Is this unethical?

Here in Australia there was a guy who buy a ton of toilet paper when the pandemic first hit (hundreds of rolls) then tried to scalp it but all of our marketplace sites like Gumtree and eBay wouldn’t let him sell them. Thankfully no one bought it then stocks normalized.

He then tried to get a refund which was thankfully refused so he was stuck with all the toilet paper I’ve seen people here trying to sell an R5/R6 for higher than retail so I’m hoping the same happens to them.

OhLook wrote in post #19175596
Ocean. Life preserver.

Tom Reichner wrote in post #19175601
I can't figure out what that means, in the context of this discussion ..... but I do appreciate you responding to me, nonetheless.

I was alluding to an earlier post: POST 19174824

To put the point differently, my tolerance for selfishness stops far short of your sister-in-law's and yours. If she hadn't bought up a boatload of tickets, her customers or other buyers could have had those tickets at a fair price. A fair price.

Tom Reichner wrote in post #19175523
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She thought she was making the most of an opportunity to get money for herself and her family. . That's what she thought. . And I applaud her for it, and any other individual who takes advantage of similar opportunities.

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Unfortunately, there are many people who feel this way.

DrMitch wrote in post #19175663
I don't think buying new or especially used "luxury" items like cameras, cars, etc and selling them at a (possible) profit is unethical. But marking up or hoarding items like hand sanitizer during a pandemic is certainly a douchy move IMO. So is the astronomical mark-up on many items - especially drugs like insulin! But that is a whole other can of worms.

I personally have never been the type of person who had to be the first on the block to have item X and instead I get greater satisfaction finding deals / bargains on used items or "last years" model. If someone HAS to have item X right NOW and it's sold out, then it's their $$ if they want to pay a crazy inflated price now.

Somebody up above mentioned a "fair" price. There's no such thing. There's only an agreed-upon price. Either party can back out if an agreement can't be reached.

The line between unethical and merely opportunistic gets crossed when the buyer can't say no. Life-saving medicines, plywood and sandbags in a storm path. Price gouging in those circumstances is not only unethical but often illegal.

But if you're looking for a camera or an xbox or whatever, and your only gripe is that it shouldn't be this expensive, welcome to earth. You'll find that gripe fairly universal on our planet.

drsilver wrote in post #19175844
Somebody up above mentioned a "fair" price. There's no such thing. There's only an agreed-upon price. Either party can back out if an agreement can't be reached.

I was the somebody. Your point is consistent with classical economics. But is it fair if you paid five times what the concertgoer in the next seat did to attend the same performance?

The venue sets prices to cover its estimated costs, including pay for artists and others involved in the production, plus profit. Then someone who contributes nothing to the show restricts the number of tickets available at that price, forcing the supply curve down. (An analogous maneuver, much more extreme, is kidnapping and ransom.) The free market sounds great until you get to such complications. It isn't very good at handling attempts to corner a market, let alone monopolies. Then, ideally, the legal system steps in.

The words "fair" and "unfair" occur in this Wikipedia article, showing that the idea of fairness does enter into the controversy.

We're well on our way to making everything free. Just stay tuned to see how that goes.

OhLook wrote in post #19175966
I was the somebody. Your point is consistent with classical economics. But is it fair if you paid five times what the concertgoer in the next seat did to attend the same performance?

It's absolutely fair. Both concert-goers paid exactly the demand price. If I paid $500 for a $100 ticket, it cost me $500 to go to that concert. If I paid $100 for that ticket and passed up an opportunity to sell it for $500, it cost me $500 to go to that concert.

Real life example. I had a buddy who won a lottery to buy 2 Super Bowl tickets at face value ($500 each). That's a lot of cash, even at face value. On the secondary market, those tickets were selling for $2500 each. He could spend $1000 to use those tickets or have somebody pay him $4000 net to stay home. Regardless of the purchase price, the cost of attending the game didn't change. (He sold the tickets, watched the game on TV and enjoyed his lottery winnings.)

There are a variety of reasons why a business might set an artificially-low price based on demand. And when that happens a market for truly-demand-level pricing will emerge even though that's a stupidly-risky business. They're paying full retail for a perishable product. If they misread or mistime the market they end up with a fistful of tickets for yesterday's George Harrison concert. Then we all get to laugh at them and they deserve every bit of it. But really, it's just the market correcting inefficiencies.

drsilver wrote in post #19176059
It's absolutely fair. Both concert-goers paid exactly the demand price. If I paid $500 for a $100 ticket, it cost me $500 to go to that concert. If I paid $100 for that ticket and passed up an opportunity to sell it for $500, it cost me $500 to go to that concert.

Real life example. I had a buddy who won a lottery to buy 2 Super Bowl tickets at face value ($500 each). That's a lot of cash, even at face value. On the secondary market, those tickets were selling for $2500 each. He could spend $1000 to use those tickets or have somebody pay him $4000 net to stay home. Regardless of the purchase price, the cost of attending the game didn't change. (He sold the tickets, watched the game on TV and enjoyed his lottery winnings.)

There are a variety of reasons why a business might set an artificially-low price based on demand. And when that happens a market for truly-demand-level pricing will emerge even though that's a stupidly-risky business. They're paying full retail for a perishable product. If they misread or mistime the market they end up with a fistful of tickets for yesterday's George Harrison concert. Then we all get to laugh at them and they deserve every bit of it. But really, it's just the market correcting inefficiencies.

The highlighted part needs explanation, or is poorly written.
$100 != $500 to the person who both wanted to attend the concert, and paid $100.

drsilver wrote in post #19176059
It's absolutely fair. Both concert-goers paid exactly the demand price. If I paid $500 for a $100 ticket, it cost me $500 to go to that concert. If I paid $100 for that ticket and passed up an opportunity to sell it for $500, it cost me $500 to go to that concert.

