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AlotOfReading • yesterday at 6:45 PM • 1 reply • view on HN

Because if Bill Gates is paying $150k for bananas, my expected value as a shopkeeper is maximized by not selling you my limited stock of bananas at $0.50/each and instead waiting for the remote possibility that Bill Gates walks into the store instead. It's not socially optimal for bananas to rot on store shelves when there are willing customers at a lower price point, but this happens all the time in dynamically priced markets.

This comes up frequently in housing, for example.


Replies

kelseyfrog • yesterday at 7:00 PM

Everyone has a different risk/reward tolerance. If your strategy involves risking banana rot to snag that bag, then more power to you. The market will find an equilibrium.

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