5 ms·

The current prices are a response to future stock, not current. It's 100% retailers price gouging with their current stock that they got for cheap because they

by nodja 10mo ago

The current prices are a response to future stock, not current. It's 100% retailers price gouging with their current stock that they got for cheap because they know there will be limited stock in the near future. Asian retailers may be more honest and keep their margins the same, but will catch up in a month or two.

zozbot234 10mo ago
It's just surge pricing to manage demand, not "price gouging". Being able to buy RAM at high prices is a lot better than being unable to source it at all because everyone else is panic-hoarding.
- ed 10mo ago
  We don’t really know whether that’s true, since it’s hard to prove a negative (i.e., suppliers aren’t colluding). But given their history of price fixing it may be worth looking into.
- CraigJPerry 10mo ago
  It's speculative price gouging. Calling it "surge pricing" doesn't stop erosion of consumer trust in the market. Watch now as more people more readily jump to price fixing conclusions. Not helped by the inevitable further increase in speculation through feedback loops and the resultant volatility. First come first served is a better principle than "surge pricing". A lottery is a better principle than "surge pricing". In the case that someone over purchased, they're free to dispose via secondary market if the value to them is lower than the out of stock price. I.e. decentralised pricing (and profits). Secondary market sales are just more efficient, they occur at negotiated prices that reflect true individual valuation, not the retailer's speculation. I'd rather reward diligence and personal responsibility - if you monitor market trends, anticipate needs, and act quickly, such as buying RAM ahead of a known upcoming supply crunch, you're rewarded with access at the original price. Rather than passive reliance on wealth to solve problems. First come first served values effort and foresight. Scarcity is managed through time and effort rather than money.
  - energy123 10mo ago
    > First come first served is a better principle than "surge pricing". This is called a price ceiling, and it's a bad idea with a track record of failure and significant harm. I'd rather pay extra and get what I need with 100% chance than get what I need cheaply with 5% chance and otherwise be forced to go without or buy from scalpers for the same price I would have paid anyways. This is the purpose of prices. So the people who really need it can buy it, and those who are borderline about the purchase decide to opt out. If you're concerned with wealth inequality or one large buyer cornering the market, there are better ways to address those problem than prices ceilings.
    - CraigJPerry 10mo ago
      > This is called a price ceiling The act of eliminating surge pricing is not a price ceiling. That's a different thing. That requires more than simply swapping surge pricing with first come first served. You've created a strawman. > I'd rather pay extra and get what I need with 100% chance False dichotomy. Neither approach increases supply. Of course according to economists who can hand wave away bullwhip effects with simple "this model assumes X" statements that go unquestioned in the conversations which cite the findings of the given model but i digress. According to economists, both approaches do increase supply, the theory goes that the price gouging retailer invests in more factory capacity. Or the factory owner buoyed by vibrant secondary market activity views increased production investment as a safe bet. Maybe there's some truth in the latter... > If you're concerned with wealth inequality I'm concerned with lazy financial engineering over hard work. Why should the scrappy but innovative startup be excluded from resources over the sclerotic incumbent with a deeper wallet?
      - zozbot234 10mo ago
        The bullwhip effect is the whole reason why retailers may want to hold greater product stock in the first place; to absorb transient demand fluctuations and not have to pass them on in full to the supplier. And a "scrappy but innovative" startup has an obvious interest in being able to source the DRAM or other goods they require, even at higher prices.
- franga2000 10mo ago
