Pikachu is a yellow mouse and the internationally-recognized mascot of the Pokémon Franchise. Pokémon’s beginning was a game and disconnected (“Pocket Monsters”) playing cards decades ago. Over time, it has spawned a TV series, a monopoly game, and a worldwide card collection fever. The tangible cards are now an ersatz currency to reward chore completion, trade for other cards, cash, and bitcoin. Bartering lives, and the card collection fever illustrates Austrian economics.
Cards come in retail packs or themed collections of packs. A broad distribution network of brick-and-mortar locations like ACE Hardware, Kroger Foods, and Barnes and Noble retails the product to “trainers” who purchase, collect, and trade cards, in the school yard or on the internet. Digital sites eBay and Amazon collect a retail premium for sales; markups vary greatly.
“Drops” occur when the manufacturer releases a themed collection of new and previously issued cards. The exact contents are unknown. Eighteen-year-olds and grandparents (like me) stand in line before Target or Best Buy opens on the mornings of a drop to purchase from a finite stock, often limited to one special box per person.
A figure from the Pokémon world’s nine Kingdoms is on most cards. Within the regions there are eighteen types of Pokémon: water, fighting, electricity, psychic, poison ice, fire, and so on. Charizard is a winged fire breather from the Jonto Kingdom. What is the price of a “common” Charizard Pokémon card? Maybe it is $37.00 if it is an earlier release which gained value over time. A third-party service may grade the print quality highly, increasing perceived value.
Determining “prices” of Pokémon Cards injects the concept of barter as a compensation tool. You might be able to purchase or trade cards you have for one held by other Pokémon trainers. This could happen at card shows, or specialty game card sections of hobby stores, or on the internet, or at school.
Card trading meets the requirements of Menger’s price theory. Two or more mutual beneficiaries, freely engage within a wide range of the value or utility of the goods traded. Price emerges from subjective valuation, where a buyer and seller with different estimations of a good’s utility find a mutually beneficial, “economizing” exchange point within that (wide) range.
In Poke-speak, you can trade your duplicates of Gengar and Raichu for my Pumpkaboo to complete your twenty-four card Halloween set of all regions “Dark” cards, if a complete set is valuable to you. Jevons was a contemporary of Carl Menger. Jevons identified the necessity of a double convenience in any exchange,
The first difficulty in barter is to find two people whose disposable possessions mutually suit each other’s wants. There may be many people wanting, and many possessing those things wanted; but to allow of an act of barter there must be a double coincidence, which will rarely happen.
Card shows, the internet, and card stores routinely host exchanges for the double coincidences to occur. If one of the trade elements is currency a double convenience will still exist because the dollar value is not absolute but informative.
In both exchanges there is little need for trust as the exchange is immediate and physically verifiable. The absence of currency in a card barter does not indicate a need for one. There is no official price list that suggests a charge of $10.00 being reasonable or required. Warren Buffett has opined, “Price is what you pay, value is what you get.”
There are services that try to keep track of card values by aggregating voluntarily-reported sales. A ten-dollar bid could be rich or inadequate depending on the buyer’s view of the cards’ value, offered by the seller in that time and place. This is an example of Hayek’s decentralized, local, and practical information, held by even nine-year olds.
Arbitrage on internet card trades is pervasive and immediate. There was a new drop months ago. I waited in line with twenty-nine of my closest personal friends for our local Target to open to buy a box for my grandson.
I was eighth in line. Niantic distributed limited quantities stock in three area stores, and instructed retailers to sell only one specialty box per customer. The first person in line scouted the number of boxes at the counter and relayed the number available down the line.
A shopper from the end of the line came up and offered me a “tip” if I would buy the release for him. This is an example of local limited knowledge that the retail price of $59.00 was worth $79.00 to another buyer. That $79.00 dollar box could be kept or resold for a profit. Two shoppers ahead of me asked if I were just buying a box, would I buy individual card packs for them. An unopened packet of cards routinely trades at twice the retail cost after 3 months.
Pokémon cards do not deteriorate, requiring an exchange for something else to preserve value over time. Some buyers in line see Pokémon cards as an asset and never open the packages, increasing their worth over time on what monsters they might have. Comparisons of Pocket Monster cards to vintage wines which may never be uncorked or consumed but drive soaring prices to possess.
