Attention, People Buying Twinkies for $50 Online: The Twinkie Is Not Extinct

Quick reminder: The difference between liquidation and extinction is like the difference between a fire sale and an actual fire

Screen Shot 2012-11-17 at 8.13.50 PM.png

There are two reasons why you should pay $50 for a box of Twinkies online. First: You are the world's only Twinkie addict and the 7-11 is closed. Second: You are a billionaire sitting on a pile of money you've resolved to donate by the most bizarrely random means possible.

Since those are low-probability motivations for buying a sponge cake, I'm guessing that many of the people bidding $50 for a box of Twinkies think the liquidation of Hostess will spell the End of Twinkies, in which a dwindling supply of the soft golden food-bricks will drive up their market price.

Nice try, but this confuses liquidation for extinction. Hostess is going out of business. That means it's selling its assets, not setting them on fire.

The Twinkie will almost certainly survive when some company buys it as a distressed price in the Hostess fire sale and continues to produce the awful little snacks. Among the leading contenders: Kellogg, Campbell Soup, and Grupo Bimbo -- the parent company of Sara Lee, and Entenmann's, and other snacks only somewhat less artery-stuffing than a Twinkie.

On the other hand, I suppose a behavioral economist could cheekily point out that, since price has been shown to change "experienced pleasantness" (i.e.: we have a tendency to report that food tastes better when it's more expensive), the poor sap who spends $50 on a box of creme-filled starch-manufacturing might report the most delicious-tasting Twinkie in the world.

>

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Google Street View, Transformed Into a Tiny Planet

A 360-degree tour of our world, made entirely from Google's panoramas

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Google Street View, Transformed Into a Tiny Planet

A 360-degree tour of our world, made entirely from Google's panoramas

Video

The 86-Year-Old Farmer Who Won't Quit

A filmmaker returns to his hometown to profile the patriarch of a family farm

Video

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

Video

The Benefits of Living Alone on a Mountain

"You really have to love solitary time by yourself."

More in Business

Just In