Ladies Night

Six months ago the state of New Jersey ruled that ladies night ( the practice of letting women enter bars/clubs without cover charge and get discount for drinks) was illegal and violated civil rights law. Now that's public policy went nuts. First, I don't think it is the state's business to tell how restaurants should roll out their promotional activities. Second, I don't see the harm at all.

The economic theory of the firm tells us that the firm's main objective is to maximize profits. We have to remember every thing that the firm does is geared towards this objective. Ladies night is no exception. It is a way actually for the bars/clubs and the women to internalize the positive externality that the ladies create with their presence. A single man (heterosexual for now in this case) goes to the bar in the hopes of picking up a girl (or say have intelligent conversation by the bar). He's got more incentive to come when his chances are high (ratio of women to men is good). Ladies by being present at the club induces men to show up. Bar/Club manager is happy. Manager wants windfall to continue, spreads it out some over weak nights. Manager is willing to split the profits with the ladies by giving them discounts so they'll have the incentive to come. Everybody happy. Guys in New Jersey, good luck.