[xxgreg]

All of the car companies, dialed down orders at the start of the pandemic. Now they are all trying to stockpile chips, due to not enough supply. I imagine (no data to support) the increased size stockpiles are a large part of what makes the problem worse. Kinda like TP really.

Also, Toyota is now cutting 40 percent of global production due to chip shortage.

https://www.bbc.com/news/business-58266794

[fomine3]

It's not mainly due to chip shortage, but other parts made in ASEAN. https://asia.nikkei.com/Business/Automobiles/Toyota-to-cut-g...

[lobocinza]

Tail whip effect

[xxgreg]

hmmm interesting - here's an article.

https://qz.com/2004569/the-global-chip-shortage-can-be-expla...

[lobocinza]

Oh, true! English is not my main language. I meant bullwhip effect, not tail whip (pokémon move). ;)

[visarga]

An interesting failure mode of free markets. Inherent instability.

[namaria]

Any system with signalling delay will experience this effect. Changes will get amplified across layers. That's also a common way to die from a viral infection: your immune system goes into overdrive from too many signals of infection from different tissue cells. A common treatment is steroids, which dampen immune response.

[lobocinza]

Is an inherent instability in any system with long/slow information chains. It's more a failure mode of central planning than of free markets. We had a few companies making bad decisions based on bad demand forecasting. This is a problem mitigated by stock exchanges (commodities).