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41 sats \ 3 replies \ @Undisciplined 3 Jul \ parent \ on: Should a company police RRPs and fight scalpers? econ

Another aspect of rationing that occurred to me during Covid is that by having some of the item in stock, more customers come to your store and buy other stuff.

Rationing can create a loss leader out of items your competitors ran out of.

42 sats \ 2 replies \ @kepford 3 Jul

Very good point. Going with the Costco example their hotdogs were something they said they would not raise the price on. I mean, I don't like their food but they do sell a ton of food in their fast food area.

"You can observe a lot by watching"

~ Yogi Berra

42 sats \ 1 reply \ @stack_harder OP 4 Jul

I'm obvs not in the US, but I do remember reading about how the Costco rotisserie chicken is their main loss leader. They subsidize it and people love it, and obviously buy more stuff when there.

same with the Big Mac etc, but this is classic market knowledge.

Talking about logic though, humans aren't super logical in general, and if a brand does something that angers its customers, even if it's economically 'the right thing', that will hurt their profits. Protecting the profit is the prime goal so you could say that doing the illogical thing, is actually logical , if it is a net benefit to the business.

0 sats \ 0 replies \ @Undisciplined 4 Jul

There are lots of examples from experimental economics of people perplexing economists by being "irrational" and it usually doesn't come from an inability to understand the situation but rather from having non-monetary concerns.