Drinks: Derivatives And 72 Draft Beers

The Brew Exchange, a West 6th bar with fluctuating prices based on supply and demand for 72 draft beers, will be opening this month at the former Annie's West location. This unique concept, implemented by Kung Fu Saloon owners, has already generated quite a bit of buzz and speculation. We checked in with a group of finance experts and beer connoisseurs for insight and predictions on the Wall Street-inspired pricing model.

“I would predict that you'll actually end up with fairly homogeneous prices from the confluence of people who are there to try different beers and the financial motivation created by the pricing model. It doesn't seem to be a half bad way to nudge consumer behavior to something more profitable. People will come for variety without an objective in mind and be nudged into a particular beer.” - Chris, Master of Accounting

“Sounds like a great way to subsidize unpopular beers, and to keep kegs turning over to keep them fresh. It doesn't, however, sound like a good idea for making money. And I'd love to study their price/quantity dataset.” - Chuck, Former Financial Economist

“Cheaper = popular. Kids will drink cheap beers to drive up the price; eventually the price will be the same as your neighboring competitors, enough to keep your crowd but not high enough to drive them away.” - Dina, Master of Finance

“With such a large selection, I think the target audience is going to be in the mindset to choose a mid-priced option. Like wine and gambling, novices ride the line. Prices will probably stay within a dollar (or even .50) of each other unless a beer is truly awful [or] the keg is almost empty. In the end, no one overpays for beer. Unless it's something like Natty Light or The Beast, then anything is too much.” - Ben, Beer Enthusiast

“As an aficionado of craft beer, I am always interested in bars that offer a wide array of beer choices. My concern would be that the novelty would be short lived. It raises the question if a beer that is in short supply but in high demand would soon become a $10.00 beer. I foresee hipsters duking it out over a radically over priced Yuengling in the near future.” - Bruce, Beer Snob

“If they do a good job with the beer selection, it's a fantastic way to try a beer you've never had before on the cheap. Newer and lesser known beers almost always sell slowly, and so should end up cheaper than Miller Lite. However, if those 72 beers are the same you can get at any other bar in the area, it will be a very expensive way to drink Shiner and Bud.” - Drew, Beer Connoisseur

Image via Brew Exchange Austin.