Re:Amazon sellers marking products as collectible to get aro...
by joshuamorton on Friday May 29, 2020 @06:12PM
(#23356150)
> What it does do is provide incentives for rational behavior.
Yes, and when/if enough actors do act irrationally, the efficient allocation of resources breaks down.
> A sanitizer hoard only has value if it can be sold to people who use it. The hoarder would also know that supply will increase, and he'll have to sell it fast in order to realize a profit.
Only if individuals are acting rationally. If I am panicking due to a pandemic that I believe hand sanitizer will protect me from, I will be willing to purchase a lot for personal consumption. If enough people do this, it prevents others who have need from getting their own hand sanitizer.
That is not "where they are needed the most". A middle class family who can afford to stay home does not need hand sanitizer more than a frontline worker or a hospital, in fact it's likely better for that family if the frontline worker gets the sanitizer instead. But acting in a panic, and acting irrationally, one can purchase enough hand sanitizer that the price rises enough to prevent those with greater need from accessing it.
> Furthermore, the higher prices encourage only the best use of the sanitizers are made
Except they don't, as we just demonstrated. Hospitals and frontline workers are rationally the best places for a limited supply of hand sanitizer. Increasing the prices does not result in those people getting the hand sanitizer, but instead it results in wealthy individuals getting it.
Hospitals don't have the funding to compete on price with panicked upper class people who believe that hand sanitizer will save their lives. Purchasing quotas are a much better solution, since there is value in as many people as possible having some hand sanitizer for personal use. And if you institute quotas, you don't need to increase price to limit demand, so the only reason to increase price would be to profiteer.
Yes, and when/if enough actors do act irrationally, the efficient allocation of resources breaks down.
> A sanitizer hoard only has value if it can be sold to people who use it. The hoarder would also know that supply will increase, and he'll have to sell it fast in order to realize a profit.
Only if individuals are acting rationally. If I am panicking due to a pandemic that I believe hand sanitizer will protect me from, I will be willing to purchase a lot for personal consumption. If enough people do this, it prevents others who have need from getting their own hand sanitizer.
That is not "where they are needed the most". A middle class family who can afford to stay home does not need hand sanitizer more than a frontline worker or a hospital, in fact it's likely better for that family if the frontline worker gets the sanitizer instead. But acting in a panic, and acting irrationally, one can purchase enough hand sanitizer that the price rises enough to prevent those with greater need from accessing it.
> Furthermore, the higher prices encourage only the best use of the sanitizers are made
Except they don't, as we just demonstrated. Hospitals and frontline workers are rationally the best places for a limited supply of hand sanitizer. Increasing the prices does not result in those people getting the hand sanitizer, but instead it results in wealthy individuals getting it.
Hospitals don't have the funding to compete on price with panicked upper class people who believe that hand sanitizer will save their lives. Purchasing quotas are a much better solution, since there is value in as many people as possible having some hand sanitizer for personal use. And if you institute quotas, you don't need to increase price to limit demand, so the only reason to increase price would be to profiteer.