[savanaly]

I feel like if you truly groked capitalism, you would be able to point out lots of its flaws, but also to realize that scalping is definitely not one of them.

With supply limited like this, the optimal social outcome is for the X units produced to go to the X people in the world who would value them most, in other words the people who would be willing to pay the most (only exception I can think of to this is if someone values it at V dollars and only has a net worth of W dollars where W < V, but for the sums we're talking about with the NES I think almost everyone either has or can scrounge up V).

In the final accounting with reselling on amazon, the goods end up where they are most highly valued. Sure, if we held a lottery to see who gets to buy the NESs at the sticker price rather than auctioning them, the people winning the lottery would be more happy than the people who end up winning the auction. But as a whole, society would be impoverished since it's an inefficient distribution (no room to prove it in a HN post, but it's not too hard to work out on paper when tallying up the welfare of nintendo, the scalpers and all the people who get to buy the NES under one scenario or the other).

[typicalrunt]

I do understand capitalism, the point I made was that sometimes I don't have to like it. Scalping included.

I don't need to prove my knowledge to you by pointing out lots of capitalism's flaws. Instead of reading my comment carefully, you decided to teach me about how basic supply and demand operate. Jesus, you are a self-absorbed piece of work.

[savanaly]

I'm truly sorry if my comment affected you negatively, it wasn't my intention. I used to be an econ tutor and sometimes my urge to just type my thoughts that way comes out and I regret that it sounds like lecturing.

Anyways, why do you think that, given all that, scalping is a bad thing then? Isn't getting the goods to where they're valued most a good thing? Who's getting heartbroken here? The people who can't afford one at the market price of $600? But most of them weren't going to get one anyways because of the limited supply. If there's something to not like it's the scarcity, right?

[TeMPOraL]

A problem I see is that the reseller is getting money for creating an artificial scarcity (buying off the stock of the original seller). It doesn't feel to me like an ethical behaviour. You portray it as making an unsolicited offering to the Gods of the Market on behalf of the original seller, but I don't think many people find a positive value in that. On the other hand, compare an example situations without scalping, and with 5x scalping:

  NO SCALPING
  Original seller gets: 1x price
  Customer pays: 1x price
  
  5x SCALPING
  Original seller gets: 1x price
  Reseller gets: 4x price
  Customer pays: 5x price

This is simple leeching. Customers pay 5x the price they could have, the seller gets still just the original amount of money. I think the situation is strictly worse than without scalping.

There are other arguments for and against to be made, but I think this one is enough to see why many people - myself included - find this practice distasteful and antisocial.

[savanaly]

Ok, put in that light I understand why there's a gut reaction of negativity. But when evaluating economic welfare of society, it is nearly an iron-clad rule to view all humans equally, and the scalpers are no exception. So we should try to push back against our gut reaction and look at it rationally.

Once we accept that the welfare of resellers matters just as much as customers, it's clear that the situation is not strictly worse with scalping.

As you helpfully tallied up there, the gains and losses of everyone involved is the same in terms of money changing hand in either case, but in the latter case of scalping, the world is richer, because in addition to the money you paid or lost, people in the world who have an NES celebrate it to the degree they like the NES. And that has to be higher for the people who won it via auction rather than blind luck.

I can see an objection coming, and that's that in the real world it's not blind luck, since often the people in a no scalping world camp out for days to try and be the winners of the lottery. But this is not a good outcome, because while this does mean that the people who value the NES most will tend to get it, it also leads to ruinous competition in terms of who is willing to spend the most time in line. The hours wasted to the line have to then be counted as a negative in the tally and that makes that option arguably worse than the blind lotto and certainly worse than the auction.

[matwood]

To really create the scarcity the scalper must continue to buy all of the items that come out. That is not going to happen, because they never created the scarcity in the first place. Nintendo released too few items to start, and possibly charged too low of price.

The customer is also not forced to pay anything. There is typically a short timeframe where the items are out of stock.

I personally find tons of value in scalping. I've done it myself with tickets, and bought tickets in the same manner. It lets me trade time (waiting at a website or in line) for money.

[witty_username]

If it were easy to scalp, people would do it themselves, so it is nontrivial.

Scalpers also make it easier to buy the product; without scalping one can not be sure whether one will get the product or not.

[matwood]

Your comment was fine. Too many people do not like scalping because it 'feels' unfair. Unfair is defined as buying said limited quantity item when they want at the price they want. It also touches into the very present class warfare undertone that is so prevalent right now. "Some rich person can go get one for $500 without (waiting in line|getting up at 4am|etc...), but I can't."

Personally I like scalping because I can almost always buy what I want as opposed to no option. It has always worked out well for tickets and items.

[paraiuspau]

It's a rare thing to have someone actually apologise online - have an upvote.

[jandrese]

Scalping is definitely sub-optimal. The reason being that it rewards a middleman, not the person doing the effort. It discourages labor.

A proper capitalist system for an event like a concert would have everybody enter bids for the seats, and once the venue fills up (or on the date of the event) the seats are assigned based on the bids. Of course if you're poor and the event is popular then capitalism says you're SOL. Money is everything and without money you are nothing.

One nice thing about this system is that prices are set by the people, not by the venue. People pay exactly what they think the performance is worth and no more. Artists get direct feedback as to how popular their act is.

[Chinjut]

The person willing to pay the most may not be the person who most desires it, considering the differing marginal utility of money across the vast spectrum of income/wealth inequality. Trump can buy on a lark what I would only shell out for as a matter of deepest, life-or-death desire.

(See also: https://www.currentaffairs.org/2016/10/do-economists-actuall..., http://www.demos.org/blog/12/23/14/when-inequality-ruins-ana..., http://www.interfluidity.com/v2/5822.html, and http://www.interfluidity.com/v2/5117.html for more on this same point)