synthesis on toilet paper hoarding: COVID or not COVID, that is the question”
- Javier Labad, Alexandre González-Rodríguez, Jesus Cobo, Joaquim Puntí, and Josep Maria Farré
- https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7849510/
” The Bandwagon Effect: Are we going to think for ourselves?”
- Linda Bloom, L.C.S.W., and Charlie Bloom, M.S.W.
- https://www.psychologytoday.com/us/blog/stronger-the-broken-places/201708/the-bandwagon-effect
“Bandwagon Effect as a Cognitive Bias”
“What Is the Bandwagon Effect?: How are trends born? Why do we copy others? The answer lies in our psychology.”
- Walter Veit
- https://www.psychologytoday.com/us/blog/science-and-philosophy/202003/what-is-the-bandwagon-effect
“On Information Design in Games”
- Laurent Mathevet, Jacopo Perego, and Ina Taneva
- https://www.journals.uchicago.edu/doi/abs/10.1086/705332?journalCode=jpe