Queueing

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Definition

Queueing is a form of non-price competition where potential buyers stand in a waiting line/queue (physical or virtual) in order to get access to a scarce good or service. It occurs when the stated price of the good or service is at a level where demand exceeds supply.

Causes of queueing

Excess demand due to inability of prices to adjust

Queueing typically occurs in a case of excess demand because prices are unable to adjust to market-clearing levels due to sticky prices, price ceilings or other factors.

A deliberate choice by suppliers

In some cases, producers/suppliers may deliberately maintain shortages and not raise prices in order to make the good appear more attractive. Some possible advantages of queueing are:

  • By queueing, producers/suppliers may be able to get a profile of customers who may be better for them in the long run.
  • Standing in a long queue itself makes people buy more: There are often a lot of items for impulse purchase at the checkout counters in supermarkets, so the longer people have to stand in queue, the more such purchases they may make. Similarly, people on a waiting list for a good sold through a website may check the website more frequently, and may as a result make many other auxiliary purchases.

More fairness

Standing in line may be considered a fairer way of distributing resources among people with varying degrees of wealth, compared to charging a high price. This is particularly true for goods that are highly valued by all, but for which wealth effects make it much easier for the rich to purchase them. This includes, for instance, goods such as education and health care.