  Is it better? As with all price gouging, better for those who can afford it, sure, but not for those who can't. The proper way to combat scalping is to implement fair allocation methods (for a start purchase quantity limits) and punish people for scalping. Look at how most places handled war-time gasoline shortages. Rationing coupons, purchase limits, demand leveling (like the odd-even system), price or profit controls, strict prosecution of scalpers and price gougers. And it's not like only the communists did this - even the US had most if not all of these things. And it worked far better than the shit that happened during the pandemic shortages. Governments used to know how to govern.
  - zozbot234 10mo ago
    If you want to be "fair" for a necessity such as gasoline, you can have tradable rationing coupons. That way you are rewarded if you buy and use less gasoline, but the excess windfall due to the shortage is still transfered to you and away from the supplier. But even this assumes that gasoline is in fixed supply and there is no way of increasing its total production by paying more, which is not a very good assumption.
    - franga2000 10mo ago
      In a time of shortage, throwing more money at the problem usually won't increase supply. A shortage necessarily means that if you make more of something, you're guaranteed to sell it basically instantly, so there's already an incentive to increase production. And it's not like the higher prices mean more money goes to the producers so they can invest in more production capacity. The price increase is spread out between every middleman in the chain untils there's almost nothing left. This could work only if the producers themselves are the ones raising prices, but then everyone else would still add their own cut, leading to even crazier price hikes, and also it's unlikely that extra profit would go to much more than lining the owners' pockets. Additionally, demand spikes usually don't last, so any new production capacity you build will be a liability later, after the market settles down.
      - kortilla 10mo ago
- Sohcahtoa82 10mo ago
  > It's just surge pricing to manage demand, not "price gouging". This carries the same energy as company leadership insisting that a RIF is not a layoff.
  - kortilla 10mo ago
    Price gouging has a specific meaning. It’s when costs are raised rapidly only because people are desperate and have no other choice. (e.g. water after a disaster) Retailers raising prices in reaction to an incoming event that will take supply away from everyone is not that.
Aurornis 10mo ago
> It's 100% retailers price gouging with their current stock that they got for cheap The retail price of a product is a function of the market rate at the intersection of supply and demand. The price paid for inventory on the shelf doesn’t matter. It works both ways. If retailers bought a lot of RAM at high prices and then the market suddenly dropped, they could have to sell it at a loss. Some people get irrationally angry at this, but you do it too. If you bought a house for $500K and the market went up such that it was worth $700K, you wouldn’t think it was “price gouging” to list it at market rate. You’re just trading an asset for cash at the current price. The price you bought it at is irrelevant to the price you’re going to sell it for.
- baq 10mo ago
  technically the house analogy isn't that good because there are lots of people who won't sell below what they bought for, even if there are no buyers at this price anymore. the house eventually sells if the seller is forced to sell, but price in such cases isn't necessarily 'correct' either. more liquid markets make better examples.
  - deleted 10mo ago
    [deleted]
  - Aurornis 10mo ago
    > technically the house analogy isn't that good because there are lots of people who won't sell below what they bought for Just ignore the downside part of the house analogy because it doesn’t apply to this current DRAM situation where prices went up. The key point is that if you buy something and its value goes up, you’re not going to offer it for sale at the same price you paid for it. You’re going to sell it at market rate. Everyone does this, including retailers. It elicits angry cries of “gouging” from people who want to believe retailers are the cause of the high prices and be angry at them, but the market is big. It’s supply and demand.

