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So Nike arbitrarily limit the availability of a shoe. People for 'reasons' want to buy the shoe because of limited availability. People are willing to pay more

So Nike arbitrarily limit the availability of a shoe. People for 'reasons' want to buy the shoe because of limited availability. People are willing to pay more than what Nike is charging. 3rd parties come in to capture that wasted value. Nike wants to stop those 3rd parties for 'reasons'. There seems to be a lot wrong with this situation. A group using free market, capitalist tools in a free market capitalist country seems the least wrong part.

gnomewascool 4y ago
> 3rd parties come in to capture that wasted value. The value isn't wasted — it's consumer surplus.
wizzwizz4 4y ago
> 3rd parties come in to capture that wasted value. That value would otherwise have gone to the people. If all value is captured in this way, the marginal benefit of making a purchase becomes very, very low, and the stuff we actually care about (standards of living, happiness, liberty) become decoupled with economic metrics. This is one of the situations where lotteries are fairer than auctions.
- benj111 4y ago
  Ok. "3rd parties come in to capture the value that Nike otherwise left on the table" I disagree that all value would be gone though. People value things differently, the 'scalpers' are a mechanism to get the goods to those who value it most highly. I personally don't value these trainers for what Nike is asking, so I don't buy them. Should Nike be required to sell them to me for what I value them at? Or should people be able to set their own price, and others buy if that price is worth it to them? If you actually cared about happiness, liberty, etc, I don't see how a pair of trainers, expensive of otherwise is going to change that, but if it does become an issue, just don't by the sodding trainers then! I don't see why a lottery is 'fairer'. the shortage is entirely synthetic, created by Nike. I'm not big on adding morality into business transactions, but all this stems directly from Nike's decision to create scarcity. The 'fairest' thing would be for Nike to satisfy demand. 'scalpers' are a just symptom of that. I don't get why 'scalpers' are only deemed to be a problem when the scarcity in question is synthetic. If there's a corn shortage are farmers scalping? Are oil traders scalping when the price goes up? What about when the price of $stock goes up? Are the sellers scalpers? This is how free markets work. You could at least make a moral case for the price of corn being socially bad, you can't make that case for trainers or gig tickets or whatever. The other obvious solution is for another company to come in and solve the supply constraint that nike created. Although that too is also apparently wrong. If I bought some 'Niko' trainers from the local market, who is being harmed here? I'm not being misled, Nike aren't losing sales, so why?
  - franga2000 4y ago
    1. "those who value it most highly" is a dream of economists that has never ever been true. Personal value is relative to wealth and income. I might value something at one full month's salary, but an average CEO could outbid me with a few work days at most. 2. "prices go up when demand is high" makes sense to incentivize more production and reward those that produce thing we need the most. A farmer getting more for their corn during a shortage makes sense, because we'd be hungry if it weren't for them. A scalper, on the other hand, does not create any value. Neither does a stock trader when they buy low and sell high for that matter. Even artificial scarcity of luxury items can be interpreted as creating some value - owning a limited edition shoe that they can brag about to their friends is valuable to some people. But buying something before others get to it, just to immediately sell it for a much higher price is just exploitation.
    - benj111 4y ago
      Re 1, have you got a better plan? There's communism, are you suggesting that? >2. "prices go up when demand is high" makes sense to incentivize more production and reward those that produce thing we need the most Precisely, so why isn't Nike producing more? That is the issue. Again, scalpers are a symptom. >A farmer getting more for their corn during a shortage makes sense, because we'd be hungry if it weren't for them. One doesn't follow the other. If a farmer gets £1 a tonne one year, why does it mean that them getting £10 a tonne the next mean that people won't go hungry. If there's a corn shortage, that implies there isn't enough, so people are going hungry. Further this seems to verging on a moral argument. If we go hungry if it isn't for farmers then that implies that the state should be stepping in to control their excesses, setting the price at £1 a tonne. >Even artificial scarcity of luxury items can be interpreted as creating some value And so can buying a good and selling it on for a higher price. Why does one person have the right to brag about owning a shoe, and not another, who just so happens to be willing to pay a higher price? Why is artificial scarcity acceptable, but creating a functional open market out of that not? And a stock trader does create value. If a person can't buy stock and sell it on for a higher price, that stock is worth less, which means during an IPO a company can raise less money. It's not even clear to me if you could have PLCs at all, because eventually everyone dies, what happens to a company who is owned by a dead person(s) does it get taken over by the state? If we were talking about actual necessities then I'd agree with you, although my solution would be to have Nike produce more, not hold people to ransom. But for trainers, a specific brand and model, let the free market function, it's the best we've got.

