Is consumer sentiment against overcharging producers a bad thing? (user search)
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  Is consumer sentiment against overcharging producers a bad thing? (search mode)
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Author Topic: Is consumer sentiment against overcharging producers a bad thing?  (Read 3884 times)
Tintrlvr
Junior Chimp
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Posts: 5,336


« on: May 17, 2024, 11:12:49 AM »

I think a big part of it is that suppliers, unlike scalpers, have to worry about the stickiness of prices on both sides. They don't want to raise prices now only to have to lower them later when demand cools; they would rather have consistent pricing not only for reputation reasons but also for their own financial projections. So they try to price their products for the steady-state of the market. That means that they are slower to react to surges of demand than scalpers, who feel free to change their prices extremely rapidly. If the surge in demand is sustained enough to change the baseline level of demand, prices will eventually go up, just more slowly.
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Tintrlvr
Junior Chimp
*****
Posts: 5,336


« Reply #1 on: May 18, 2024, 07:14:13 AM »

I think a big part of it is that suppliers, unlike scalpers, have to worry about the stickiness of prices on both sides. They don't want to raise prices now only to have to lower them later when demand cools; they would rather have consistent pricing not only for reputation reasons but also for their own financial projections. So they try to price their products for the steady-state of the market. That means that they are slower to react to surges of demand than scalpers, who feel free to change their prices extremely rapidly. If the surge in demand is sustained enough to change the baseline level of demand, prices will eventually go up, just more slowly.

'Surge pricing' i.e selling tickets on line like in an auction would accomplish the same thing and allow the actual supplier (the artist) and not the scalper to capture the consumer surplus.

My exact point is that they don’t want to do this and laid out reasons why. The rationale is stronger for  producers like NVIDIA than for Taylor Swift, of course.
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