Soon after the pandemic hit, the world’s airlines turned off their pricing algorithms and resumed pricing flights manually. Everything the software had learned from people’s past behaviour was suddenly rendered irrelevant.
The software had been created for a world of discretionary travel where demand was elastic. If a plane seemed likely to leave half-empty, the software dropped prices to fill remaining seats. In March this once-efficient approach failed spectacularly. The few people who were still flying were doing so only in desperation: everyone else was unwilling to travel at any price. Far from reducing prices to respond to a drop in demand, it now made sense to hike them.
Large institutions are prone to a kind of conceptual locked-in syndrome
It is sometimes said that insanity is doing the same thing again and again and expecting a different result. But doing the same thing under different circumstances while expecting similar results is no less a form of derangement. The first behaviour is a characteristic of alcoholics; the second is a hallmark of bureaucrats, ideologues, management consultants and devotees of process automation. It is most prevalent among the more educated, for whom theoretical neatness is a major status marker: the very people who design systems and software.
(I changed from a Remainer to a Leaver for these very reasons. I had voted Remain, but was so alarmed by the monolithic thinking of hardcore Remainers, for whom there seemed no problem to which further integration was not the answer, that I switched sides. The problem with the EU, it seemed to me, was the same as the problem with the Archduke Franz Ferdinand’s car: it’s very difficult to put it in reverse.)
Large institutions are prone to a kind of conceptual locked-in syndrome — and the larger the organisation, the worse the effect.

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