If you buy from a retailer, you are paying in time as well as money. This is a good deal for people who have relatively more time than money. If you buy from a scalper, you are substituting money for the time component, which is good for people who value their time more highly.
Therefore scalpers are shifting supply from people who have more time to people who have more money. This is likely moving supply from middle class people to rich(er) people.
If you’re in the set of people with more time than money, which is most people, I can see being upset. It arguably substantially increases time to PS5 because you weren’t previously competing with someone like me who doesn’t have time to spare to track inventory and call around, but has plenty of money. It’s removing consumers from a pool that they weren’t in yet.
The key difference is that time that is spent on a transaction is burned and not transferred. Money that is spent is transferred and the value of it preserved. An economy that runs on search-costs is just wasting a bunch of its capacity on stuff that nobody cares about.
Or in other words: A monetary transaction consists of trade where both parties get what they want. A transaction that is mostly paid in search costs doesn’t get the counterparty anything.
True, but the extra money goes to the scalper to pay for the scalpers time. The moment the makers started selling the PS5 too cheep, they were destroying value in search costs. Scalpers don’t change that.
Therefore scalpers are shifting supply from people who have more time to people who have more money. This is likely moving supply from middle class people to rich(er) people.
The apparently irrational behaviour of selling at below market price is sometimes explicable by the seller wanting to reach a certain market: ticket scalping exists because tickets are sold below market price because bands don’t want audiences of money rich, time poor businesspeople.
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.)
If you buy from a retailer, you are paying in time as well as money. This is a good deal for people who have relatively more time than money. If you buy from a scalper, you are substituting money for the time component, which is good for people who value their time more highly.
Therefore scalpers are shifting supply from people who have more time to people who have more money. This is likely moving supply from middle class people to rich(er) people.
If you’re in the set of people with more time than money, which is most people, I can see being upset. It arguably substantially increases time to PS5 because you weren’t previously competing with someone like me who doesn’t have time to spare to track inventory and call around, but has plenty of money. It’s removing consumers from a pool that they weren’t in yet.
The key difference is that time that is spent on a transaction is burned and not transferred. Money that is spent is transferred and the value of it preserved. An economy that runs on search-costs is just wasting a bunch of its capacity on stuff that nobody cares about.
Or in other words: A monetary transaction consists of trade where both parties get what they want. A transaction that is mostly paid in search costs doesn’t get the counterparty anything.
True, but the extra money goes to the scalper to pay for the scalpers time. The moment the makers started selling the PS5 too cheep, they were destroying value in search costs. Scalpers don’t change that.
My guess is overall scalpers spend a lot less time buying them, though definitely not 0 either. So I do think scalpers drive total search costs down.
The apparently irrational behaviour of selling at below market price is sometimes explicable by the seller wanting to reach a certain market: ticket scalping exists because tickets are sold below market price because bands don’t want audiences of money rich, time poor businesspeople.
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.)