alt Hacker News> This is called a price ceiling
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?
Replies
> 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 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.
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.