<p>I think what you are looking for is known as <a href="https://en.wikipedia.org/wiki/Overselling" rel="nofollow noreferrer">overselling</a>.</p>

CC BY-SA 4.0
2020-07-01T08:50:56.653Z
2020-07-01T08:50:56.653Z
VARulle
<p>In economics, economies of scale are &quot;the cost advantages that enterprises obtain due to their scale of operation&quot; (Wikipedia/User:Loraof).</p>
<p>There is a common type of scaling, mostly in services, where the cost input is negligible, but users are in turn expected to use a small amount of the resource compared to the potential maximum they are provided. Good example includes Internet service providers or cloud storage providers, or banking if we go with traditional services. This allows a service provider to manage a small amount of resources which, if everyone utilized the maximum they could at a given time, would make the service or provider collapse.</p>
<p>What is the term, if it exists, for this type of scaling/economics?</p>

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2020-06-29T13:34:39.220Z
It's not an economic term, but "oversubscription"?
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CC BY-SA 4.0
2020-06-29T13:49:19.937Z
When it comes to banks, the term is “run on the bank” when everyone withdraws at the same time. People use “run on X” in similar contexts. There is a literature on bank runs.
Brian Romanchuk
CC BY-SA 4.0
2020-06-29T17:54:53.040Z
@user253751 This is indeed a relevant term, but I think it's mostly a negative word for companies that sell more than they should. I'm wondering if there is a neutral or even positive term for this type of economy or business model (it's not new after all).
Ynhockey
CC BY-SA 4.0
2020-06-29T17:55:42.893Z
@BrianRomanchuk True, but what about the business model itself? Is there a word for that?
Ynhockey
CC BY-SA 4.0
2020-06-29T19:40:13.713Z
You are the only person I am aware of who has ever drawn a link between bank runs - which have been extensively studied - and things like cloud storage services. Although I guess they can be lumped under “oversubscription issues,” I think there’s a huge practical difference between those situations. It is very hard to see why economists would be concerned about hypothetical overruns in cloud storage capacity.
Brian Romanchuk
CC BY-SA 4.0
2020-06-29T21:46:40.310Z
@BrianRomanchuk Frankly I'm less interested in banks specifically, more in tech. The idea behind the business model is the same though, I didn't know it was a novel idea. However, I would just be surprised if economists never coined a term for this business model, which is going to be used more, the more services go virtual – and has very real economic implications.
Ynhockey
CC BY-SA 4.0
2020-06-29T21:52:29.147Z
@Ynhockey Probably, "oversubscription" only comes up as a term when it goes wrong, which is why it has a negative connotation. (That, and "over" suggests "too much")
Criticize SE actions means ban
CC BY-SA 4.0
2020-06-29T21:53:55.583Z
@BrianRomanchuk Economists might not care about cloud storage runs (which don't exist, anyway) but I'd expect them to come up with some sort of theoretical model for oversubscribing things like this. (and telecommunications engineers to come up with a completely different model for oversubscribing flows of things)
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<microeconomics><economies-of-scale>
Term for partial resource use economics
Ynhockey
# Term for partial resource use economics

(Asked by: username_0 on 2020-06-28)

In economics, economies of scale are "the cost advantages that enterprises obtain due to their scale of operation" (Wikipedia/User:Loraof).

There is a common type of scaling, mostly in services, where the cost input is negligible, but users are in turn expected to use a small amount of the resource compared to the potential maximum they are provided. Good example includes Internet service providers or cloud storage providers, or banking if we go with traditional services. This allows a service provider to manage a small amount of resources which, if everyone utilized the maximum they could at a given time, would make the service or provider collapse.

What is the term, if it exists, for this type of scaling/economics?

**Tags:** microeconomics, economies-of-scale

> **Comments:**
> **username_1**: It's not an economic term, but "oversubscription"?  
> **username_2**: When it comes to banks, the term is “run on the bank” when everyone withdraws at the same time. People use “run on X” in similar contexts. There is a literature on bank runs.  
> **username_0**: @user253751 This is indeed a relevant term, but I think it's mostly a negative word for companies that sell more than they should. I'm wondering if there is a neutral or even positive term for this type of economy or business model (it's not new after all).  
> **username_0**: @BrianRomanchuk True, but what about the business model itself? Is there a word for that?  
> **username_2**: You are the only person I am aware of who has ever drawn a link between bank runs - which have been extensively studied - and things like cloud storage services. Although I guess they can be lumped under “oversubscription issues,” I think there’s a huge practical difference between those situations. It is very hard to see why economists would be concerned about hypothetical overruns in cloud storage capacity.  
> **username_0**: @BrianRomanchuk Frankly I'm less interested in banks specifically, more in tech. The idea behind the business model is the same though, I didn't know it was a novel idea. However, I would just be surprised if economists never coined a term for this business model, which is going to be used more, the more services go virtual – and has very real economic implications.  
> **username_1**: @username_0 Probably, "oversubscription" only comes up as a term when it goes wrong, which is why it has a negative connotation. (That, and "over" suggests "too much")  
> **username_1**: @BrianRomanchuk Economists might not care about cloud storage runs (which don't exist, anyway) but I'd expect them to come up with some sort of theoretical model for oversubscribing things like this. (and telecommunications engineers to come up with a completely different model for oversubscribing flows of things)  

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## 1 answers

### Answer by username_3 on 2020-07-01. Score: 2

I think what you are looking for is known as [overselling](https://en.wikipedia.org/wiki/Overselling).


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