August 2, 2007
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Via Marginal Revolution – perhaps Russ should use this concept in his Transport Planning course?
“My favourite ticketing system was in Mumbai, India,” Kim enthuses. “No one actually buys a ticket, but you can buy ‘ticket insurance’ from private entrepreneurs who work at the entrance of the station. The ‘ticket insurance’ is about half the price of a regular rail ticket. It gives you a guarantee that, in the extraordinary event that you are booked by a railways inspector for taking a free ride, your fine will be paid. A relative was once booked and the ticket insurer paid the fine exactly as promised.”
Here is the link, and thanks to Brendan Leary for the pointer.
At the very least, it’s a new way of thinking about Russ’ free rider problem.