gnomewascool 4y ago

> 3rd parties come in to capture that wasted value. The value isn't wasted — it's consumer surplus.

wizzwizz4 4y ago

> 3rd parties come in to capture that wasted value. That value would otherwise have gone to the people. If all value is captured in this way, the marginal benefit of making a purchase becomes very, very low, and the stuff we actually care about (standards of living, happiness, liberty) become decoupled with economic metrics. This is one of the situations where lotteries are fairer than auctions.

benj111 4y ago
Ok. "3rd parties come in to capture the value that Nike otherwise left on the table" I disagree that all value would be gone though. People value things differently, the 'scalpers' are a mechanism to get the goods to those who value it most highly. I personally don't value these trainers for what Nike is asking, so I don't buy them. Should Nike be required to sell them to me for what I value them at? Or should people be able to set their own price, and others buy if that price is worth it to them? If you actually cared about happiness, liberty, etc, I don't see how a pair of trainers, expensive of otherwise is going to change that, but if it does become an issue, just don't by the sodding trainers then! I don't see why a lottery is 'fairer'. the shortage is entirely synthetic, created by Nike. I'm not big on adding morality into business transactions, but all this stems directly from Nike's decision to create scarcity. The 'fairest' thing would be for Nike to satisfy demand. 'scalpers' are a just symptom of that. I don't get why 'scalpers' are only deemed to be a problem when the scarcity in question is synthetic. If there's a corn shortage are farmers scalping? Are oil traders scalping when the price goes up? What about when the price of $stock goes up? Are the sellers scalpers? This is how free markets work. You could at least make a moral case for the price of corn being socially bad, you can't make that case for trainers or gig tickets or whatever. The other obvious solution is for another company to come in and solve the supply constraint that nike created. Although that too is also apparently wrong. If I bought some 'Niko' trainers from the local market, who is being harmed here? I'm not being misled, Nike aren't losing sales, so why?
- franga2000 4y ago
  1. "those who value it most highly" is a dream of economists that has never ever been true. Personal value is relative to wealth and income. I might value something at one full month's salary, but an average CEO could outbid me with a few work days at most. 2. "prices go up when demand is high" makes sense to incentivize more production and reward those that produce thing we need the most. A farmer getting more for their corn during a shortage makes sense, because we'd be hungry if it weren't for them. A scalper, on the other hand, does not create any value. Neither does a stock trader when they buy low and sell high for that matter. Even artificial scarcity of luxury items can be interpreted as creating some value - owning a limited edition shoe that they can brag about to their friends is valuable to some people. But buying something before others get to it, just to immediately sell it for a much higher price is just exploitation.
  - benj111 4y ago
    Re 1, have you got a better plan? There's communism, are you suggesting that? >2. "prices go up when demand is high" makes sense to incentivize more production and reward those that produce thing we need the most Precisely, so why isn't Nike producing more? That is the issue. Again, scalpers are a symptom. >A farmer getting more for their corn during a shortage makes sense, because we'd be hungry if it weren't for them. One doesn't follow the other. If a farmer gets £1 a tonne one year, why does it mean that them getting £10 a tonne the next mean that people won't go hungry. If there's a corn shortage, that implies there isn't enough, so people are going hungry. Further this seems to verging on a moral argument. If we go hungry if it isn't for farmers then that implies that the state should be stepping in to control their excesses, setting the price at £1 a tonne. >Even artificial scarcity of luxury items can be interpreted as creating some value And so can buying a good and selling it on for a higher price. Why does one person have the right to brag about owning a shoe, and not another, who just so happens to be willing to pay a higher price? Why is artificial scarcity acceptable, but creating a functional open market out of that not? And a stock trader does create value. If a person can't buy stock and sell it on for a higher price, that stock is worth less, which means during an IPO a company can raise less money. It's not even clear to me if you could have PLCs at all, because eventually everyone dies, what happens to a company who is owned by a dead person(s) does it get taken over by the state? If we were talking about actual necessities then I'd agree with you, although my solution would be to have Nike produce more, not hold people to ransom. But for trainers, a specific brand and model, let the free market function, it's the best we've got.