> 1. They change the distribution of a good from a lottery, to a 'whomever pays more gets it' auction. The original distribution was hardly a lottery, it was a

> 1. They change the distribution of a good from a lottery, to a 'whomever pays more gets it' auction. The original distribution was hardly a lottery, it was a competition on latency (i.e. competition to be first in line). They change the distribution of some of the supply from a competition on latency to a competition on price. Consumers vary in their ability and preference to compete on latency, and in their valuation of the time/pleasure trade-off. Assuming a fixed supply of switches (in the short term), scalpers add value for those consumers whose preferences are such that they would in this instance prefer to compete on price rather than latency, and are willing to pay the going premium for not having to compete on latency. Without the scalpers, these consumers would have no option but to wait for new supply. There's really nothing unfair going on. Side note, high frequency trading is kind of an interesting example of the converse situation, where inability to compete on price forces everyone to compete on latency. Because the exchange has a minimum "tick size" for changes in price (a penny or tenth of a penny, or whatever, depending on the exchange), there comes a point where it is no longer possible for buyers and sellers to compete with each other further on price, and so the only thing left to compete on is latency.