

A novel use for unpaired left shoes - strategy
http://mindyourdecisions.com/blog/2010/08/09/the-game-theory-of-perfect-complements/

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michael_dorfman
Wow, what a terrible article.

 _Can you think of a use for an unpaired left shoe?_

Sure, if the matching right shoes are also available. That's the whole point
of the anecdote, which is so absurd as to most certainly be an Urban Legend.

 _My friend’s father ordered a huge shipment of sneakers from a U.S. company
with the stipulation that all the left-footed shoes be packaged separately
from all the right-footed shoes. The left-footed shoes were to be shipped to
Bombay, and 60 days later the right-footed shoes were to be shipped to
Calcutta._

Step 1: I buy X thousand shoes for a price of Y$/pair, and probably pay a
little over the regular market price, because I want special handling, and
double postage.

 _The shipment sent to Bombay went unclaimed, so after 30 days it was
auctioned off_

Step 2: I fail to claim the shoes when they arrive. I now am out the money I
paid for the shoes, and have no shoes.

 _Because no one could think of a use for a huge shipment of left-footed
sneakers, no one bid against my friend’s father and he picked up these shoes
for next to nothing._

Step 3: I now pay for these shoes _again_.

Step 4: Profit!

Naturally, I can try to get out of paying for the shoes in step 1, but then
our story would simply be one of fraud.

 _The strategy is ingenious, and it reminds me that a savvy businessperson is
someone that can see value where others see none._

Quite the opposite, really.

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btilly
You missed it.

The profit comes from the fact that the money paid in step 3 is less than what
would have been paid in import duties had he collected the shoes in step 2.
And then, having successfully imported shoes at below the cost that other
entrepreneurs were capable of getting, he was able to resell those shoes at
below market rates and still have a higher profit margin.

If he paid more for special handling, that would have been covered. If the
shipments were big enough, then postage is based on some combination of weight
and volume. This is unchanged.

~~~
michael_dorfman
We're still back to "fraud", then, which is not a particularly creative (or
viable) strategy in my book.

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confuzatron
OK, where's the "fraud", or are you just harrumphing at having missed the
point of the article?

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Retric
Failing to pay the correct import taxes. Consider someone who reports
importing used furniture vs antiques.

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maushu
'Gaming the system' or 'fraud', doesn't matter what you call it. This is what
causes the vicious cycle, you avoid paying the taxes, the taxes increase to
compensate, repeat.

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Gormo
If they want the tax revenue to be more consistent, perhaps they should write
the tax laws more carefully.

And high import tariffs are much more likely to be protectionist than to be
legitimate revenue sources - raising the tax rates wouldn't be a sensible
response for a protection tariff.

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nzmsv
This isn't "seeing value". It's cheating the system by bending the rules.

Ford does this today with the Transit: they install a cheap back seat in
Europe, ship the cars to the States, and convert them back to cargo in a
garage next to the docks, all to save on import duties. That even creates some
jobs in order to game the system, and the tax Ford is getting around is stupid
to begin with, but no one in their right mind can call this productivity or
value.

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monitron
Amputees might appreciate unpaired shoes.

~~~
graywh
Can't say that I've ever seen an amputee with a peg let. But many of them
would wear the other shoe on their prosthesis.

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timinman
The left shoes were only valuable as an instrument for fraud. I'd argue that
really isn't value at all, because fraud is theft, not profit. In fact, the
left shoes (and the right ones) likely became a liability to the friend's
father as he'd have probably been blacklisted from ordering from that supplier
again.

~~~
paulgb
Why should the supplier care? If I'm reading it right, he paid the supplier,
but got out of paying the full customs fees.

~~~
timinman
OK, maybe I misread it. The way I read it, he got out of paying for the shoes
by not collecting them - even as I write that down it doesn't make sense! -
You're right.

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MichaelSalib
The article repeats an old canard about how Americans no longer manufacture
things. In fact, American manufacturing has expanded a great deal since the
1950s and is doing very well. However, because of productivity improvements,
manufacturing jobs have declined significantly even as manufacturing has
expanded.

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famousactress
Ok, so essentially all of us agree this is creepy fraud... But it seems like
an interesting exercise. Monitron already posited value to amputees.. Can
anyone else think of actually valuable uses?

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Gormo
I don't see anything even resembling fraud here. What do you believe
constitutes fraud?

~~~
famousactress
Sorry, my reading was that he ordered something he didn't pay for. Looks like
the alternative (and presumably correct) interpretation is that he ordered
something that he did pay for, and used a clever trick to avoid taxes. Still,
I'm more interested in the spirit of the question the blog title made us all
think we were getting an answer to!

~~~
Gormo
Oh. Well in that case: container for loose change; planter for seedlings; eco-
friendly building material; jello mold; ant farm; combination pencil
case/eraser; cheese grater.

