Artificial scarcity
Under artificial scarcity refers to the market behavior of a manufacturer , which the offering of its products or services below the existing demand holds and through these shortages driving prices acts. Either the production capacity is deliberately kept low or only fixed numbers of items are issued per time period (day / month / year) or per "action".
General
In the context of marketing , artificial scarcity is used as a marketing tool. In order to ensure the exclusivity of a product or a brand , the quantity produced is deliberately set too low and the possible profits from the quantities not produced are foregone. Typical examples are limited (and sometimes numbered) special editions of products, especially luxury goods . Also are often Prints produced artificially limited edition. This artificial scarcity is based on the scarcity principle from psychology , according to which people show a preference for quantitatively limited goods, regardless of their product quality .
Classic theory
In classical economic theory , an “artificial scarcity” in a perfect market can only occur for a short time. If one supplier were to offer less than is demanded at the market price , another supplier would close the gap in the market and offer more accordingly.
Monopolies
However, the market form of the perfect market is usually not found in practice. In the case of monopolies in particular , the only provider is in a position to artificially reduce the supply and still achieve a higher yield (the so-called monopoly rent ) thanks to the higher prices .
A special case of the monopoly are patents and copyrights , which also create an artificial scarcity in the access and use of information and thus only enable returns, or only then does an (artificially scarce) market arise.
Cartels
Also cartels are able to bring about an artificial shortage and thus achieve higher prices. The oil price crises of 1973 and 1979/80 were due to the reduction in oil production by the OPEC cartel and not to lower oil reserves . As a result, the oil price exploded and led to a global recession .
Artificial scarcity is viewed by the economy as damaging the market because it artificially keeps prices above the equilibrium level . Modern market economies therefore prohibit cartels and endeavor to promote competition.
species
Artificial scarcity can be brought about by companies or the state . If the supply is not limited in a natural way, as is the case with precious metals , for example, an artificial shortage can be created:
- An artificial cause of scarcity is practiced primarily by companies in luxury goods that deliberately offer less than there is demand. Renowned fashion labels (such as the It-Bags from Louis Vuitton , Hermès or Chanel ) or jewelry manufacturers use the scarcity principle through high-price strategy and waiting time as two inherent properties of a luxury brand, forego ubiquity and only market their products in a few selected flagship stores . Also, the guerrilla marketing , and the Pop-up retail use the marketing tool of artificial scarcity. While guerrilla stores regulate access to the store through an unusual location , pop-up stores offer a limited range of products ( greyhound principle ) .
- State-ordered import quotas (such as the sugar quota ) or production quotas ( milk quota ) represent an artificial shortage of supply. They are intended either to protect domestic industry or to eliminate or prevent market failure .
State intervention
In many other cases, the state creates artificial scarcity.
There are no market prices for a large number of government offers . This applies to public goods such as the use of state infrastructure . In other areas, steering demand through prices is politically undesirable (e.g. in the health sector ). Prices and offer quantities must therefore be set administratively in these areas ( administered price ). If the amount available is too short, either overuse (with the result, for example, of traffic jams in the transport infrastructure ) or access to the offer is restricted (e.g., budgeting in the healthcare system or numerus clausus for university access ).
Another area in which the state creates artificial scarcity is the practice of permits and concessions . In many areas, for example, municipalities systematically designate less building land than meets the demand. This is to avoid urban sprawl . In economic terms, this means that building land, even in poor locations, is significantly more expensive than agricultural land plus development costs, which creates an artificial scarcity.
A number of industries (e.g. the taxi industry ) require state licenses. In order to restrict competition, these are also usually kept artificially tight.
Other aspects
The free economy argues, alternatively, the soil is subject to an artificial scarcity, since it can be stored without holding costs . This means that soil not only fetch a price as building or arable land , but also as a store of value . This increases land prices as the need for stores of value increases indefinitely compared to the need for building or arable land. As a result, land prices continue to rise as long as no better store of value is available such as B. Cash in a deflationary economy, which by itself is constantly growing in purchasing power .
See also
Individual evidence
- ↑ Gesa Prüne, Luxury and Sustainability , 2013, p. 177
- ↑ Katharina Hutter / Stefan Hoffmann, Professional Guerilla Marketing: Basics - Instruments - Controlling , 2013, p. 123
- ↑ Hermann Adam / Harald Albuschkat / Reinhard Blasig / Alfred Beans / Armin Bohnet: Dictionary of Economics . Gabler Verlag, 1980, p. 171 , doi : 10.1007 / 978-3-322-83497-3 ( limited preview in Google Book search).