> It doesn't work. It's unenforceable without the government to enforce it, and even then people will skirt it.
Okay, but when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem.
> A rule limiting how many a person can buy doesn't actually affect demand, it just affects that market's ability to respond to demand.
There's a nearly fixed supply, because no amount of demand can affect the shortages.
There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it.
In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit.
You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people.
> when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem.
How is restricting activity not a rule? I don't think it would demonstrate the problem at all because I don't think it would actually do much (most people would ignore it). Maybe I'm misunderstanding what you meant originally or mean here?
> There's a nearly fixed supply, because no amount of demand can affect the shortages.
If demand dropped to the point below supply it wouldn't be a shortage.
> There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it.
> In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit.
Sure they are. Without a secondary market and with a primary market that is fixed-price and a limited supply, after demand meets supply, nobody gets any more of that product, which means there's zero liquidity. With a secondary market, people re-sell for a profit, and the market has liquidity again. The people that want it are able to get it as long as they are willing to pay the extra amount. It's possible to buy the item where it would not be previously.
> You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people.
I agree. I just don't think you can do anything about it usefully except to try to increase supply or reduce demand through various means. Everything else I've seen fails or has unintended consequences (which are hard to reason about ahead of time because they are by nature unintended).
I'm not arguing free markets always produce a good outcome, but I do think they generally provide the best outcome you can expect given the environment without relinquishing all control (and I think central planning only works for limited scopes and limited time frames).
The simple solution is to just increase the price of these cards to what the market deems they are worth, and the resale market problem goes away. The problem is that nobody (even me) really wants that, I'm just willing to say that while I don't want it for various reasons, it does solve the problem. It does that by reducing demand by increasing the price.
Okay, but when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem.
> A rule limiting how many a person can buy doesn't actually affect demand, it just affects that market's ability to respond to demand.
There's a nearly fixed supply, because no amount of demand can affect the shortages.
There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it.
In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit.
You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people.