4 ms·

Negative. Like scalping everywhere, they're middlemen who contribute nothing to society, and make it more difficult for people who do.

blevin 5y ago
Some have argued that scalpers, like other risk arbitrageurs, accelerate market price discovery. If you buy the argument that markets are net positive for society by relaying information about economic trade offs, scalpers aren’t necessarily bad even if they are indeed annoying to market participants by lifting the ask. Of course there are extreme conditions where we also might decide that using money as the universal conveyance of value is a bad thing because it reveals how unequal outcomes in society have been… And the usual response is to shift to rationing rather than price to allocate scarce resources. But with rationing you get sidechannel markets and not necessarily efficient allocations.
- Swenrekcah 5y ago
  This argument feels wrong to me. If there is a market for the chip, it will find a market price. If there isn’t there isn’t. If the market is in an equilibrium and the chip manufacturer makes some money on their chips, and the chip buyers make some money on their products, the a scalper coming in and sucking up all the profit isn’t doing anybody in the world any good except themselves.
  - skybrian 5y ago
    Equilibriums don’t just happen by themselves. When there isn’t an equilibrium, delaying sales by keeping inventory helps the people who didn’t plan ahead. The ant planned ahead for the winter, the grasshopper didn’t, and the scalper provides a service to the grasshopper, for a price.
  - medvezhenok 5y ago
    The scalpers don't suck up profit, since if there is a functioning market, you can't really scalp. Scalping exists when there is a discrepancy between a marked price and the market price of an item. If scalpers were not a thing, you would have shortages. With scalpers, you still have shortages, but you can acquire the good by paying a higher, market clearing price. That higher price either makes it so that rich people can get the thing (most don't like this), or that people who really need it can get it (i.e. lifesaving medication etc). So your view of scalpers might be influenced by the distribution of (1) and (2) going on.
    - nicoburns 5y ago
      My observation is that you mostly get (1). And this is also why wealth inequality (both on a personal and a corporate level) is so bad.
    - Swenrekcah 5y ago
      Sure, I get all that but scalping is still in essences a leeching practice. And yes they can suck up profits, that’s their whole thing. Are you saying that profits can’t exist in a functioning market?
milesvp 5y ago
So, you may be right about scalpers providing nothing to society. But you are absolutely wrong about middle men in general. At a super high level, they have to provide value else they would be short circuited. Very often this value is in knowledge, both product knowledge, customer knowledge, and market fit. A good middle man can tell you that the thing you think you want won't fit your needs as well as some other product (bonus points if the product isn't something they personally sell). You will also find a high correlation between the health of an economy, and the number of middlemen present. It's actually something that has concerned me in the US for several years, that too many companies have been squeezing out the middle. I think it's exacerbated the current supply chain issues.
- pishpash 5y ago
  Middlemen are good if they unbundled and directly charged for their services and did not act as arbitrageurs simultaneously. Middlemen who withhold information or resist competition are rent seeking, which is a strictly negative utility for society.
bluecalm 5y ago
Well, they provide value. They make it possible for people/entities who needs things the most to actually get them instead of those who happen to be first in line or in lucky position to get access to supply.
- TeMPOraL 5y ago
  Correction: they make it possible for people/entities who can afford to waste most money to get them instead of those first/lucky. But how is that a better outcome? And why should this involve people spending more money, and all the delta going to the person who was first in line or in lucky position to secure a loan and buy off all the supply?
  - medvezhenok 5y ago
    Scalpers allow people who are not price sensitive or have inelastic demand priority over people who are lucky / first. The ethics depends on the exact case study provided. If it's a rich person buying an xbox (not price sensitive) - that's one thing, and most people would not support it. If it's someone needing an IC for a heart monitor to stay alive (inelastic demand), most would say that providing them an IC over someone who wants to play the latest video game is a good service. Scalpers do both (1) and (2).
    - nicoburns 5y ago
      Scalpers only do (2) for those who can afford it. If scalpers were willing to hand out goods on the merit of the application rather than profit then I’d have much more sympathy. But then they wouldn’t really be scalpers anymore. I’m willing to bet that scalpers starve critical applications of goods far more than they provide them. Providers of critical services are usually poorly funded.
    - bluecalm 5y ago
      Or maybe they are price sensitive but the goods are just worth more to them.
thow-01187 5y ago
They provide short-term, non-committal inventories and buffers to a supply chain that doesn't have them, since it runs on long-term contracts. In some ways, they're capitalizing on the failures of just-in-time inventory dogma
- rtpg 5y ago
  The chips would have been sold in any case! They're taking advantage of some fluxuations to make money for themselves. That isn't helpful for the producer nor for the purchaser of the goods. This isn't people setting up futures for 555 timers. This is people scooping up PS5s and immediately selling them for an extra $200. Of course it's nobody's god-given right to own a PS5 but there's not value being produced here.

blevin 5y ago

Some have argued that scalpers, like other risk arbitrageurs, accelerate market price discovery. If you buy the argument that markets are net positive for society by relaying information about economic trade offs, scalpers aren’t necessarily bad even if they are indeed annoying to market participants by lifting the ask. Of course there are extreme conditions where we also might decide that using money as the universal conveyance of value is a bad thing because it reveals how unequal outcomes in society have been… And the usual response is to shift to rationing rather than price to allocate scarce resources. But with rationing you get sidechannel markets and not necessarily efficient allocations.

