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Some have argued that scalpers, like other risk arbitrageurs, accelerate market price discovery. If you buy the argument that markets are net positive for soci
by 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 agoThis 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 agoEquilibriums 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 agoThe 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 agoMy 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 agoSure, 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?