3 ms·
It's worth observing that your CD example may be rational given that CDs are more liquid than train tickets. Train tickets are generally non-transferable so, a
by jordanb 17y ago
It's worth observing that your CD example may be rational given that CDs are more liquid than train tickets.
Train tickets are generally non-transferable so, absent a black market, they are not liquid at all. Buying a six month ticket is making a $1,000 investment in being in that situation for six months.
Maybe they'll lose the job in question, move, or need the $1,000 in cash for some emergency. Depending on how likely those possibilities are, the buyer is going to have a lesser or greater preference towards a more liquid place to put their money.
- patio11 17y agoI would agree absent for the unstated knowledge that everyone at my office is a Japanese salaryman and, as such, the most negative thing you can say about my job security is that I may lose my job if I die.
- nandemo 17y agoTrain tickets are generally non-transferable so, absent a black market, they are not liquid at all. Actually, the tickets are refundable. There are restrictions which vary according to each train company (you might have to pay a small fee, etc), but still the tickets aren't completely illiquid.
- DenisM 17y agoor need the $1,000 in cash for some emergency But that's exactly the point! If you are so poor you don't have the extra $1000 to carry you through you will have to pay more, just for being poor.