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> I'm fascinated by the concept of prioritization rules in place rather than simply raising prices

Do you realise that it's potentially illegal to increase prices based on market demand during a crisis?




Right. It's important to the public that scarce goods instead by allocated by willingness to stand in line. What does standing in line mean for a corporation that could be anywhere in the world? Maybe some kind of proof-of-work scheme for the CEO or majority owner?

Azure could service VM creation requests in the order of their creation, but "take a number" doesn't work as well. The opportunity cost of what else you could be doing with the time spent waiting in line is the "price" that allows the market to clear.


> It's important to the public that scarce goods instead by allocated by willingness to stand in line.

It's important to keep in mind that a higher price is unlikely to lead to much additional capacity due to the nature of this shock. Companies have to do business with their customers for many years after this is over. "Sorry, we're overloaded with demand due to this crisis" sounds a lot better than "Pay us ten times as much during the crisis or go f* yourself." Microsoft isn't in business to allocate resources according to a simplistic strategy pulled from an intro econ course, they're in business to make money over a period of many years.


"Sorry, we're overloaded with demand due to this crisis" is "go f* yourself."

Although you're right, Microsoft may have correctly assessed that its customer relationships will turn out better if it leaves them completely hosed vs. hosed with an unpleasant escape hatch.

It's still an interesting question: what kinds of allocation systems are best when for whatever reason market pricing is off the table? There are certainly better and worse approaches within the space of lotteries, queues, etc.


Some products or services, every customer needs about the same amount, or the same minimum amount. It seems reasonable to have a maximum allocation in a crisis for those.

If different people need vastly different amounts of something, either they are able to judge, in which case prices work, or they are not, in which case some independent means of allocation has to be used.

I don't think waiting in line is a good method, but that doesn't mean unregulated prices always are either.


This shock is going to be a lot less short-term than people in this thread advocating anti-price-gouging laws seem to think.


Your tone seems to be that it's either allocate by price or by standing in line.

But it's analogous to toilet paper. If you are limited to one package per trip through the checkout line, yes, you can consider that to be allocating by willingness to stand in line. But the intent is simply to have a (not terribly strict) quota, and not to have you go through many times.

So it isn't as fundamentally screwed up as proof-of-work. Nobody is supposed to actually treat it that way.


Proof of work isn't necessary. Rationing works too.




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