The Real Reason You Can't Get a Cab in the Rain
The classic 1997 behavioral economics paper, Labor Supply of New York City Cabdrivers: One Day at a Time, had a simple explanation for why finding a cab is hard when it rains in New York. More people want taxis when the weather’s lousy, but fewer are on the road. Demand up, supply down. The study’s authors speculated that the reason cabs get off the road is that drivers set themselves earnings targets, and they reach them sooner on rainy days. Their conclusion wasn’t flattering: Drivers were either irrational or naive to leave extra earnings on the table.
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