Price Gouging Laws: Allocating Goods in An Emergency To People Who Have Nothing Much Valuable to Do
During an emergency like a hurricane, many different categories of goods and services experience supply-demand shocks. The shock may be because of a fall in supply (e.g. oil companies can't get gasoline into the area) or a spike in demand (e.g. for generators or plywood) or a combination of both. In a free market, prices will rise to help match supply and demand. Higher prices cause people with less valuable or more frivolous uses of the scarce goods to defer purchase, and can cause suppliers to expend extra effort to get product into the area, even diverting supplies from other areas.
When the government institutes price gouging laws in an emergency, the supply-demand mismatch that leads to the rising prices isn't magically eliminated. First, without higher price incentives, all the incentives to get more supply into the area are lost. Supply and demand under these regulations can only be matched by rationing demand, and typically this is through queuing and increasing search costs (e.g. driving around all over the place looking for a station that is open and has gas). People who gain the limited supplies in this regime are thus those with a lot of time on their hands, where the marginal cost of queuing and driving around does not impose a lot of cost. Think about a roofer scrambling to repair roofs after the a storm -- do they have time to have their trucks and crews sitting dormant in gas lines? Thus, price gouging laws tend to ensure that scarce goods in an emergency flow to those with the least use for them.
Because if he charged for rescues he would probably get arrested or at least get his reputation ruined on national television.
cc: at least get his reputation ruined on national television.
What is the value of his reputation? He's already said he won't bother to save people unless he is paid. Reputation is free speech, in any case.
So you were being a pedantic ass? It is a colloquialism. - nothing was incorrectly stated you just chose to be a jerk about it. Note that i purposely gave a nive response back to you and you decided to double down.
cc: Many people cannot volunteer for an extended period because they will
get fired for being absent or make no money if self-employed.
Sure. One can't be expected to donate what one doesn't have in sufficient supply; whether time or money or proximity.
I tried to make a joke about the colloquialism. Obviously it fell flat.
"And if the stations run out of gas later, is Joe Consumer tempted to sell some of his surplus at an outrageous price?"
I've never heard of cases of hoarders selling back into the market after a natural disaster.
If his state has a price gouging law, your hoarder would be as guilty as the gas station if the gas station raised it's prices. Anything else would defeat the purpose of the price gouging law.
Without a price gouging law, an after the fact hoarder will have no room for profit.
All true, and I agree. But what consideration ought to be given to maintaining public order, to twit: There are 100 people who really need water, and only 200 water bottles available. Should 10 people "be allowed" to buy the entire supply at $10 per bottle, and leave the other 90 people without any water? Certainly the laws of supply and demand allow for this to happen. BUT, the laws of survival also, it seems to me, allow a parent with a child who is seriously in danger of heat stroke to confiscate the water the child reasonably needs. That quickly devolves into violence. So, to the extent that rationing improves public order during a crisis, I'd have to say I'm for it.
I saw the harmless humor and snickered, but being Irish I look for humor.
Life is too short, help make someone smile..... it might just make their day.
Well done sir, ... Carry on. ;)