When stocks are down 50%, many sell and run as fast as they can in the opposite direction. So many people were selling stock in Sept-Oct 2008 and buying bonds that bond yields went negative.
A store puts items on sale for 50% off and people trample (and kill) each other at the entrance of the store and then fight each other in the store to buy the items!
There is a confusion of cause and effect that happens in financial markets that makes the store analogy a poor one.
When people sell and run as fast as they can, that CAUSES the price to drop. People subsequently sell more and run faster reinforcing the crash.
The stock market doesn't go on sale because some owner needs to move his stagnant inventory of business equity. It goes on sale because people refuse to buy at the higher prices anymore. As they get burned by price declines, people generally want stocks less and less. If pricing based on the last transaction happened in stores the "sales" would very quickly evaporate.
You can't separate the price decline and the selling in financial markets. They are one and the same.
This is also why it makes sense that there was a shift into equities in April -June 2009 in the Vanguard report. Of course there was, that was part of the overall trend that was driving the prices up off the March 2009 low!
What I presented is not an analogy; it is a dichotomy. Stocks being down 50% was presented as an a priori condition so the people selling stock that I mentioned did not contribute to the initial 50% decrease. I was referring to the different behavior of some, not all, people presented with two items that are "50% off" - stocks and retail items.
Supply-demand curves regulate pricing in both the stock market and in retail stores/websites which is what you are discussing. That's not what I was focusing on.
Actually, many websites do base sales prices on the previous transactions. And websites adjust prices for individuals, as well. It's called dynamic pricing, you can Google it and find out more. Here is an article on dynamic pricing on Amazon
http://www.cio.com/article/2870961/consumer-technology/report-analyzes-amazons-dynamic-pricing-strategy.htmlHere is another article discussing pricing based on location, browser history, computer type (more likely browser type, Safari probably means Mac owner who will pay more), etc.
http://lifehacker.com/5973689/how-web-sites-vary-prices-based-on-your-information-and-what-you-can-do-about-itI've experienced it myself; although it was a while ago. I logged into Amazon and found the price for an item. Then, I logged out, cleared my browser cache, and went back to Amazon without logging in. The price was different (lower). So, I put it in the cart, then logged in, and was able to buy at the lower price. I haven't seen this recently so Amazon has gotten better at this. Now they have more ways to ID you besides browser cookies. Why do you think the ISP's rarely, if ever, change your IP address? Sure, it is a DHCP address, but it is what is called a static DHCP address. The DHCP server hands out the same IP address to the same MAC address every time. I'm referring to DSL and cable modems; I think phone modems still get random IP addresses. Does anyone remember phone modems anymore??? :-D
Also, the Black Friday sales, etc. do quickly evaporate because they only sell a "limited quantity" of items at the low, low sale price - thus the stampede. The store did not put those items on sale because they had stagnant inventory - it is to get customers in the door to "shop till they drop." More behavioral science at work. The after Christmas sales are to get rid of stagnant inventory and that's the best time to buy wrapping paper, Christmas lights, etc!