Thousands show up for computer sale: People trampled, beaten with a folding chair. A woman urinating on herself. The police called, then themselves calling for backup. All to get a bargain. The stampede erupted Tuesday when a crowd estimated at 5,500 showed up at the Richmond International Raceway to purchase 1,000 used Apple iBook laptop computers. The Henrico County school system was selling 1,000 of the 4-year-old computers to county residents for $50. New iBooks cost between $999 and $1,299…. Seventeen people suffered minor injuries, with four requiring hospital treatment, Henrico County Battalion Chief Steve Wood said. There were no arrests, and the iBooks sold out by 1 p.m.”
Source link: http://archive.mises.org/3971/how-to-know-that-the-price-is-too-low/
How to know that the price is too low
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Aren’t they selling mercedeses for 100 dollars a piece next week? There will be nothing left of the city.
I believe that $50 is the going price for 4-year old iBooks on ebay.
I don’t remember economics – is this consumer surplus?
“I don’t remember economics – is this consumer surplus?”
Think: shortage.
Some people will spend $100 worth of time standing on line in the rain to get a “free” $20 item.
Obviously the time waiting(or leisure/labor forgone)was worth less than the utility gained by the free item in your example. If this wasn’t so they wouldn’t have waited.
Mike,
They may have miscalculated on the utility gained from a probable (remember only 1,000 computers were available) $250 savings. The bruises, injuries, fear of being crushed, hospitalizations, soiled underwear, etc., were probably not accounted for ex-ante.
Tom
Then again, some people go to loud concerts and fight in mosh pits for exactly the same experience, except they don’t get a cheap computer out of it. If that doesn’t prove that value is subjective, nothing does.
Good point Ryan!
I went to see Guided By Voices at Irving Plaza back in 2003, and due to a still-healing eye injury, was wearing my glasses instead of my contacts when I waded into the “mosh pit” (also known as the “free-beer zone” at GBV shows). I ended up ruining my $300 pair of glasses, so I paid more than most did for the experience. I am at great pains to tell you that I had no complaints whatsoever, bolstering your proof!
I am glad to here from Vince, Ryan and Mike that people never miscalculate and have phychic losses.
Of course people suffer physical losses, since where not in the ERE and there is uncertainty. Im just saying that when you know the time spend waiting is going to be worth it ex ante you aren’t going to act, which is as clear as can be. And when your costs(forgone leisure/labor) turn out to be higer than your physical gain ex post you suffer a loss. Which is all basic theory, i’m just stressing that no rational person is going to spend $100 worth of leisure or labor for a $20 dollar item ex ante. So I hope it’s clear now that my point of view is, yes, people do suffer physical losses when it turns out to be that they’d rather spend time on something else than gaining a $20 item or a $50 ibook.
I live in Henrico County — this was a classic case of mob mentality —
one iBook per buyer so there was no need to panic or to stand in line if you were more than 1,000 back in line
– during the school year the stundents had first right to buy the computers–those that the students didn’t want were sold–no guarantees that they even worked
who says markets are efficient — the madness of crowds—the utility of beating out someone for a deal more than compensates
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