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> I'm not sure what the solution is though. The solution is pretty obvious, require that companies don't raise prices during a disaster. That might mean they d

> I'm not sure what the solution is though. The solution is pretty obvious, require that companies don't raise prices during a disaster. That might mean they don't quite maximize profits, but it also gives everyone a shot regardless of their wealth. Anti price gouging laws are pretty common and are nearly universally popular.

jstanley 9y ago
> it also gives everyone a shot regardless of their wealth No, it doesn't. It means there's no incentive for entrepreneurs to go to great lengths to increase the supplies of (e.g.) bottled water during a disaster. It doesn't mean everyone gets what they need, it means only the first few people get what they need.
- jonknee 9y ago
  And yet businesses in the real world are working hard to increase supply of these very goods right now just so that they can sell them at a regular price. Some companies even give away stuff like bottled water, what's the economic explanation of that? tl;dr left out of your economic models are things like good will and civic pride.
  - darawk 9y ago
    They're not working as hard as they would be. And there are no new entrants to the market. Sure, companies might, on their own good will, work hard to deliver more water bottles. But if people are buying water bottles for $100 a pop, i'm gonna drive over there myself with a case of Arrowhead, and i'd bet so are you. High prices motivate people who wouldn't otherwise involve themselves to provide the supply. This is the essence of a market. Markets abhor an arbitrage opportunity, and price gouging is an arbitrage opportunity.
rwallace 9y ago
Being lucky enough to be first in the queue doesn't make you more morally deserving any more than being lucky enough to be rich. Worse, making it illegal to raise prices constrains supply so that a lot fewer people can be helped. I'm not saying that absolutely everything should necessarily be allocated by price. Making it illegal to allocate things by price makes sense in the case of something like land whose supply is inelastic. If you want to say the price of land should be controlled and nobody should be allowed more than their fair share, okay; it's not like a price increase will allow more to be supplied. But clean water and airline seats have an elastic supply, and outlawing allocation by price means there will be less to go around.

jstanley 9y ago

> it also gives everyone a shot regardless of their wealth No, it doesn't. It means there's no incentive for entrepreneurs to go to great lengths to increase the supplies of (e.g.) bottled water during a disaster. It doesn't mean everyone gets what they need, it means only the first few people get what they need.

jonknee 9y ago
And yet businesses in the real world are working hard to increase supply of these very goods right now just so that they can sell them at a regular price. Some companies even give away stuff like bottled water, what's the economic explanation of that? tl;dr left out of your economic models are things like good will and civic pride.
- darawk 9y ago
  They're not working as hard as they would be. And there are no new entrants to the market. Sure, companies might, on their own good will, work hard to deliver more water bottles. But if people are buying water bottles for $100 a pop, i'm gonna drive over there myself with a case of Arrowhead, and i'd bet so are you. High prices motivate people who wouldn't otherwise involve themselves to provide the supply. This is the essence of a market. Markets abhor an arbitrage opportunity, and price gouging is an arbitrage opportunity.

rwallace 9y ago

Being lucky enough to be first in the queue doesn't make you more morally deserving any more than being lucky enough to be rich. Worse, making it illegal to raise prices constrains supply so that a lot fewer people can be helped. I'm not saying that absolutely everything should necessarily be allocated by price. Making it illegal to allocate things by price makes sense in the case of something like land whose supply is inelastic. If you want to say the price of land should be controlled and nobody should be allowed more than their fair share, okay; it's not like a price increase will allow more to be supplied. But clean water and airline seats have an elastic supply, and outlawing allocation by price means there will be less to go around.