Game Theory in Black Friday Shopping during a Pandemic
Black Friday is an event that occurs annually the day after Thanksgiving where the majority of stores have low prices on all of their products. As a result of these low prices, the crowds in these stores tend to be high. Since stores typically open around 7am, some individuals camp out outside stores overnight in order to be the first ones in the stores. Being the first ones in the store allows them to make sure that they get the product and also get the best deal. According to the New York Times article listed below, “The Centers for Disease Control’s list of higher-risk activities for spreading Covid-19 includes “going shopping in crowded stores just before, on, or after Thanksgiving” (Maheshwari). Shoppers on Black Friday in 2020 were faced with the dilemma of if they should participate in Black Friday Shopping. Participating in Black Friday Shopping would mean they could get gifts for their family and friends for lower prices than if they bought them during Christmas time, but they risk exposing themselves to COVID-19. Also, some stores even run out of products by the afternoon on Black Friday or they raise their prices if they realize they have a high demand with low supply throughout the day. Therefore, customers are also faced with the dilemma of making sure they get to the store before other customers so that they can definitely get the product that they want.
Let’s say for example hypothetically that Person B has an 11-year-old son who has been begging for a new Xbox. However, because of how expensive it is, Person B has been unable to buy it for him. On Black Friday let’s say, hypothetically, that the price of the xbox decreases from 200 to 50 at GameStop. However, hypothetically, GameStop only has 50 xbox’s so when GameStop only has a few left, the price increases to 100. Person B is debating if he should risk getting exposed to COVID-19 to get the xbox for his son and go black Friday shopping, or if he should stay home and go to GameStop a different day when it is less crowded, even though the price will increase. Person A is having the same dilemma because he also wants the xbox for his son, but is scared to be in a small room with a high number of people. However, since Person A and Person B do not know each other, they are not able to know which option each other choose so therefore there is randomization and a mixed strategy equilibrium. Neither Person A nor Person B have a dominant strategy because if they both go Black Friday Shopping, they both get the xbox, however they are both exposing themselves to COVID-19 so there isn’t one choice that they know that they should pick regardless of what the other Person does. If neither of them go Black Friday Shopping, they don’t expose themselves to COVID-19 but they have to buy the xbox for a higher price. If only Person A or only Person B goes Black Friday Shopping, the individual that goes out would have a higher payoff because it would mean there is one less Person in the crowded Black Friday Store and they get to buy the xbox for the lowest price, but that would mean there is one less xbox for the Person who didn’t go Black Friday Shopping.
As a result of the increase in COVID-19 Cases recently, one can assume that the 2021 Black Friday Shopping will occur similar to 2020 Black Friday Shopping and customers will be faced with the same dilemma.
https://www.nytimes.com/live/2020/11/27/business/us-economy-coronavirus