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[104] Walmart: Irrational behavior in the time of troubles. Irrationality of human behavior can be seen in
producers' response to markets facing the problem of
falling demand. There are many instances throughout
our modern history which show that when demand for a
commodity falls, the firm increases output! This not
only increases the speed at which the price of that
commodity will fall, but also tells us there is no
rational effort to control the market, free or not.
Between all the producers, prices should be manually
increased and inventories shrunk. This may seem like
it's advocating monopoly, but a “cartel” or a union
over an industry will minimize the need for the
inevitable government intervention, especially when it
concerns a “sensitive” group. Farmers for decades
have been paid by the U.S. government “not to farm”.
Ignorance amongst too many small independent producers
gives us the simplest view of irrational behavior in
the market. |
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