Comment by pontifier | Hacker News Reader

Comment by pontifier | Hacker News Reader

I've often thought that the root of many queues is a discontinuity in pricing. This is most apparent on black friday. If prices were smoothed out then a time/money trade-off can happen. Anyone can jump to the front of the line if they are willing to pay more. This is more "fair" than last first but would optimize revenue for the seller, and lower wait times for everyone.

Imagine: The next iPhone sale stars at $10,000. The crowd makes a loose circle as the clock starts to count down to sale time. Just before the clocks reaches zero, one obviously rich and important individual struts up to buy one. They casually complete their transaction, and hold up their prize as the clock starts counting down from 30 again.

At time=zero, the current price starts dropping $5 per second until about a minute later the next person is willing to step up to buy it for $6k. They walk away satisfied because of the conspicuous consumption they have just experienced. Several more step up as the price begins dropping again at $4k, $3750, and $3100. The envy of the crowd is palpable.

At $2560 a small swarm of early adopters breaks ranks. It's a good 20 minutes before the price starts dropping again. As you watch the large pile dwindle and the crowd begins to vibrate it's clear they will not be reaching the base price today, but will instead sell out the entire inventory at some unknown price.

As you eye the crowd, you think about how much you want it, and suddenly your heart races as you step out in front of everyone else to get your hearts desire.

That's known as a dutch auction and it can be highly effective. I know all about them since wholesale flowers are sold this way (hence the dutch connection) and my brother in law's family is in flowers. It's a very fast form of auction since a single bid wins each lot. Rather than the price being driven up in fits and starts it drops at a steady and fixed rate.

Similar to the article's authors dutch actions improve the average at the expense of the extremes (in this case towards sellers). Dutch actions don't often have the sky high prices some traditional actions can drive rare items to but they tend to sustain high average prices because you must bid without reference to the value someone else may place on the item. A traditional auction you may sneak away with an item for less than you expected if no one bids against you. In a dutch action you will likely pay closer to the maximum price you were willing to spend since the longer the wait the greater the risk someone snaps it up without any recourse.

I hadn't ever thought about a dutch action for highly coveted copies of the same item though. It's very interesting idea that would likely kill much of the launch day line up (especially if preorders were accepted online). If the 100 the store has to sell are the only ones that would ever be the prices would be driven into the stratosphere but if you know you can wait a week or 2 for your preorder to be filled and pay the actual "retail" price that's a strong incentive to stay home and buy it online rather than waiting in line for hours.

https://en.wikipedia.org/wiki/Dutch_auction

I once tried to sell a car like this. I put an ad in the paper that said, say, $6000 and dropped it in price over time. It didn't sell.

Years later when I went to buy a house the real estate agent explained to me why. The market for houses (and presumably cards) include lots of people who are watching and waiting for months or years to buy. They get into a steady state where they only look at new listings and ignore the ones they've already seen.

So if your house or car doesn't sell relatively quickly, you move from the seller-arrival queue to the buyer-arrival queue. Which takes disproportionately longer and it's likely that you won't be getting the best price for it.

The incentives for the real estate agent make them think that way though. If they sell a house for $200,000 in a week, they are probably a lot happier than if they sold it for $300,000 in 6 months.

Or perhaps, you wait around a corner with a rock and you bash the person who bought it at $10k head in.

This is idiotic at best. If a iPhone is worth $10k and it someone's hearts desire. They should get taxed the bajesus out of them and that money spend on actually doing good in society!

Hundreds of millions of people believe that producing iPhones is a form of doing good in society.

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