Friday, November 28, 2008

File this under....Black Friday Economics

TPS Clevelander Rob Holub sends over his efficient market link of the day. Check out the post at 8:03am:
"He was vying for a Toshiba laptop on sale for $497, and an E-Machines desktop for $397. The total savings on the items would be almost $600, Vargo said. Like Target, Best Buy passed out tickets for the first shoppers in line.

But even though he was toward the front of the line, Best Buy had already run out of tickets for the laptop before getting to Vargo. He ended up buying a ticket from someone else for $20. Some people were asking as much as $50 for the tickets, he said."

And now for the revealed opportunity cost...

"After getting the tickets, Vargo had to wait in another line to actually purchase the two items. He tried to use his debit card, but the total exceeded his withdraw limit for the day and he could buy only one. Best Buy put his item aside while he tried to call his bank.

When I talked to him at around 7:30 a.m., he was in the line for a second time after succeeding in getting his withdraw limit increased. 'It's just been an ordeal,' he said. 'But the savings is worth it.'"

In reference to the top quote-- are there people that wait in line all night to get the coupons, then either sell the coupons or immediately re-sell the items (on eBay, for instance)? I'd never heard of this, but it would make sense. When you introduce competition on non-price margins, you get some perverse outcomes.

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