The timeshare trap: Teaching economic equivalence through a real-world case in engineering economics

This paper presents a real-world case study that exposes violations of economic reasoning in a typical timeshare sales pitch. The case is based on an actual offer made to the author and is designed to help students apply core principles of engineering economics—such as present value, discounting, economic equivalence, and capital recovery—in a context that is both accessible and engaging. Students are asked to compare the cost of hotel stays over time with the upfront and ongoing costs of a timeshare, both with and without financing. The analysis reveals that the timeshare offer is economically inferior under reasonable assumptions, despite appearing attractive when future hotel costs are presented without discounting. The case also includes sensitivity analyses of time horizon, interest rates, inflation assumptions, and resale value. It concludes with a discussion of behavioral factors that may explain why such offers remain persuasive despite poor economic fundamentals. Used successfully in undergraduate engineering economics courses for over two decades, this case provides a replicable and pedagogically rich framework for teaching sound financial decision-making.