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> There’s also how much you actually want it, and the amount of opportunity cost you’re willing to pay. Money doesn't have much relation to opportunity cost in

> There’s also how much you actually want it, and the amount of opportunity cost you’re willing to pay. Money doesn't have much relation to opportunity cost in the presence of enormous wealth inequality. An unemployed person willing to pay their entire bank account of $100 for some good clearly wants it more than a work-from-home tech worker willing to pay the $600 they made yesterday. The same applies to businesses using cloud services. A struggling local business has a ludicrously low cap on what they can pay for Teams compared to Walmart or something.

AmericanChopper 7y ago
I’d consider providing essential services to low income people disadvantaged during a crisis to be a seperate issue all together. I’d also suggest that such an issue would only apply to a narrow band of essential products and services. An unemployed person with $100 in their account isn’t going to care about how much access they have to high quality video conferencing. However, if I have the option of using a 12 person video conference for my morning standup, why wouldn’t I use it? If there was an additional cost for every video conference I wanted to have, I’d think more judiciously about when to use it. Which sounds better than the current situation of knowing that video conferencing is simply going to be unreliable and slow, regardless of how much I may need it for any particular meeting.
loeg 7y ago
You've just described how a monetary system works and have not refuted the link between prices and opportunity cost.
- chipotle_coyote 7y ago
  I'm not sure "opportunity cost" is the correct term for what the OP wanted to say, since it usually refers to the (theoretical) loss incurred by choosing one alternative over another. The point is simply that a consumer's ability to pay is not necessarily a reflection of their need of the product. That's not an argument to blithely decouple pricing from supply and demand, but it's a recognition of a problem that a market-based society needs to deal with under extraordinary conditions.
  - AmericanChopper 7y ago
    Opportunity cost is everything you choose to forgo when you choose to allocate any resources to anything. If supply and demand is allowed to have its normal influence on price, then you can decide what you actually have the most demand for, and allocate your resources accordingly. The decisions you make regarding your own needs are always going to be much more efficient than those that any rationing authority could ever make.
    - wtallis 7y ago
      > The decisions you make regarding your own needs are always going to be much more efficient than those that any rationing authority could ever make. If that were true, then hoarding wouldn't happen in the first place. You're obviously wrong here, and there's abundant evidence that consumers don't always make the best choices for themselves. Try scaling back your claims to something less absolute.
      - AmericanChopper 7y ago
        The hoarders benefit massively from hoarding. They benefit from a regulation that prevents the markets from responding to shortages and spikes in demand. They have no problem whatsoever deciding how to allocate their resources in that situation, which is the entire problem, because the market doesn’t force them to. An individual will always, every single time, without fail, know what they need better than a 3rd party who nominates themselves to make decisions on behalf of others. If you remove market forces from the situation, and establish an authority to decide who gets rationed what, it will always impact the efficiency of those resource allocation decisions.
        lenkite 7y ago
        "An individual will always, every single time, without fail, know what they need better than a 3rd party who nominates themselves to make decisions on behalf of others" This is completely false. Most individuals in a panic buying situation never know what they really need compared to a calm, educated and knowledgeable 3rd party. This crisis has also proved your assertion wrong - witness the mass buying of perishable foods and toilet paper. Food that was thrown out in a weeks time into garbage and food that was denied to others because of panic buyers.
- burkaman 7y ago
  The unemployed person in my scenario is willing to forgo the opportunity to buy food, pay rent, or buy literally anything else. The tech worker is paying a negligible opportunity cost, as they have tens of thousands in their checking account and paying $600 has no effect on their ability to purchase food, rent, or anything else they want. If I as the merchant believe the amount of money someone is willing to pay is equivalent to the opportunity cost they're willing to incur, I have to assume the person offering $600 wants it more.
deleted 7y ago
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AmericanChopper 7y ago

I’d consider providing essential services to low income people disadvantaged during a crisis to be a seperate issue all together. I’d also suggest that such an issue would only apply to a narrow band of essential products and services. An unemployed person with $100 in their account isn’t going to care about how much access they have to high quality video conferencing. However, if I have the option of using a 12 person video conference for my morning standup, why wouldn’t I use it? If there was an additional cost for every video conference I wanted to have, I’d think more judiciously about when to use it. Which sounds better than the current situation of knowing that video conferencing is simply going to be unreliable and slow, regardless of how much I may need it for any particular meeting.

loeg 7y ago

You've just described how a monetary system works and have not refuted the link between prices and opportunity cost.

chipotle_coyote 7y ago
I'm not sure "opportunity cost" is the correct term for what the OP wanted to say, since it usually refers to the (theoretical) loss incurred by choosing one alternative over another. The point is simply that a consumer's ability to pay is not necessarily a reflection of their need of the product. That's not an argument to blithely decouple pricing from supply and demand, but it's a recognition of a problem that a market-based society needs to deal with under extraordinary conditions.
- AmericanChopper 7y ago
  Opportunity cost is everything you choose to forgo when you choose to allocate any resources to anything. If supply and demand is allowed to have its normal influence on price, then you can decide what you actually have the most demand for, and allocate your resources accordingly. The decisions you make regarding your own needs are always going to be much more efficient than those that any rationing authority could ever make.
  - wtallis 7y ago
    > The decisions you make regarding your own needs are always going to be much more efficient than those that any rationing authority could ever make. If that were true, then hoarding wouldn't happen in the first place. You're obviously wrong here, and there's abundant evidence that consumers don't always make the best choices for themselves. Try scaling back your claims to something less absolute.
    - AmericanChopper 7y ago
      The hoarders benefit massively from hoarding. They benefit from a regulation that prevents the markets from responding to shortages and spikes in demand. They have no problem whatsoever deciding how to allocate their resources in that situation, which is the entire problem, because the market doesn’t force them to. An individual will always, every single time, without fail, know what they need better than a 3rd party who nominates themselves to make decisions on behalf of others. If you remove market forces from the situation, and establish an authority to decide who gets rationed what, it will always impact the efficiency of those resource allocation decisions.
      - lenkite 7y ago
        "An individual will always, every single time, without fail, know what they need better than a 3rd party who nominates themselves to make decisions on behalf of others" This is completely false. Most individuals in a panic buying situation never know what they really need compared to a calm, educated and knowledgeable 3rd party. This crisis has also proved your assertion wrong - witness the mass buying of perishable foods and toilet paper. Food that was thrown out in a weeks time into garbage and food that was denied to others because of panic buyers.
burkaman 7y ago
The unemployed person in my scenario is willing to forgo the opportunity to buy food, pay rent, or buy literally anything else. The tech worker is paying a negligible opportunity cost, as they have tens of thousands in their checking account and paying $600 has no effect on their ability to purchase food, rent, or anything else they want. If I as the merchant believe the amount of money someone is willing to pay is equivalent to the opportunity cost they're willing to incur, I have to assume the person offering $600 wants it more.

deleted 7y ago

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