The Price Is Right, GameStop, and the Search for Competitive Advantage

 First off, today is my niece Juno's 10th birthday.  It's hard to believe that she's already in the double digits.  Only 3 more years and she'll be a teenager.  That's how you know you're getting old.

Juno when she was about 8 months old

Anyway, near the start of the year Pluto TV started a new channel of classic Price is Right episodes from when Bob Barker was the host.  Around the same time I was watching that, there was this whole thing about how a Reddit group banded together to prop up the price of stocks like GameStop and AMC that big time Wall Street people were shorting.  A lot of these people made money and they fucked over Wall Street, so they kind of became folk heroes.

There is a common factor between a game show that's been on a long time and a group of people finding a way to make money and fuck Wall Street:  the search for competitive advantage.

In the Price is Right, the first thing people have to do after they "come on down" is bid against each other on some small prize.  Fairly quickly people worked out strategies to get an edge.  For instance if the top bid is $525, the last person might bid $526.  That way they have the highest bid and make sure the next-highest person can't win unless they are exactly on.  I always think that's lame but it works sometimes.

In one of the old 1982 shows there was kind of an embarrassing moment when one contestant bid $500--but someone else already had.  But before they realized this the next person was going to bid $600.  So they had to go back to the second person who bid $500 and she thought she could bid $601 and get the highest bid, but they had to inform her that the person after her's bid hadn't been counted yet.  So after she bid $600, guess what the person after her bid?  $601.  And she won.  So there you go.  

Conversely sometimes people only bid $1 because they figure everyone else is over and thus that way they ensure they don't go over.  But if you go the $1 route too early, someone else might bid $2 to screw you.

When it comes to spinning the big wheel they have a rule that the wheel has to go all the way around.  Why?  Because otherwise someone would barely nudge the wheel so they could get the $1 amount to win $1000 or whatever.

A couple years ago I watched a documentary about a guy who got the ultimate competitive advantage on the Price is Right.  He figured out that they used a lot of the same products over and over.  And rewatching the show you can see this is true.  I mean I watched one episode where in one game they had a popcorn popper for $56 and the next episode in a different game they had the same popcorn popper that was $56.  Or a few times they had Kraft Mac n Cheese and it's always 43 cents.  Anyway, this guy basically made a database of the products and when he went to the show he would help some of the players out and when he got on stage he won a bunch of stuff.

In the case of that guy and people who play cutthroat style by bidding $1 more or just bidding $1, it's not cheating.  It's just trying to give yourself a competitive advantage.  And really that's what the Redditors did.  They did what Wall Street itself has done for decades by finding a way to game the market and make it work for them.

The problem is finding the line between an acceptable competitive advantage and an unacceptable advantage.  Like athletes who use steroids.  The Patriots filming other teams's practices and "Deflategate."  Pyramid schemes like Amway or Herbalife.  These things might not be outright illegal so much as just sleazy and can do real harm to people--physically with steroids and financially with pyramid schemes.

I guess the difference is what you'd consider a "victimless crime."  The Price is Right examples aren't really hurting anyone.  Maybe you're denying someone else a chance to get on stage and play a game but it's not really hurting anyone.  The guy who figured out the prices is like someone who can count cards at blackjack:  if he was smart enough to make it work then more power to him.  And he helped other people win, so the only one who might have been hurt is the producers of the show who had to give more stuff away.  The Reddit stock thing it might have hurt some Wall Street millionaires.  Meh.  The only real damage might have been people who jumped in too late and didn't make money.

Anyway, searching for an advantage is something people have always done.  It's how we evolved and I doubt it's ever going to change.  The struggle for society is defining which competitive advantages are acceptable and which are not.