Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Stock Market drink pricing system

  1. Sep 15, 2010 #1
    I'm fascinated by this new concept:

    Youtube video : Using a Stock Market System for your Drink Pricing

    And on the blog "The Drink Exchange"

    The Drink Exchange is a stock market drink pricing system. The drink prices are displayed on TV monitors around the bar and the prices change based on demand. The Drink Exchange increases the bars revenue and customer base.

    Read more ... Drink Exchange

    And here ... Thread: Investors

    Someone replied: only works in states that allow happy hour. mine doesn't

    Could this concept work in your city, State or Province? Why? Why not?
  2. jcsd
  3. Sep 15, 2010 #2
    No it would not work in PA or Utah. Alot of states regulate drink specials. The concept is that you cannot intice people to drink more than they would otherwise. Most states require promotions be approved by the LCB, or whatever your state calls it.

    Though most states allow private clubs like Firehouse Bars and others to do things that commerical bars cannot. That is how they can have events that allow unlimited beer and food for a fixed price.
  4. Sep 16, 2010 #3


    User Avatar
    Staff Emeritus
    Gold Member

    I don't see why this should be illegal. In California, you can't give away for free more than 1 oz. of liquor, but I don't know of any restrictions that prevent prices from dropping to meet low demand. We did that all the time when I used to manage a bar in Long Beach a few years ago. Distributors were always giving us free bottles of something new they were promoting, and when nobody was buying it, we had a center shelf we kept all these bottles on and any drink containing them was $1, far lower than the price of anything else. Heck, sometimes the owner's son and I would just take bottles home and drink them ourselves because they still wouldn't move.

    I do see a major problem with an auction exchange working, though: the seller is almost never present. How many bar owners are are the bar during all open hours to personally negotiate prices with potential buyers? People can bid high or low all they want, but what is the basis for bids being accepted? Do they simply start with a high bid and continue lowering until someone purchases? How the heck could that work? You've got five kegs or so of Bud Light. The whole bar can simply refuse to bid until the price drops to $0.10 or something. What's the incentive to bid higher? It's not like there's insufficient supply for everyone to get a drink. People only bid when multiple buyers want the same item. Bars don't only offer one of each drink. They tend to keep enough on hand to satisfy every possible customer for at least one week.
  5. Sep 16, 2010 #4
    Suppose a bar (or a sports bar) sells: Beer A, Beer B, Beer C

    The more people buy Beer A, the more its price will rise, causing the prices of Beer B and Beer C to in this alcoholic stock market to fall.

    People will rush to buy Beer B and Beer C, hence causing their prices to rise.

    In this system, one has to set the initial prices and minimum prices to avoid loss due to "market dynamics"

    I'm excited to see this system used during the Happy Hours and Football or Hockey seasons, where people are more in the mood for betting, hence will be inclined such a pricing-scheme.
  6. Sep 16, 2010 #5
    I don't see the point; drink prices are already set this way :tongue:
  7. Sep 16, 2010 #6
    Well, no.

    As in the regular Stock Market game, people watch on screens the prices of commodities go up or down, in a bar that adopts the system, the screens will be located above the bar listing the drinks menu along side their prices. And, the game would be to watch each drink price rise and fall and invest in your beverage at just the right time.

    I guess when the market crashes the bar owner will send a signal (bells, whistles and light effects) which would motivate the patrons to invest more, that is, buy more drinks.
  8. Sep 17, 2010 #7
    As in the regular Stock Market game, let's introduce the (exotic) financial instruments: Arbitrage, derivatives and futures.

    We would expect to find customers arbitraging ... I know I would try.

    An arbitrage opportunity is the opportunity to buy an asset at a low price then immediately selling it on a different market for a higher price.

    Read more ...

    Derivatives: Definition

    Futures : Definition

    Could you offer suggestions as to how to apply these financial instruments to the bar?
Share this great discussion with others via Reddit, Google+, Twitter, or Facebook