Thinking that way, it cost you $400–but how often do we think that way about purchases? I buy a banana at Trader Joe's, 19¢. Do I tell myself "I could find a starving person and maybe get $5 for this banana. Hey, I'm losing $4.81. Ouch!"? No, if I did that, my grocery expenses would bankrupt me pretty quickly.

I see scalpers as interfering with the market.

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drsilver wrote in post #19176059
If I paid $100 for that ticket and passed up an opportunity to sell it for $500, it cost me $500 to go to that concert.

OhLook wrote in post #19176069
Thinking that way, it cost you $400–

No, thinking that way it actually would cost him $500 to go to that concert. . His reasoning and his math were both correct.

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OhLook wrote in post #19176069
..... but how often do we think that way about purchases?

I think that way about almost everything I own, everything I do, and everything I could do, but don't do. . Everything can be quantized by how many dollars it sets me back, or by how many dollars it nets me. . Everything. . Both experiences and physical goods. . Everything that I keep, that I could sell readily, costs me to keep it.

The cost of keeping something I already have is calculated carefully, factoring everything in, from the price I sell it for, to the cost of running an ad and shipping or delivering it, to the cost of electricity to run my computer for the minutes that I spend writing and submitting the ad, to the time I use to conduct the sale, compared to what I would be doing with that time if I weren't using it to sell an item. . At home, I am always looking around me at all of the piles of stuff, and thinking about how many dollars and cents I could get for each of the items, and how much it would cost in dollars, cents, hours, minutes, and effort in order to sell that item. . Then I think of what my life would be like without that item, compared to how it is with that item. . Then 99.999% of the time I decide not to sell it. . But every single thing in my home and yard and car and garage is there because I decided to keep it, after mentally calculating the net cost of keeping it vs. the net gain of selling it.

Each time I do something, whether it be taking food out of my refrigerator to eat a meal, or planning a photography trip, or driving to a friend's house to watch a movie or play strategy games, or deciding which laundry detergent to buy - in almost every tiny little decision in life, I look at all of the different options available to me, mentally think of all the factors that go into each option, add up the monetary cost or benefit associated with every available option, and then make my decision, fully aware of how many dollars and cents each of the options will increase or decrease my net worth.

Every time I drive anywhere I think about the cost per mile - both fuel and pro-rated wear and tear on my car. . Even for little trips like going to the post office or going 2 miles out of my way to stop by a buddy's house on my way home from somewhere.

Everything I do has some affect on my net worth, and I try to always take every single penny into account before I do anything.

I realize that I used the term "quantized" in a different way than it is normally used, but after researching the word, and other words that I could have used instead, I feel that "quantized" conveys what I want to say better than any of the alternative words that I could think of.

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To me it's just supply and demand.

If it's unethical, then every new car dealer in the US is unethical. When they get the first example of a new, high-demand vehicle they add something call "market adjustment".
If it's unethical, then every airline is unethical. Buy a ticket a year before you fly (when there's plenty of seats), you can get a cheap fare. If you can get a ticket the day before you fly, you'll pay through the nose.
If it's unethical, then every hotel operator in cities that host the Super Bowl/Formula One/big sports event is unethical. See how much you'll pay for a hotel room that weekend vs. the rest of the year.


Taylor Swift figured out how to beat the scalpers. She puts the tickets on sale to her fans. The first batches go on sale for exorbitant prices because she knows what the scalpers can get. Since her organization is selling them the money goes in her pocket instead of the scalpers'. As the high-priced tickets are sold, she releases another batch and adjusts the price accordingly.

Tom Reichner wrote in post #19176158
No, thinking that way it actually would cost him $500 to go to that concert. His reasoning and his math were both correct.

It's "Show your work" time.

Case A: He finds a ticket on the sidewalk and sells it for $500. Cost $0, gross receipts $500, net profit $500.

Case B: He pays $100 for a ticket and goes to the concert. Cost $100, enjoyment of the concert not truly quantifiable but expected to be $100 worth, as he agreed to pay that price, net profit $0.

Case C: He pays $100 for a ticket and sells it for $500. Cost $100, gross receipts $500, net profit $400.

We look in on him at the point when he has bought a ticket. His options are B and C. With B he breaks even. With C he gains $400 and misses the concert.

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Regardless of how he obtained the ticket, if he can get $500 for it, and chooses instead to use it himself, then it cost him $500 to get into the concert.

Net profit and how much it cost to get into the concert are two entirely different things - they are not related to one another, and are to be calculated differently.

If I can sell one of my lenses for $4,000, then it is costing me $4,000 to keep that lens. . How much I paid for it has nothing to do with anything, after the fact. . If I paid $10,000 for that lens, but can only get $4,000 for it now, then it is costing me $4,000 to keep and use that lens. . If I found a bargain and only paid $2,000 for that lens, but can get $4,000 for it, then it is still costing me $4,000 to keep and use that lens. . What I paid for it originally has nothing to do with how much it is costing me to keep it and use it now.


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Tom Reichner wrote in post #19176297
Regardless of how he obtained the ticket, if he can get $500 for it, and chooses instead to use it himself, then it cost him $500 to get into the concert. . . . If I can sell one of my lenses for $4,000, then it is costing me $4,000 to keep that lens.

That's even stranger math than I dreamed of. If you're going to count the possible resale value as a loss, why not say his cost to get into the concert is $600? He already paid $100 and is going to miss out on a $500 opportunity.

OhLook wrote in post #19176303
That's even stranger math than I dreamed of. If you're going to count the possible resale value as a loss, why not say his cost to get into the concert is $600? He already paid $100 and is going to miss out on a $500 opportunity.

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You just have a very different way of looking at things. . And that's okay.


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