Comment by samstave
13 years ago
>Alice doesn't care how much drugs she gets for that
I think your explanation is wrong.
Alice would certainly care how much she got for $Tide, else she wouldn't see it as ($).
Bob is the lowest common denomiator here in that Bob must know that he can get $xY for $Tide from the store... whereas he is going to give minimal value for $Tide to Alice.
This is not only how Bob $Profits, but also how Bob lays low from the Law.
You think a crack addict is a rational actor?
From the article:
>While the driver kept the car idling, a heavily tattooed, spiky-haired detective named Alexander Mallari jumped out holding a laundry bag filled with a few bottles of Tide and lots of bonus items—a dozen pairs of Philips earphones, a dozen or so bottles of Victoria’s Secret perfume. Mallari’s mission was simple: He’d enter the shop, disclose that the items were stolen, and try to unload them.
>Ten minutes later, Mallari emerged with an empty bag and a small wad of money in his pocket. He was offered just $30—a pittance by the standards of the Tide trade. “That’s a true crackhead price right there,” Thompson said.
This is the drug that brought us "smurfing" - addicts would earn drugs by taking very many blister packs of OTC medication and popping the pills out of the blister packs to be used in making drugs.
Bob fences stolen goods from drug addicts because the margins are so good - and the margins are good because drug addicts just want enough money to get more drugs.
Addicts may be the most rational economic actors of all: each $10 can be a really, really big deal to an addict, and he will find the most efficient way, within his limited capabilities, to get it, whether that is smurfing, farming WoW, stealing copper pipe, etc.