More than a year after it’s first available, the Nintendo Wii is still in shortage. Never available in the stores; prices skyrocketed on eBay. Plus many people now use all kinds of online Wii tracking software to try to make money from this unbalanced supply and demand.

The situation was even worse right before Christmas, when parents were trying their hardest to get Wii’s for their crying kids. The article “A Year Later, the Same Scene: Long Lines for the Elusive Wii” on New York Times described that many people waited in front of stores in Manhattan very early in the morning, usually long before they could see the sun.

Have been one of the them myself, I realized game theory can be applied here. Each buyer’s like an individual player of the game. And the game rule is that the earliest few players win Nintendo Wii’s. For each player, the dominant strategy is to show up as early as he/she can and wait in front of the stores since he doesn’t know what time his opponents would show up. Therefore, the Nash Equilibrium of the game is that everybody’s going to show up very very early, say 3AM, just like what was described in the article from New York Times.

So does this maximize the social welfare? John Nash says when everybody is doing the best for themselves, sometimes it’s not good for the society, and I agree with him. Let’s imagine a Non-Nash-Equilibrium of this game. Everybody can have a good sleep and come to the stores late, say 1PM, but in an exact same order of the previous case. Whoever gets Wii’s don’t change, and everybody’s better off because they get more sleep, which is always good, especially for college students.