False Advertising or Caveat Emptor? Economics and Lap-dancing

It is always a good idea to make sure you know exactly what you're getting and what you're paying for when hiring a service provider. But under some circumstances, people might not be sure what is involved when they implicitly contract for "one session".

[h/t to Phil Miller, who says to file this under "the economics of information"]

Two Young Men In Jail After 82 Lap Dances

Two young men ...were arrested when they couldn't come up with almost $2,500 needed for their evening of entertainment.

"We are talking about a lot of money here," said Albuquerque Police Spokesman Trish Hoffman.

"Whether or not they understood, they still have to pay up when an agreement is made." According to a Metropolitan Court criminal complaint, the two went to Fantasy World, 5000 Jefferson NE, and asked exotic dancers Orchid and Carmela for private dances in the "VIP room."
Each dance costs $30. During the young men's two-hour stay in the room, the manager periodically checked to see if they wanted to pay for some of the dances. Each time the young men told the manager "not to worry" because they had the money, according to the complaint. By the time they were done, they had racked up a bill of $2,460. The young men only had $50 cash and a $500 limit on a credit card.

When interviewed by police, the young men told officers they didn't realize that they were getting multiple dances. Since it was their first time in an exotic club, they said they didn't know that each new song started a new dance, police said.

On one hand, if the clients are held liable for the charges, that will send a signal to future clients that they must make certain what is involved in the contract.

On the other hand, if the responsibility is left with the service providers, then they will make certain clients understand that "one session" involves one song, not two hours.

My guess: the least-cost bearer of the this risk of confusion and uncertainty is the proprietor, not the clients. The outcome of this case will almost surely hinge on whether the terms were clear to the clients.