I can't remember if I told this story before, but in second grade, at my elementary school, I became fascinated with the school store and the supplies they sold. In the morning and at lunch there was always a line for supplies, and I was a frequent visitor because I was absent-minded and lost or forgot my pencils frequently.
I could buy 10 pencils for $1. But they only had several hundred. I imagined that, if I bought all of the pencils, the students would have to come to me to buy pencils and I could charge a profit. I set about collecting my allowance money, spare change and savings to execute my purchase of all the pencils.
On the morning of the purchase, I expected that I would buy all the pencils and stand by the store to re-sell them to desperate students for 25 cents each. The morning store hours were less popular, so I figured I would purchase all the pencils at the close or the morning hours, that way, when the long line for pencils formed at lunch, I would tell the students that they would have to buy from me, at $0.25.
The purchase went fine, but during my first period class I was called to the principal's office. He said, "I know what you're trying to do. It won't work. I can buy more pencils." He was kind in offering to buy back all the pencils I had bought. This is an example of imperfect information. I didn't know how easily I could be wiped out.
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