• 2006-09-04

    letter to Mr Stephen J Dubner,co-author of Freakonomics

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    http://www.blogbus.com/danecao-logs/3227523.html

    Here is the letter I sent to Mr Stephen J Dubner,the co-author of Freakonomics the other day,about an intriguing phenomenon I observed here in China.Hopefully he would be interested and kind enough to post it on the website he maintained for the said bestselling book.It would be better if he would comment  a little on it,from economic and journalistic perspective.Here goes:

     

     

    Dear Mr Dubner:

       Here in China I found a very curious and interesting thing the other day,I thought you might also be intrigued.It's about some of the sales practices conducted by Chinese supermarkets,and I wonder if it's an universal practice all over the world afer all.that is,They will not sell you more than 2 jin of eggs at a time.Bewildered,I approached the sales clerk around the egg section demanding an explanation,cuz it seems like they are depriving us customers our perfectly legitimate rights to purchase whatever we want,at  whatever quantity that suits our needs.I mean who give them right to ration our supplies of eggs.We may be socialist planning economy once,but we have long since scrapped it and crossed over into market-oriented system which is now in super-high gear.Food rationing has OFFICIALLY become a thing of the past.Then what's this 2-jin-per-person cap?A extremist socialist throwback?Well,turns out it's right the opposite.Instead of socialism running rampant again,it's actually capitalism at it's most efficient work.They supermarkets decide to cap the egg supply to customers as a competitor-screening method.Translation:1.they provide eggs ,quality eggs,to customers,at a very competitive price;after all,that's what supermarkets are all about:good goods could be bought at low price.2.Customers at large emcompass a lot of small sub-groups-including but not limited to,small vendors that could find a second business chance here,that being Repackaging and reselling the eggs purchased cheaply at supermarkets to still other customers,at a profit.3.if supermarkets leave this unchecked and don't impose any supply cap,some of their potential egg customers willl be lost to the ubiqitous vendors,the conveniene offered by whom often trump urban customers' consideration of a few more cents per egg they have to pay.

      So supermarket are forced to fall back on the not-so-effective supply capping strategy,in the hope of screening potential competitors and stemming the flow of Cheap eggs being resold at their expences,quite literally.

     

                  Hope you enjoy this,both as a ROGUE economic journalist and as a,well,hopefully,egg buyer.

    URL of the website of the book:   www.freakonomics.com/blog.

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