4 ms·

Scalping is just meeting an ineffeciency in supply and demand. I don't know why we feel the need to regulate one of the basic principles of a market. If you tr

• nojito 5y ago
  Scalping increases MSRP. Removing it would cause it to decrease.
  • xboxnolifes 5y ago
    The only reason scaplers exist is because people are willing to pay a higher price than what the scalper pays for the good. The fact that people are willing to pay the higher price shows it was priced too low.
    • wpietri 5y ago
      It does not show that at all. Taking Nintendo as mentioned above, they have plenty of reason to aim for a stable, low price. The economics of their business are different than somebody, say, selling their labor by the hour. If they maximize per-console profit, they end up screwing themselves by creating a platform without many users, which is then unattractive to both game-makers and game-purchasers.
      • lghh 5y ago
        They are not selling less units for a higher price, they are selling the same number of units for a higher price.
        • wpietri 5y ago
          So?
    • tyingq 5y ago
      Sometimes based on artificial scarcity created by a scalper. People are sometimes paying for a status symbol and wouldn't have purchased the item otherwise. Meaning their interest was only piqued after the item was hoarded.
    • ribosometronome 5y ago
      Generally, price gouging is frowned upon by society and detrimental to a healthy market.
      • xboxnolifes 5y ago
        The scalping only exists because the market was "unhealthy" (not efficient). What is detrimental to society and markets which are based around maximizing utility of dollar spent is the massive wealth inequality that makes it so things need to be priced so low as to actually allow a majority of the population to afford their choice of scarce resources.
    • vlovich123 5y ago
      All it shows is that price discrimination is needed, not that the price is too low. Indeed, raising the price may net reduce revenues if they’ve already priced the MSRP optimally on the price demand curve. The only solution here would be to have an MSRP that’s dependent on your net worth but that’s seen as undesirable so instead we get 2 price points: scalpers and normal channels. So rather than the manufacturer or consumer seeing the benefit of price discrimination, the scalper, who’s essentially rent seeking, gets to arbitrage that opportunity. Either ban resale for more than retail or let manufacturers alter their prices based on your price sensitivity.
    • notahacker 5y ago
      This assumes the only purpose of selling is to maximise short term yield on that particular item. One of the reasons ticket scalpers associated with events are particularly despised is that the promoters of the event would much rather the event was affordable and full than expensive but half empty, which might be the capacity which yields the most ticket revenue.
    • deleted 5y ago
      [deleted]
    • nojito 5y ago
      Scalping prevents actual price discovery from happening. So how can you say that "people are willing to pay a higher price"
• asdfasgasdgasdg 5y ago
  As is so often the case, your "is just" papers over a lot of detail. When a firm sells a good for less than the bid price of the buyer, the marginal value captured by that bidder is called consumer surplus. Firms do this for many reasons: they don't want the reputational hit of running an auction, they don't consider it worth the effort, they don't anticipate a need until after the revealed demand of the market is shown, and by that time it's too late to build an apparatus. Probably others I'm not thinking of. Scalpers capture this marginal value and in exchange provide the "service" of reallocating some of the goods to the buyers with the highest bid prices. (I put scare quotes around service here because I'm sure many consider it a pessimization.) If you're a wealthy person, scalpers may actually be good for you, because you don't have to compete with poorer people who have more time to refresh a webpage. You can just buy the good on eBay. On the other hand, it seems totally valid for the government to decide that it is in the best interests of the people that the consumer surplus in the system devolve to actual consumers.
  • AYBABTME 5y ago
    If someone like Shopify introduced an auction system that can be turned on/off from the click if a button, or automatically when inventory goes out too fast, that'd probably help a lot of online stores.
• mytailorisrich 5y ago
  I agree with you that scalping is a symptom of market inefficiency. But I think it occurs mostly when there are further considerations taken into account, e.g. public image and reputation. For instance everyone knows, including organisers, that some people would be willing to pay large sums for tickets to premium events (concerts, sport, etc) but selling tickets at such price would lead to a public outcry. We saw the reactions to Uber's surge pricing as well. It may also be a brand strategy to let products sell out and be reported as being resold at huge prices. It creates a buzz and scarcity that may increase demand further.