Swenrekcah 5y ago
This argument feels wrong to me. If there is a market for the chip, it will find a market price. If there isn’t there isn’t. If the market is in an equilibrium and the chip manufacturer makes some money on their chips, and the chip buyers make some money on their products, the a scalper coming in and sucking up all the profit isn’t doing anybody in the world any good except themselves.
- skybrian 5y ago
  Equilibriums don’t just happen by themselves. When there isn’t an equilibrium, delaying sales by keeping inventory helps the people who didn’t plan ahead. The ant planned ahead for the winter, the grasshopper didn’t, and the scalper provides a service to the grasshopper, for a price.
- medvezhenok 5y ago
  The scalpers don't suck up profit, since if there is a functioning market, you can't really scalp. Scalping exists when there is a discrepancy between a marked price and the market price of an item. If scalpers were not a thing, you would have shortages. With scalpers, you still have shortages, but you can acquire the good by paying a higher, market clearing price. That higher price either makes it so that rich people can get the thing (most don't like this), or that people who really need it can get it (i.e. lifesaving medication etc). So your view of scalpers might be influenced by the distribution of (1) and (2) going on.
  - nicoburns 5y ago
    My observation is that you mostly get (1). And this is also why wealth inequality (both on a personal and a corporate level) is so bad.
  - Swenrekcah 5y ago
    Sure, I get all that but scalping is still in essences a leeching practice. And yes they can suck up profits, that’s their whole thing. Are you saying that profits can’t exist in a functioning market?

milesvp 5y ago

So, you may be right about scalpers providing nothing to society. But you are absolutely wrong about middle men in general. At a super high level, they have to provide value else they would be short circuited. Very often this value is in knowledge, both product knowledge, customer knowledge, and market fit. A good middle man can tell you that the thing you think you want won't fit your needs as well as some other product (bonus points if the product isn't something they personally sell). You will also find a high correlation between the health of an economy, and the number of middlemen present. It's actually something that has concerned me in the US for several years, that too many companies have been squeezing out the middle. I think it's exacerbated the current supply chain issues.

pishpash 5y ago
Middlemen are good if they unbundled and directly charged for their services and did not act as arbitrageurs simultaneously. Middlemen who withhold information or resist competition are rent seeking, which is a strictly negative utility for society.

bluecalm 5y ago

Well, they provide value. They make it possible for people/entities who needs things the most to actually get them instead of those who happen to be first in line or in lucky position to get access to supply.

TeMPOraL 5y ago
Correction: they make it possible for people/entities who can afford to waste most money to get them instead of those first/lucky. But how is that a better outcome? And why should this involve people spending more money, and all the delta going to the person who was first in line or in lucky position to secure a loan and buy off all the supply?
- medvezhenok 5y ago
  Scalpers allow people who are not price sensitive or have inelastic demand priority over people who are lucky / first. The ethics depends on the exact case study provided. If it's a rich person buying an xbox (not price sensitive) - that's one thing, and most people would not support it. If it's someone needing an IC for a heart monitor to stay alive (inelastic demand), most would say that providing them an IC over someone who wants to play the latest video game is a good service. Scalpers do both (1) and (2).
  - nicoburns 5y ago
    Scalpers only do (2) for those who can afford it. If scalpers were willing to hand out goods on the merit of the application rather than profit then I’d have much more sympathy. But then they wouldn’t really be scalpers anymore. I’m willing to bet that scalpers starve critical applications of goods far more than they provide them. Providers of critical services are usually poorly funded.
  - bluecalm 5y ago
    Or maybe they are price sensitive but the goods are just worth more to them.

thow-01187 5y ago

They provide short-term, non-committal inventories and buffers to a supply chain that doesn't have them, since it runs on long-term contracts. In some ways, they're capitalizing on the failures of just-in-time inventory dogma

rtpg 5y ago
The chips would have been sold in any case! They're taking advantage of some fluxuations to make money for themselves. That isn't helpful for the producer nor for the purchaser of the goods. This isn't people setting up futures for 555 timers. This is people scooping up PS5s and immediately selling them for an extra $200. Of course it's nobody's god-given right to own a PS5 but there's not value being produced here.