EWOT Goggles #10

There are some times that I'm in the mood for a good infomercial. I'm always fascinated by the fact that the developers of such products featured in infomercials are able to create a desire for a product seemingly out of thin air. The root cause is that they solve the information problem of transaction costs. "A blanket with sleeves? Thats a ridiculous idea!" some might say. If they take a moment to think about it, however, they will likely remark, "I do really hate that my arms get cold when I'm reading a book..." Thus the value for Snuggies is born! This is a perfect example of supply creating its own demand. Informercials tend to point out issues that we didn't know we had. It is this strategy that allows the demand for products as "pointless" as the Snuggie to exist. The infamous $19.99 price tag of infomercial goods is usually low enough for the quantity demanded of these products to increase. Most people decide that solving the problem of cold arms due to the construction of the average blanket is worth about twenty dollars. The majority of people are willing and able to pay this price. Consequently, Snuggies are now a best-selling product.