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"Irrational" prices
by tomtemple
As a resonse to you "The Price is Right" post, I would point to a very rich literature in game theory. There are people trying to put "Reputation" into equations while striking down the idea of "Pareto Optimality".

Since these companies are still going to be around tomorrow maximizing profit _today_ isn't necessarily the best plan. Intentionally giving consumers a surplus is a perfectly rational long term strategy.

Game console pricing has an obvious reason: the manufacturers are looking to make a large user base in the long term. The last thing they want to do is drive down demand to the supply rate--the current level of demand will affect the future level of demand. Similarly, retailers don't want to cultivate a reputation of being exploitative and so they will not maximize profits during a temporary scarcity.
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