Hoarding
Centralized storage in business concentrates reserves in single accounts or locations.
Centralized storage reduces costs but concentrates risk.
Centralized storage accumulates resources in a single defended location. Hamsters store seeds in burrows, bees store honey in hives, ants store food in colonies. Advantages: low memory cost (one location), defensible (can guard central location), low retrieval cost (no travel). Disadvantages: high single-point failure risk (burrow flooded = total loss, hive destroyed = colony dies), limited by storage capacity.
Business Application of Hoarding
Centralized storage in business concentrates reserves in single accounts or locations. Use when single-point failure risk is low (strong institutions with FDIC insurance), coordination costs matter more than risk reduction, or scale advantages provide better terms.