We model local demand for each night by modeling hotel prices, flight data, conference attendance & more.
God forbid you could just set what you think is a reasonable price for your rental, and have somebody else come along and think your price is reasonable, too.
Customer preferences for slower moving prices are just like customer preferences for lower prices. They must be traded off against customer preferences for availability.
If prices didn't move then the market wouldn't clear, and some capacity or demand (at the current price) would be wasted.
You did. Perhaps my last sentence should have read:
If prices didn't move fast enough in response to changes in demand/supply then the market wouldn't clear, and some capacity or demand (at the current price) would be wasted.
