It's zero sum. The people who desperately needed hand sanitizer or toilet paper today had less money left to spend elsewhere, but overall averaged demand wasn't all that different. Traditional suppliers probably know that jacking the price of one item can lead to losses elsewhere.

Hoarders/scalpers are not aiding price discovery, they are manipulating the price by artificially changing supply or demand. They don't have to do so sustainably either.

And all of that is leaving aside that the goal of a society is to maintain the society over time and in aggregate, not to maximize value extracted from every individual transaction.

> Hoarders/scalpers are not aiding price discovery, they are manipulating the price by artificially changing supply or demand. They don't have to do so sustainably either.

one could reasonably argue otherwise. let's take the example of toilet paper in the early weeks of quarantine. with or without the action of scalpers, such a massive shift in demand was going to cause toilet paper to go out of stock regardless. without scalpers, you are shit out of luck when this happens (perhaps literally). with scalpers, you at least have the ability to buy it at an eye-watering price. even before you run out, knowing that you have to pay $20/roll is a strong signal that you ought to use one or two squares per wipe instead of 3+.

Hinges on what you believe would have happened to stock that scalpers bought, had they not done so. It may have left enough on the shelf for the would-be customers of scalpers to meet their needs. On the other hand, that leftover stock may have been obtained by panic buyers.

On a hunch I'd say a scalper would purchase more off the shelf than a panic buyer, because with the goal they have in mind they a) want a large quantity to resell to a large number of people and b) want to drain shelf stock to increase their odds of success.

that's why I used the toilet paper example. I don't think scalpers have enough storage space to clear an entire region's stockpile of tp. I did read a story of a guy who did exactly that with hand sanitizer, literally bought the entire supply from every store within 100 miles. that does change the analysis.

I'm definitely not advocating for hoarding or scalping, I'm just curious about what specifically the systemic inefficiencies are that prevent sellers from undercutting the hoarders and scalpers by raising prices on their own.

rightfully or not, raising prices in these situations is considered distasteful by most people. the long-term damage to the brand is probably not worth the short-term profits. retailers would rather just run out of stuff or limit customers to two boxes of pasta to maintain their image.

It happens in minor monopolies, which are exploitable best at small scale, like location or temporality. I can flip the latest Nintendo mini on eBay pretty easily.

However, I can’t imagine the trouble that Nintendo would get into if they sold the same device at different prices based on zip code.

Not to say that doesn’t happen, because that’s half the point behind custom phone contracts, where the price you pay for the device over time varies widely from person to person. Though, because it’s individualized, it’s very hard for consumers to compare one another’s prices and identify minor monopolies or price discrimination when it does occur.

I think GP is describing scalpers in the latter part of their comment. the fact that it can be profitable for some guy to buy up a hundred GPUs and sell them at a 50% markup until the fabs catch up does not necessarily make it a good idea for nvidia to do the same thing. it would likely create a lot of ill will for a comparatively small bump to their bottom line.

on the other hand, one could argue that this did happen in the aftermath of the crypto craze. in that time, gpus sold for well over MSRP (even second-hand) for a year or two. I don't think it's a coincidence that gpu pricing tiers jumped by a couple hundred dollars in the next generation (and again with the RTX 3090, although you could instead argue that's a price cut to the outgoing titan sku).