So it has come to this! In an effort to equalise the gender ratio of patrons, two central Melbourne nightclubs last week were granted exemption from the Anti-Discrimination Act. No longer will men be blocked entry into nightclubs because of dubious ‘members only’ nights or for wearing the wrong coloured t-shirt; now bouncers can be honest and just say ‘fuck off mate, you’ll lower the odds of people scoring’. Now I’m more of a bar person myself (at least you are able to talk to people in bars without shouting in their ears) and have never really been a big fan of nightclubs, but telling men to ‘fuck off’ is a stupid idea. There is a better, more profitable, and kinder way of achieving a gender balance. By seeking to reject men, the nightclubs recognise that there are two distinct markets for their services – men and women; each with their own levels of demand and elasticity. It also shows that nightclubs operate in a oligopolistic, or perhaps even a monopolistic fashion, since under a competitive environment, a nightclub would not dream of discriminating patrons for fear of massive loss of revenue. Given all this, the nightclubs could take a leaf out of what the public transport system has been doing for centuries and practice price discrimination instead of sex discrimination. A child pays less to get on a bus than an adult; nightclubs could charge a higher entry fee for men than women. Or maybe even give free entry to men who can bring along four or more women with him. Of course, the exact entry fee amount will be hard to gauge at first and will be based on men and women’s respective levels of demand. This way, not only will men feel better knowing that getting into a nightclub is not beyond their control (only need money), nightclubs also won’t lose as much money – as the following diagrams illustrate: Here, the blue and red lines represent the men’s and women’s respective demand (= average revenue in this case: AR) and marginal revenue (MR) functions. The yellow line shows the nightclub’s marginal cost function (MC). For times sake, I won’t go into detail of what they all mean or the mechanisms of monopoly pricing, but a decent explanation can be found here.
In the diagram above, the nightclub only allows a certain number of men and women inside the club (Q) and each paid the same amount to get in (P). The loss in profit from the excess demand of men trying to get in is shown by the area between the men’s marginal revenue and the nightclub’s marginal cost functions (shaded area).
Now suppose the nightclub does not put a restriction on quantity as such, but charges men a higher price (P (M)) than women (P (W)) to make up for the excess demand. Now the profit loss, or the shaded area, has shrunk considerably. Of course, for the nightclub to maximise its profits it would have to release its restrictions on quantity and charge at a price where marginal cost equals marginal revenue. If anything, these two Melbourne Nightclubs’ exemption from these laws will only attract more men to these venues. Think about it, finally a club where there’s a gender balance. ‘Come on boys!’