Lately, I've been trying to get my hands on a PlayStation 5. These are in pretty short supply in the UK these days – thanks to the chip shortage, and exacerbated by Ever Given, demand currently far outstrips supply. To get a PS5 from any retailer, you need to subscribe to and religiously follow stock alerts, read up on various site-specific tricks, and generally sink a whole lot of time and mental effort.

One thing that a lot of people believe makes this much harder is the presence of "scalpers": resellers who buy up large amounts of PS5 stock at every drop and sell it for large markups on eBay^[1]. Since these resellers, unlike most retail consumers, are trying to acquire many PS5s across multiple stock drops, they can invest in various tools (chiefly, various kinds of bots) to make them more effective at winning these drops. As a result, an unknown-but-probably-substantial proportion of the consoles available at each drop go to these resellers.

If you have any experience of interacting with humans, it will not surprise you that a lot of people are very angry about this. My natural libertarian-ish response to this is to say these people are being silly – that this is just the kind of thing that happens when retailers are foolishly prevented (by public opinion, if not by law) from charging the true market price. But I don't like feeling like a dogmatic libertarian, so I'd like to dig into this a little more.

Even in the complete absence of resellers, I'm pretty confident that getting ahold of a PS5 right now would still be a difficult and costly proposition, requiring large investments of time and mental effort. For those who are willing and able to pay the marked-up price, resellers are thus providing a valuable service, allowing these consumers to pay money to avoid these costs. Having spent a few fruitless hours trying to win PS5 stock drops, the idea of paying someone else to do this is pretty attractive to me, and I'm sure I'm not the only one.

The main counter to this is that, by buying up large amounts of PS5 stock at every drop, resellers are making things (even) harder for those who are not willing or able to pay the marked-up prices. If you have strong egalitarian instincts, this might be enough to condemn these resellers as harmful. But even assuming that this would be bad if it were true, I'm not sure it is true – at least if you consider a slightly longer timescale than a single drop.

My economics knowledge is pretty meagre, but here's an argument for why it might not be the case that resellers hurt less-wealthy consumers in the long run:

1. Unlike resellers, the great majority of retail consumers only want one PS5. Even those who want more than one (e.g. for birthday presents) probably don't want more than two or three. To a good approximation, then, every retail consumer who gets a PS5 removes themselves from the demand pool. From the perspective of someone trying to win a stock drop, everyone who gets a PS5 is one less person for you to compete with next time.
2. Resellers wouldn't be posting PS5s at such high prices on eBay if they didn't sell at those prices. Given the high demand, we can assume that the great majority of PS5s bought by resellers are resold to consumers (albeit perhaps with some delay). These consumers then remove themselves from the demand pool, as above.
3. If resellers didn't exist, most people who would buy a PS5 from a reseller would instead compete for stock drops, either directly or via some other indirect means. (I think this is the weakest premise of the three.)
4. Hence, considered over multiple drops, competing with resellers is unlikely to have more than a small effect on your expected time-to-PS5-acquisition.

Two obvious ways this argument would fail would be if (a) there is a large amount of leakage from reselling, with many PS5s on eBay never selling for some reason, or (b) the availability of quick-but-expensive PS5s on eBay draws in a lot of buyers who would otherwise be unwilling to compete in stock drops, but would instead wait until PS5s were readily available via retailers. (b) seems much more likely than (a) to me.

However, given my lack of economics knowledge I wouldn't be all that surprised if there were some much more important flaw in my argument above that I haven't noticed. So, I'd be interested in hearing arguments against it here.