ReservationHop and the Effect of Unrestricted Marketization on Society

The aim of this thesis is to conduct a case study examining the intrusion of marketplace ideals on various aspects of everyday life. In this thesis, I provide a case study of a new business in San Francisco, ReservationHop, that transforms the previously first come, first serve restaurant reservation service into an auction style scalping (resell at a higher price) system, thereby affecting the distribution of an economic service, or good. In order to investigate this phenomenon, this thesis is organized into six main sections. First, I will provide a brief introduction to the thesis, presenting my aim and purpose in writing and why I believe that this is an important topic. I then introduce ReservationHop and describe the site and its business model, the controversy that it has evoked, and the app’s creator Brian Mayer’s attempts to defend the app’s legitimacy. Thirdly, I will provide considerations in support of the ethical permissibility of the ReservationHop business model, using two neoclassical economic arguments: consumer choice theory and the Pareto-efficiency argument. Fourthly, I will counter these arguments, claiming that this service is not a Pareto optimal improvement because it involves deception, which is incompatible with genuine Pareto optimality. In the fifth section, I will introduce my main argument against ReservationHop in which I introduce the idea that there is something inherently wrong with the service even if its deceptive characteristics were corrected for. I argue that there should be “things that money cannot buy” because unfettered marketization erodes the nonmarket value of community, or commonality. In conclusion, this thesis argues that the intrusion of marketplace values on all aspects of society should be resisted, and that we must rethink the increased influence of marketization for it crowds out other important non-market values, e.g., our sense of community solidarity.