• WheatM 5y ago
  [flagged]
• blowski 5y ago
  There’s a risk that scalpers establish a short-term monopoly over a market. For example, say scalpers buy all of a particular model of remote control car - they can now dictate the selling price, without adding any value to the market. But of course, the opposite argument is that people will then buy competing remote control cars and the scalpers will have to reduce their prices. Thus they are merely being entrepreneurial and finding an opportunity for arbitrage. This is one of those timeless debates with no answers. I’m sure Ancient Egypt had scalpers, and people wanted to ban them.
• runnerup 5y ago
  Indeed. This is especially important because if, say, TSMC or Nvidia increase their MSRP's, then they go go re-invest that into additional capacity to solve the supply shortage. Instead, middlemen take the markup profits and have no ability to put that towards additional production. I do wonder if it's a bit of an backdoor anti-inflation deal thing: - TSMC/Nvidia boards don't want to raise prices because it might cause rank-and-file consumers to feel like inflation is higher, and there's perhaps fear it could lead to a cycle of increasing across-the-board inflation on wide basket of goods. - USA/etc offers TSMC/etc subsidies for building additional capacity to make up for the revenue/reinvestment shortfall on keeping artificially low MSRP's. And then this is a ham-handed attempt to exert some limit on any scalping operation getting "too large" and potentially drive consumer prices down a bit more until the additional capacity (funded by govt. subsidies instead of MSRP) finally comes online. Is that hypothesis/"mad ramblings" completely unreasonable? It might be. I just really feel that the producers should increase prices and reinvest in capacity, rather than allow middlemen to skim the arbitrage.
  • nradov 5y ago
    Chip manufacturers can't increase capacity any faster due to supply chain constraints. Raising prices wouldn't allow them to expand any faster. And most of their prices are locked in by long term production contracts anyway.
• rektide 5y ago
  This pure economist point of view feels so unwelcome & reductionist. That the market isn't taking every ounce of profit being viewed as inefficiency, this idea that prices must be as high as possible seems like a diseased view to me. Consumers should have access to things like GPUs at a rate the manufacturer is happy to charge. There's a net benefit to society when supply isn't maximally constrained & exploited. Recently, folks are wondering whether PC gaming is going to be able to survive, when even shitty ass lower-mid range graphics cards cost as much as a console. That would be horrificly sad for computing.
  • heyitsguay 5y ago
    Seriously. If you ever meet any of these people in real life, take their car keys and remind them the market dictates the price of all goods and the police are a statist intervention.
  • avalys 5y ago
    > Consumers should have access to things like GPUs at a rate the manufacturer is happy to charge. Okay, great, so you ban scalping bots. Now consumers can't buy GPUs because they're sold out, as opposed to because they're too expensive. (1) The problem is that the supply of GPUs is constrained and there are more consumers who want GPUs than there are GPUs to sell them. Banning scalping bots is not going to solve that problem. (1) Of course people can still resell for a profit on eBay, unless you decide to ban that too. Heck, why not just ban everything you don't like? Let's pass a law to ban poverty while we're at it. --- All that said, the act actually doesn't ban bots, it bans bots which circumvent protections that the seller put in place to block them. Which is fine by me, if a seller wants to put in a place a policy that says they will not sell to bots, I think it is fine for the government to help them enforce that policy.
    • notahacker 5y ago
      > Okay, great, so you ban scalping bots. Now consumers can't buy GPUs because they're sold out, as opposed to because they're too expensive. Scalping bots don't increase the supply of GPUs. In the scalper's absemce no more people than before will be unable to buy GPUs because of the shortage, it's just those that do manage to buy them will tend to get them earlier at a cheaper price.
• mr_toad 5y ago
  Scalping is usually a short-term monopoly based in a temporary shortage, and it has the same problems (arrogation of consumer surplus and deadweight loss). > Nintendo should be able to sell the NES Classic for 13k That’s a somewhat different issue, it’s what happens as the result of a legally sanctioned monopoly (copyright) that has been exploited far beyond any reasonable term. It’s still a monopoly and it’s still bad.
• fhood 5y ago
  What do you mean? Nintendo could sell the NES Classic for 13k if they wanted to, but nobody would buy it. Companies choose their pricing very carefully, and there are a whole lot more factors than max value on secondary market that go into it. Nvidia is well aware they aren't going to be able to keep up with demand, but if they raise their prices too much people will consider the cards poor value and won't purchase them. Think mac pro wheels. Scalpers operate on a different playing field, and are really just parasitic.