by nodja 10mo ago

zozbot234 10mo ago

It's just surge pricing to manage demand, not "price gouging". Being able to buy RAM at high prices is a lot better than being unable to source it at all because everyone else is panic-hoarding.

ed 10mo ago
We don’t really know whether that’s true, since it’s hard to prove a negative (i.e., suppliers aren’t colluding). But given their history of price fixing it may be worth looking into.
CraigJPerry 10mo ago
It's speculative price gouging. Calling it "surge pricing" doesn't stop erosion of consumer trust in the market. Watch now as more people more readily jump to price fixing conclusions. Not helped by the inevitable further increase in speculation through feedback loops and the resultant volatility. First come first served is a better principle than "surge pricing". A lottery is a better principle than "surge pricing". In the case that someone over purchased, they're free to dispose via secondary market if the value to them is lower than the out of stock price. I.e. decentralised pricing (and profits). Secondary market sales are just more efficient, they occur at negotiated prices that reflect true individual valuation, not the retailer's speculation. I'd rather reward diligence and personal responsibility - if you monitor market trends, anticipate needs, and act quickly, such as buying RAM ahead of a known upcoming supply crunch, you're rewarded with access at the original price. Rather than passive reliance on wealth to solve problems. First come first served values effort and foresight. Scarcity is managed through time and effort rather than money.
- energy123 10mo ago
  > First come first served is a better principle than "surge pricing". This is called a price ceiling, and it's a bad idea with a track record of failure and significant harm. I'd rather pay extra and get what I need with 100% chance than get what I need cheaply with 5% chance and otherwise be forced to go without or buy from scalpers for the same price I would have paid anyways. This is the purpose of prices. So the people who really need it can buy it, and those who are borderline about the purchase decide to opt out. If you're concerned with wealth inequality or one large buyer cornering the market, there are better ways to address those problem than prices ceilings.
  - CraigJPerry 10mo ago
    > This is called a price ceiling The act of eliminating surge pricing is not a price ceiling. That's a different thing. That requires more than simply swapping surge pricing with first come first served. You've created a strawman. > I'd rather pay extra and get what I need with 100% chance False dichotomy. Neither approach increases supply. Of course according to economists who can hand wave away bullwhip effects with simple "this model assumes X" statements that go unquestioned in the conversations which cite the findings of the given model but i digress. According to economists, both approaches do increase supply, the theory goes that the price gouging retailer invests in more factory capacity. Or the factory owner buoyed by vibrant secondary market activity views increased production investment as a safe bet. Maybe there's some truth in the latter... > If you're concerned with wealth inequality I'm concerned with lazy financial engineering over hard work. Why should the scrappy but innovative startup be excluded from resources over the sclerotic incumbent with a deeper wallet?
    - zozbot234 10mo ago
      The bullwhip effect is the whole reason why retailers may want to hold greater product stock in the first place; to absorb transient demand fluctuations and not have to pass them on in full to the supplier. And a "scrappy but innovative" startup has an obvious interest in being able to source the DRAM or other goods they require, even at higher prices.
franga2000 10mo ago
Is it better? As with all price gouging, better for those who can afford it, sure, but not for those who can't. The proper way to combat scalping is to implement fair allocation methods (for a start purchase quantity limits) and punish people for scalping. Look at how most places handled war-time gasoline shortages. Rationing coupons, purchase limits, demand leveling (like the odd-even system), price or profit controls, strict prosecution of scalpers and price gougers. And it's not like only the communists did this - even the US had most if not all of these things. And it worked far better than the shit that happened during the pandemic shortages. Governments used to know how to govern.
- zozbot234 10mo ago
  If you want to be "fair" for a necessity such as gasoline, you can have tradable rationing coupons. That way you are rewarded if you buy and use less gasoline, but the excess windfall due to the shortage is still transfered to you and away from the supplier. But even this assumes that gasoline is in fixed supply and there is no way of increasing its total production by paying more, which is not a very good assumption.
  - franga2000 10mo ago
    In a time of shortage, throwing more money at the problem usually won't increase supply. A shortage necessarily means that if you make more of something, you're guaranteed to sell it basically instantly, so there's already an incentive to increase production. And it's not like the higher prices mean more money goes to the producers so they can invest in more production capacity. The price increase is spread out between every middleman in the chain untils there's almost nothing left. This could work only if the producers themselves are the ones raising prices, but then everyone else would still add their own cut, leading to even crazier price hikes, and also it's unlikely that extra profit would go to much more than lining the owners' pockets. Additionally, demand spikes usually don't last, so any new production capacity you build will be a liability later, after the market settles down.
    - kortilla 10mo ago
Sohcahtoa82 10mo ago
> It's just surge pricing to manage demand, not "price gouging". This carries the same energy as company leadership insisting that a RIF is not a layoff.
- kortilla 10mo ago
  Price gouging has a specific meaning. It’s when costs are raised rapidly only because people are desperate and have no other choice. (e.g. water after a disaster) Retailers raising prices in reaction to an incoming event that will take supply away from everyone is not that.

Aurornis 10mo ago

> It's 100% retailers price gouging with their current stock that they got for cheap The retail price of a product is a function of the market rate at the intersection of supply and demand. The price paid for inventory on the shelf doesn’t matter. It works both ways. If retailers bought a lot of RAM at high prices and then the market suddenly dropped, they could have to sell it at a loss. Some people get irrationally angry at this, but you do it too. If you bought a house for $500K and the market went up such that it was worth $700K, you wouldn’t think it was “price gouging” to list it at market rate. You’re just trading an asset for cash at the current price. The price you bought it at is irrelevant to the price you’re going to sell it for.

baq 10mo ago
technically the house analogy isn't that good because there are lots of people who won't sell below what they bought for, even if there are no buyers at this price anymore. the house eventually sells if the seller is forced to sell, but price in such cases isn't necessarily 'correct' either. more liquid markets make better examples.
- deleted 10mo ago
  [deleted]
- Aurornis 10mo ago
  > technically the house analogy isn't that good because there are lots of people who won't sell below what they bought for Just ignore the downside part of the house analogy because it doesn’t apply to this current DRAM situation where prices went up. The key point is that if you buy something and its value goes up, you’re not going to offer it for sale at the same price you paid for it. You’re going to sell it at market rate. Everyone does this, including retailers. It elicits angry cries of “gouging” from people who want to believe retailers are the cause of the high prices and be angry at them, but the market is big. It’s supply and demand.