Comments on: Arbritage and the Forever Stamp http://statastic.com/2007/05/14/arbritage-and-the-forever-stamp/ Fri, 18 May 2012 10:12:52 +0000 http://wordpress.org/?v=2.0.2 by: Bring on the Packrats! How to Stimulate a Hoarding Frenzy « Cool Rules Pronto http://statastic.com/2007/05/14/arbritage-and-the-forever-stamp/#comment-18482 Sat, 23 Feb 2008 01:59:30 +0000 http://statastic.com/2007/05/14/arbritage-and-the-forever-stamp/#comment-18482 [...] 5. Pick your price increase strategically: If it’s too low, people won’t care — and the financially savvy ones will determine whether it’s better to invest in bulk purchasing, or just keep their money in a savings account. If it’s too high, you could discourage your customers from making purchases after the increase goes into effect. The best option is to base the increase on certain external factors that consumers can’t blame on you — the price of oil, inflation or supply shortages — and then keep it within reason. 6. Decide if you’ll allow arbitrage: Arbitrage is the practice of buying something and selling it for a higher price at a different time or place. Blogger Statistico ventures that this could happen with stamps: someone buying tons of stamps at 41 cents then selling them for 42 cents after May 12. If you don’t want to see your “forever” product wind up on eBay, you could limit its purchases per person (which doesn’t exactly work, and goes against your hoarding stimulation strategy in the first place), or you could require that only the purchaser is allowed to use it. This, of course, reduces its desirability. So why not let arbitrage happen? After all, it’s the stories of Nintendo Wii units selling for $500 that help fuel its demand. [...] […] 5. Pick your price increase strategically: If it’s too low, people won’t care — and the financially savvy ones will determine whether it’s better to invest in bulk purchasing, or just keep their money in a savings account. If it’s too high, you could discourage your customers from making purchases after the increase goes into effect. The best option is to base the increase on certain external factors that consumers can’t blame on you — the price of oil, inflation or supply shortages — and then keep it within reason. 6. Decide if you’ll allow arbitrage: Arbitrage is the practice of buying something and selling it for a higher price at a different time or place. Blogger Statistico ventures that this could happen with stamps: someone buying tons of stamps at 41 cents then selling them for 42 cents after May 12. If you don’t want to see your “forever” product wind up on eBay, you could limit its purchases per person (which doesn’t exactly work, and goes against your hoarding stimulation strategy in the first place), or you could require that only the purchaser is allowed to use it. This, of course, reduces its desirability. So why not let arbitrage happen? After all, it’s the stories of Nintendo Wii units selling for $500 that help fuel its demand. […]

]]> by: Statastico http://statastic.com/2007/05/14/arbritage-and-the-forever-stamp/#comment-4642 Mon, 14 May 2007 19:12:05 +0000 http://statastic.com/2007/05/14/arbritage-and-the-forever-stamp/#comment-4642 A pre-emptive note: It seems unlikely that a speculator would find a guaranteed futures contract for 41.9 cents per stamp (after all, why not just buy the $.41 stamps yourself?). Nonetheless, there will be some period where a secondary market crops up where forever stamps will be sold at less than the official new rate. How long and the price will be determined by the existing supply of $.41 forever stamps. A pre-emptive note:
It seems unlikely that a speculator would find a guaranteed futures contract for 41.9 cents per stamp (after all, why not just buy the $.41 stamps yourself?).

Nonetheless, there will be some period where a secondary market crops up where forever stamps will be sold at less than the official new rate. How long and the price will be determined by the existing supply of $.41 forever stamps.

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