> First come first served is a better principle than "surge pricing".
This is called a price ceiling, and it's a bad idea with a track record of failure and significant harm.
I'd rather pay extra and get what I need with 100% chance than get what I need cheaply with 5% chance and otherwise be forced to go without or buy from scalpers for the same price I would have paid anyways. This is the purpose of prices. So the people who really need it can buy it, and those who are borderline about the purchase decide to opt out.
If you're concerned with wealth inequality or one large buyer cornering the market, there are better ways to address those problem than prices ceilings.
The act of eliminating surge pricing is not a price ceiling. That's a different thing. That requires more than simply swapping surge pricing with first come first served. You've created a strawman.
> I'd rather pay extra and get what I need with 100% chance
False dichotomy. Neither approach increases supply. Of course according to economists who can hand wave away bullwhip effects with simple "this model assumes X" statements that go unquestioned in the conversations which cite the findings of the given model but i digress. According to economists, both approaches do increase supply, the theory goes that the price gouging retailer invests in more factory capacity. Or the factory owner buoyed by vibrant secondary market activity views increased production investment as a safe bet. Maybe there's some truth in the latter...
> If you're concerned with wealth inequality
I'm concerned with lazy financial engineering over hard work. Why should the scrappy but innovative startup be excluded from resources over the sclerotic incumbent with a deeper wallet?
> The act of eliminating surge pricing is not a price ceiling. That's a different thing. That requires more than simply swapping surge pricing with first come first served. You've created a strawman.
What is it then? If you allow the price to increase, there is no need to enforce a different rationing mechanism. The only reason to think of implementing the alternate rationing mechanism is if the good isn't being rationed. If you insist on the previous, lower price, then that is a price ceiling in so many words, with the consequence of needing your rationing mechanism. If you allow a higher price, then your alternate mechanism is unnecessary.
The bullwhip effect is the whole reason why retailers may want to hold greater product stock in the first place; to absorb transient demand fluctuations and not have to pass them on in full to the supplier.
And a "scrappy but innovative" startup has an obvious interest in being able to source the DRAM or other goods they require, even at higher prices.
> The act of eliminating surge pricing is not a price ceiling.
If you force companies to price products lower than what they want, then you have a price ceiling by definition.
> Neither approach increases supply.
I didn't mention or allude to supply at all, although it's true that price ceilings also decrease supply (less so if there is monopoly or collusion, but they still do).
I was talking about resource allocation. The person who needs a new system because their previous computer broke will be willing to pay the extra money, but the person who already has a DDR4 system with a 5950x that runs their games well enough will be content to hold off on their AM5 upgrade to DDR5 because the marginal improvement isn't worth the extra $400.
If you have a price ceiling like what you proposed, the person with the DDR4 system may buy the DDR5 that they don't really need 1 day earlier than the person who actually needs the DDR5, creating a misallocation of resources.
(that's an example of the more abstract principle at play).
Theoretical arguments aren't even needed here. The empirical history of price ceilings is there for you to google.
If you didn't know that what you were proposing is a price ceiling, and you thought that I was talking about supply instead of resource allocation, then I mean this with no offence intended but you should study elementary economics before forming confident opinions on the subject. Society is in a vulnerable point with cost of living pressure and we don't need more energy behind these harmful populist ideas.
Price ceiling definition: a government-imposed legal maximum price
My original comment: First come first served is a better <snipped for brevity>
This is not a legal maximum price, this is a legal maximum in the derivative of price.
> I didn't mention or allude to supply at all
>> get what I need with 100% chance than get what I need cheaply with 5% chance
How do you square these two statements? One claims 100% supply certainty when no such thing exists in this context. Without making certain assumptions (unstated, but ludicrous, assumptions are rife in economics discourse), you can't state much of value about which buyer will get the goods in the surge pricing model, you especially cannot say that the buyer with the larger wallet will always win. Think for a second what assumptions you've made to this point in the conversation - you're still down the rabbit hole of price ceilings in the comment chain thus far.
>> The empirical history of price ceilings is there
Not disputed but as per your call out of definition above, not relevant.
To make the point further - the name for a limit on rate of change of price is not a price ceiling, anymore than the 0-60 time of a car is its top speed limit.
>> you thought that I was talking about supply instead of resource allocation
My challenge to you is to name the assumptions you've identified in your reasoning around resource allocation. I'm confident i can point out the deficiencies in your model because that is the nature of models.
>> you should study elementary economics
That's a great idea, a really good follow on from that is to identify logical fallacies you discover i. that process, especially those so accepted that it's not a stretch to say they are underpinning the discipline. A good example of that would be the conjectural origin theory of money but i digress.
> My original comment: First come first served is a better
Retailers are first come first serve. The first customer to buy product gets the next unit of inventory.
If you’re trying to argue that retailers need to be forced to set a retail price for each unit of in-stock inventory and then be forced to sell each unit at that price later no matter what the market rate does in the mean time, that’s an awful idea.
I’m sure you don’t mind when retailers decide to give discounts or put things on sale, do you? If the market price drops, they reduce selling price. Same thing when market rate goes up.
Forcing retailers to price things how you want doesn’t change supply and demand. It would only force retailers to add extra margin into their prices to account for the added risk of the government forcing their hand in sale prices.
This is called a price ceiling, and it's a bad idea with a track record of failure and significant harm.
I'd rather pay extra and get what I need with 100% chance than get what I need cheaply with 5% chance and otherwise be forced to go without or buy from scalpers for the same price I would have paid anyways. This is the purpose of prices. So the people who really need it can buy it, and those who are borderline about the purchase decide to opt out.
If you're concerned with wealth inequality or one large buyer cornering the market, there are better ways to address those problem than prices ceilings.