January 24, 2008
Economics Department
Market Failure in 22-inch Winter Wiper Blades?
Chicago just got hit with some more snow, and I realized I need new wiper blades on my car. The ones I have now are not winter blades, so ice builds up in the wiper frame and prevents it from applying even pressure, allowing ice and sleet to remain on the window.
My Camry bit the dust with serious engine problems about a month ago (my mechanic says it's a "spun bearing," but that sounds like something he made up), so I'm driving an old T-bird that a friend is loaning me. According to the books, it takes 22-inch wiper blades on both sides.
I haven't been able to find the blades. I stopped at three different auto parts stores, and all of them were out of 22-inch winter wiper blades. They had other blades, but not the ones I needed.
How can that happen?
I mean, obviously, winter blades are in demand because it's winter, and I'm guessing that 22-inches is one of the most common blade sizes, so people have been buying a lot of them, and the stores have run out.
But shouldn't the buyers at the auto parts store have realized that 22-inch winter wiper blades would be in big demand in Chicago in January? Shouldn't wiper blade manufacturers know the ups and downs of their business and ship a few extras to stores?
I see similar economic mysteries all the time. Why is it that the ice cream section of the 7-Eleven always has plenty of Butter Pecan but consistently runs out of Dulce de Leche soon after each new delivery? Shouldn't some computer somewhere notice what's going on and start ordering more Dulce del Leche and less Butter Pecan?
The theory of efficient markets doesn't require that businesses never make mistakes, but the free market does tend to doom businesses that consistently fail to take advantages of chances to make money. So what's going on here? Is this some weird kind of market failure? Or does it somehow make good business sense to run out of Dulce de Leche ice cream and 22-inch wiper blades?
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