I admit I'm pretty unsure how my beliefs change as the % of PS5s grabbed by scalpers changes.
Like, the more PS5s scalpers get, the higher the time cost for anyone trying to buy at RRP in the short term, but the faster the scalpers will run through the population of people willing to pay high markups?
This is where I realise that I don't know how scalpers actually react to that situation – maybe for some reason they just drip-feed their PS5 hauls? Maybe (probably) they're more patient than most of the people trying to win drops, so they sell off their PS5s more slowly (and so remove competitors from the pool at a lower rate than otherwise would be the case)?
I think there's a pretty strong chance I'm just misunderstanding something here.
As I said in my reply to Dave Orr above, I now suspect that my opinion on the goodness or badness here is probably dominated by the net effect on the deadweight loss of time. (I'm not sure how much I think this should be weighted by the economic and/or social value of each person's time.)
So my main questions now are (1) what is the net effect, and (2) what would the net effect be, if people were more rational about how much they value their time? (I'm also not sure how much the answer to (2) would change my view.)
It sounds like you think the answer to (1) is positive?
Sure, it might not be textbook rent-seeking, but it's pretty close.
One important difference from classic pro-price-gouging arguments here, that I didn't really crystallise until now, is that the scalpers aren't really doing anything (AFAIK) to increase supply. So we lack the cutting-down-logs-with-chainsaws angle.
Just to check I understand this, this is roughly the same objection as my (b) above, right?
If so, I think this is plausible, though I'm not sure how bad it is. I think the overall badness would mainly depend on the total effect on the deadweight loss of wasted time.
(I also think that most people who can afford a PS5 should probably value their time much more than they do, but that's a different story.)
There's currently a global shortage in computer chips, which limits the amount of PS5s that can be manufactured. Presumably Sony is churning them out as fast as it can (see e.g. sxae's comment elsewhere) but that is slower than everyone would like.
The recent extreme shortage was also caused in part by trade disruptions due to the Ever Given crisis, but I assume that'll work its way out of the system fairly soon.
Thanks for this. I agree that it's plausibly rational of Sony not to raise the RRP here.
Presumably the retailers would love to increase the price here, but they ain't the ones setting the RRP...
it's possible they're enjoying a situation where demand is so high that there's arbitrage to be done
Could you clarify what you mean by arbitrage here? What arbitrage is available to Sony in this situation?
Sure, I agree that reselling will become less and less important as supply increases – presumably the prices of PS5s on eBay will fall as supply increases, until it's close enough to the RRP that reselling is no longer profitable.
In fact, my argument above depends, among other things, on demand increasing much more slowly than supply.
What I'm interested in here is whether, given the current (temporary) shortage, these kinds of reselling practices are actually (temporarily) harmful.
(Insofar as upgrading your gaming console later than you wanted is harmful.)
Yeah, it seems extremely easy to incorporate this into a pro-school model, and I'm confused as to why someone might think it isn't.
Like, if you think school is actually good (on average), of course you think that finding a way to let kids not miss school is plausibly good.
Presumably the fact that kids miss out on the joy of snow is a cost, which is why I only said "plausibly good" above, but now we're arguing about the optimal trade-off, at which point we're firmly in Policy Debates Should Not Appear One-Sided territory.
Yeah, I can imagine this being useful. One does sometimes encounter cases where unclear preferences lead to accidentally skipping endorsedly-best tasks.
I haven't used it for that, but it sounds like a good application; and in this case, you only need to select one thing, so you can do it memorylessly (just keep your finger on the active dish).
For what it's worth, I do think this is probably a serious enough mistake to go on this page.