Sunday, February 26, 2012

Sale Of The Nike All-Star Collection Sneakers Causes A Riot

See Riot erupts at Florida Mall during Nike All Star collection sneaker release event. Excerpt:
"A riot erupted late Thursday night at the Florida Mall as hundreds of people became disordelry vying to buy special NBA All Star sneakers at a special event at the Foot Locker. It was so bad police with riot shields and on horseback had to be called in."

"The full name of the sneakers is the Foamposite One Galaxy. It has a constellation-like print with a glow-in-the-dark sole and they were set to go on sale for the first time in stores at midnight Thursday at a retail price of $220.00. One thing that may have led to the increased demand at the store is that Nike decided not to sell the shoes online."

It seems like even $220 is below the equilibrium price if the quantity demanded is greater than the quantity supplied (at least on the first day or two). Perhaps part of what people are buying is being first. So any time price is too low you get a shortage and some other allocation method besides price takes over (like waiting in line).

If stores are so concerned about safety, they should consider selling it at a much higher price on the first day (with things like Play Stations, they end up getting sold for much more than the retail price on eBay very soon after the first day anyway). If some people object to such a high price or claim gouging, the store can remind people that they are trying to keep the peace and keep consumers safe. They could also pledge to donate some of the extra profit to charity. That could create some good will.

Back in 2006, police officers were allowed to go to the head of the line when the Play Station 3 came out. See If Prices Are Not Used, Other Allocation Methods Emerge: Police Officers Get PS3's First

See also How to Stop the PlayStation Violence


Anonymous said...

The price is most definitely below equilibrium. It's like a Black Friday for one item, which also may increase demand due to a limited quantity of one good, much like a collector's item.

Cyril Morong said...

It may be possible that if there is a buzz for a good, it increases the demand, making it a "must have" item. Maybe there is some kind of status associated with being first to get it.

farmland investing said...

There is definitely a status with being the first to get something, which increases the first buyer desirability. Just look at what happens whenever a new version of the iPhone comes out.