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Console Shortages: Why not use charity auctions? |

We saw shortages with the 360 last year and now with the PS3 and Wii this year. A normal free market will respond to shortages by raising the price until the shortage is over. That’s the standard, textbook response. However, that’s simply not an option since that would trigger huge, lasting negative sentiment among the public.

We’ve seen people go to extreme measures to increase their likelihood of getting the chance to buy a console during a shortage. People have waited in line for days and others have paid people to wait in line for days. And of course, there is a gray market of console scalpers.

All of this is so wasteful. Instead of just selling the units at a shortage price and letting the crowds and the scalpers sort it out, how about a better solution: Charity Auctions.

It works just as you’d expect: people bid the price up as high as they are willing to pay. The regular retail price is distributed normally to the manufacturer and retailers and the surplus beyond the retail price is given to a neutral charity.

This works well because:

  • It’s fair.
  • It’s definitely not greedy.
  • People are rewarded for doing something productive rather than looking for pre-order loop holes or waiting in line for days.
  • Money really does go to a good cause rather than to wasteful activities such as scalping and paying people to wait in line.

Many big shows and music concerts have used this strategy when there is huge demand that far outpaces the limited number of seats and it has worked out well. Why not use this system for a console launch shortage?

Nine Inch Nails auctions concert tickets and donates extra profits to charity

  • Rather

    And mysteriously a day later, a “Save ATRAC” charity registers for tax advantaged status …

  • I’m sure its simply because most businesses don’t want to deal with all of the charity paperwork that would be required.

    That, and it doesn’t build up the hype machine as much…

  • that is an awesome idea. and i think it would still build up the hype machine, and in a positive light. the mainstream media would be all over this.

  • this would be cool even if it was just a portion of the consoles that were sold like this.

  • Brilliant.

  • Yeah, like giving this money to Seti or Folding at Home (which the PS3 also supports)

  • mcloki

    That is an awesome idea.

  • jwspiker

    yeah.. thought about this awhile back, sorta like the adventure of sitting out with a friend to find one of the 1st ps3’s, then selling it to someone, but taking the profit, and possibly the 600 and giving it to my friend’s not for profit ministry . A little Bit Of Yeast. Seems like the right thing to do at least, not what i necessary want to do, but the right thing.