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It doesn't work. It's unenforceable without the government to enforce it, and even then people will skirt it. Rules constraining how a market functions often

It doesn't work. It's unenforceable without the government to enforce it, and even then people will skirt it. Rules constraining how a market functions often don't work or have unintended consequences. The only real solution is to attack supply and/or demand. A rule limiting how many a person can buy doesn't actually affect demand, it just affects that market's ability to respond to demand. You get people that circumvent that, and if it's onerous enough you'll get a secondary market where they cost more but there's no limit on the amount you can buy, if there wasn't one already. That is, it's restrictions on a free market which create secondary markets. If the price was constantly in flux base don demand, there would be no secondary market because it would provide nothing over the primary one. People don't want that though, because we've been conditioned over the last century to expect prices to be stable because we've had large companies that decided to innovate and compete in other areas that decided pricing things accurately based on real world local conditions. I mean, I understand, I'm the same way. I don't want to walk into a store and find the thing I went to buy is twice as expensive as it was yesterday. I do think that's a more natural and sustainable state though, as long as market principles are actually prioritized though, instead of just being paid lip service (having one entity control a large chunk of a market is bad, and so is making it hard to reason about items and features in a market, as competition and information are the life-blood of free-markets).

Dylan16807 5y ago
> It doesn't work. It's unenforceable without the government to enforce it, and even then people will skirt it. Okay, but when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem. > A rule limiting how many a person can buy doesn't actually affect demand, it just affects that market's ability to respond to demand. There's a nearly fixed supply, because no amount of demand can affect the shortages. There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it. In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit. You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people.
- kbenson 5y ago
  > when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem. How is restricting activity not a rule? I don't think it would demonstrate the problem at all because I don't think it would actually do much (most people would ignore it). Maybe I'm misunderstanding what you meant originally or mean here? > There's a nearly fixed supply, because no amount of demand can affect the shortages. If demand dropped to the point below supply it wouldn't be a shortage. > There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it. > In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit. Sure they are. Without a secondary market and with a primary market that is fixed-price and a limited supply, after demand meets supply, nobody gets any more of that product, which means there's zero liquidity. With a secondary market, people re-sell for a profit, and the market has liquidity again. The people that want it are able to get it as long as they are willing to pay the extra amount. It's possible to buy the item where it would not be previously. > You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people. I agree. I just don't think you can do anything about it usefully except to try to increase supply or reduce demand through various means. Everything else I've seen fails or has unintended consequences (which are hard to reason about ahead of time because they are by nature unintended). I'm not arguing free markets always produce a good outcome, but I do think they generally provide the best outcome you can expect given the environment without relinquishing all control (and I think central planning only works for limited scopes and limited time frames). The simple solution is to just increase the price of these cards to what the market deems they are worth, and the resale market problem goes away. The problem is that nobody (even me) really wants that, I'm just willing to say that while I don't want it for various reasons, it does solve the problem. It does that by reducing demand by increasing the price.
Nursie 5y ago
> It doesn't work. It's unenforceable without the government to enforce it It seems to be working pretty well here in the UK actually, for nvidia's Founders Edition cards. They have a relationship with a single retailer, and you can buy one card. Yes, people can circumvent it to a small extent, but not that easily. You're just parroting your free-market religion here.

Dylan16807 5y ago

> It doesn't work. It's unenforceable without the government to enforce it, and even then people will skirt it. Okay, but when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem. > A rule limiting how many a person can buy doesn't actually affect demand, it just affects that market's ability to respond to demand. There's a nearly fixed supply, because no amount of demand can affect the shortages. There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it. In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit. You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people.

kbenson 5y ago
> when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem. How is restricting activity not a rule? I don't think it would demonstrate the problem at all because I don't think it would actually do much (most people would ignore it). Maybe I'm misunderstanding what you meant originally or mean here? > There's a nearly fixed supply, because no amount of demand can affect the shortages. If demand dropped to the point below supply it wouldn't be a shortage. > There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it. > In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit. Sure they are. Without a secondary market and with a primary market that is fixed-price and a limited supply, after demand meets supply, nobody gets any more of that product, which means there's zero liquidity. With a secondary market, people re-sell for a profit, and the market has liquidity again. The people that want it are able to get it as long as they are willing to pay the extra amount. It's possible to buy the item where it would not be previously. > You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people. I agree. I just don't think you can do anything about it usefully except to try to increase supply or reduce demand through various means. Everything else I've seen fails or has unintended consequences (which are hard to reason about ahead of time because they are by nature unintended). I'm not arguing free markets always produce a good outcome, but I do think they generally provide the best outcome you can expect given the environment without relinquishing all control (and I think central planning only works for limited scopes and limited time frames). The simple solution is to just increase the price of these cards to what the market deems they are worth, and the resale market problem goes away. The problem is that nobody (even me) really wants that, I'm just willing to say that while I don't want it for various reasons, it does solve the problem. It does that by reducing demand by increasing the price.

Nursie 5y ago

> It doesn't work. It's unenforceable without the government to enforce it It seems to be working pretty well here in the UK actually, for nvidia's Founders Edition cards. They have a relationship with a single retailer, and you can buy one card. Yes, people can circumvent it to a small extent, but not that easily. You're just parroting your free-market religion here.