How should we define "rarity"?

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Question: 

Hi there,

Okay, so this is going to be a really stupid question but I need to know the answer to this. There is a message board about collecting video games and we got into a argument about the definition of the word "rarity." With these games, we all know the exact amount of copies printed for each title. Say Game A has 2000 copies printed and Game B has 5000 copies printed. Assuming that no copies are lost or destroyed, Game A will always be rarer, correct? Someone else is arguing that the availability of copies on the secondary market changes this.

If Game A has 20 copies available on the marketplace right now and Game B only has 2 copies, would Game B be considered to be rarer overall? At that moment in time, sure, but overall, I would say no. Are either of us correct? Would the monetary value of the game on the secondary market change the definition of rarity? Thanks for your time!

Answer: 

In the strictest (or standard) sense of the word, you would be correct that game A is “rarer”, given that there are fewer of these in existence than game B. However, the other person is not totally wrong because, in the words of economists, the “quantity supplied” of game B is less than that of game A.

Having said that, if either of you are interested in the value ascribed to an individual unit of either games based on the "rarity" of the game (which I suspect is the real source of contention in your debate), then you are both missing a crucial dimension of the conversation (though you seem to be going in that direction at the end). You are both looking at different aspects of the supply side of the market and are completely ignoring the demand side. Both supply and demand are critical in determining the value a society ascribes to a given item; hence we call the bedrock model in economics the supply and demand model.

If you were to press me on the “right” definition of rarity, I would be forced to say that my son's daily pieces of one-of-a-kind artwork are all much rarer than both games A and B. But you wouldn't care that my son’s artwork is extremely rare. And I wouldn't’t blame you at all because value is certainly not determined exclusively by how rare an item is, no matter how we choose to define the term “rare”.

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Last updated on November 9, 2017