5 ms·

Prices being elastic is good for people, in a vast majority of cases. It makes sure things get distributed more or less proportional to need, as opposed to just

Prices being elastic is good for people, in a vast majority of cases. It makes sure things get distributed more or less proportional to need, as opposed to just random or worse than random. Case in point: I luckily found some hand gel still for sale online. Probably the very last one around here. So I stocked up - not resale quantities (thought it would have been trivial) but definitely more than I needed - something like 10 pieces. Why? Because the price was low and I'm doubtful I'll get to see any more this year. If the price had been even slightly elastic, I wouldn't have bought 10 pcs for $10 each. I would have probably spent about the same, and gotten 2 or 3. Even better, I would probably still be able to get it from the groceries store, without any shortage - and buy just one as needed. So we have two scenario: if the prices stay the same some people stock up early, and most are left without. If the prices go up proportionally, we end up spending a trivial amount more (let's be honest, spending an extra $7 on hand gel is not a tragedy) but we have no supply problems. First because there is much less stocking up, and then because everybody is incentivised to produce and sell more.

ghshephard 7y ago
"I'm doubtful I'll get to see any more this year." - I'll take that action. All of the consumable that people have been panic buying - toilet paper, hand gel, etc... have experienced absolutely zero supply shock, and, indeed, most of the manufacturers are going to be delighted to draw down their inventory and get a boost this quarter. I'll be extraordinarily surprised if shelves aren't completely full of those consumable within 7-10 days. People are strange - the fact that there was a global pandemic coming at us was pretty obvious as of early march, but it was this weekend that everyone decided to panic? It's not as though this were a hurricane that just landed on us by surprise. I fully support the price gouging laws - it discourages these yahoo's from buying up all of the supplies and sticking it in their garage and depriving people over the weekend who might need a container.
- sneak 7y ago
  > I'll be extraordinarily surprised if shelves aren't completely full of those consumable within 7-10 days. Then why do we need any price-gouging laws? Who is harmed without them, if the supply remains intact?
  - georgemcbay 7y ago
    People with short term need? 7-10 days is a long time to go without some things like food, cleaning supplies (particularly in time of pandemic), masks for those who actually need them like healthcare workers on the front lines, etc.
    - gwright 7y ago
      Have you noticed that the shelves are empty? The price gouging laws don't help that situation they create that situation. How are empty shelves better than the items available for 2x, 3x or even 5x the regular price for a short period of time?
      - ghshephard 7y ago
        People who price gouge are highly incentivized to go buy all the stock in a community and resell it on the internet. That guy in the NYT article essentially drove to all these out of the way places and cleaned out their stock. Allowing price gouging would not result in more of that stock being available on the shelves - responsible retailers and distributors know better, and behave better than that - they make all of their available stock, and when they run out - they run their factories at 100% to try and catch up. Note - I have zero issue with ticket scalping - love the fact that there is a free market where people can buy and sell tickets at the price the market can bear. Also have zero issue with a free market in general - it encourages new suppliers to come in when prices go up, and consumers to find relative substitutes - things find an equilibrium. What I have a problem with is people taking advantage of an emergency or shortage, in such a way that further increases the shortage of items that are critical to people's health and well being, people who may not be able to afford to go out an pay 10x prices on amazon for something like a mask or hand cleaner.
- illumin8 7y ago
  > People are strange - the fact that there was a global pandemic coming at us was pretty obvious as of early march, but it was this weekend that everyone decided to panic? It's not as though this were a hurricane that just landed on us by surprise. Human behavior doesn't make a lot of sense, but up until a few days ago, the media and the federal government in the US were completely downplaying the seriousness of Covid-19. Many of us who have been warning our close friends and family about this for weeks have been assumed to be paranoid or crazy, but actually we learned this week that the media and government were intentionally downplaying it.
bouk 7y ago
You're justifying your own unethical behavior by painting yourself as a rational economic agent, when you could also just not buy more than necessary and leave some for other people.
- gwright 7y ago
  Sigh. The fact remains that perfectly rational actors have concluded that they may not want to be shopping for the next two, three, or four weeks. That means purchasing more now for your own completely rational use. If everyone does that at the same time, you'll have a shortage. One thing that might limit the shortage is higher prices, as it makes people purchase less, and incentivizes production and delivery. One thing that most definitely will not help the shortage is limiting the price increases (i.e. price gouging laws).
- radu_floricica 7y ago
  Except, and I'm answering to @illumin8 as well, you really can't find hand gel anymore, not here at least. It may bounce back in time, or only in a few months. And if you call buying 10 pieces unethical behavior... really.

ghshephard 7y ago

"I'm doubtful I'll get to see any more this year." - I'll take that action. All of the consumable that people have been panic buying - toilet paper, hand gel, etc... have experienced absolutely zero supply shock, and, indeed, most of the manufacturers are going to be delighted to draw down their inventory and get a boost this quarter. I'll be extraordinarily surprised if shelves aren't completely full of those consumable within 7-10 days. People are strange - the fact that there was a global pandemic coming at us was pretty obvious as of early march, but it was this weekend that everyone decided to panic? It's not as though this were a hurricane that just landed on us by surprise. I fully support the price gouging laws - it discourages these yahoo's from buying up all of the supplies and sticking it in their garage and depriving people over the weekend who might need a container.

sneak 7y ago
> I'll be extraordinarily surprised if shelves aren't completely full of those consumable within 7-10 days. Then why do we need any price-gouging laws? Who is harmed without them, if the supply remains intact?
- georgemcbay 7y ago
  People with short term need? 7-10 days is a long time to go without some things like food, cleaning supplies (particularly in time of pandemic), masks for those who actually need them like healthcare workers on the front lines, etc.
  - gwright 7y ago
    Have you noticed that the shelves are empty? The price gouging laws don't help that situation they create that situation. How are empty shelves better than the items available for 2x, 3x or even 5x the regular price for a short period of time?
    - ghshephard 7y ago
      People who price gouge are highly incentivized to go buy all the stock in a community and resell it on the internet. That guy in the NYT article essentially drove to all these out of the way places and cleaned out their stock. Allowing price gouging would not result in more of that stock being available on the shelves - responsible retailers and distributors know better, and behave better than that - they make all of their available stock, and when they run out - they run their factories at 100% to try and catch up. Note - I have zero issue with ticket scalping - love the fact that there is a free market where people can buy and sell tickets at the price the market can bear. Also have zero issue with a free market in general - it encourages new suppliers to come in when prices go up, and consumers to find relative substitutes - things find an equilibrium. What I have a problem with is people taking advantage of an emergency or shortage, in such a way that further increases the shortage of items that are critical to people's health and well being, people who may not be able to afford to go out an pay 10x prices on amazon for something like a mask or hand cleaner.
illumin8 7y ago
> People are strange - the fact that there was a global pandemic coming at us was pretty obvious as of early march, but it was this weekend that everyone decided to panic? It's not as though this were a hurricane that just landed on us by surprise. Human behavior doesn't make a lot of sense, but up until a few days ago, the media and the federal government in the US were completely downplaying the seriousness of Covid-19. Many of us who have been warning our close friends and family about this for weeks have been assumed to be paranoid or crazy, but actually we learned this week that the media and government were intentionally downplaying it.

bouk 7y ago

You're justifying your own unethical behavior by painting yourself as a rational economic agent, when you could also just not buy more than necessary and leave some for other people.

gwright 7y ago
Sigh. The fact remains that perfectly rational actors have concluded that they may not want to be shopping for the next two, three, or four weeks. That means purchasing more now for your own completely rational use. If everyone does that at the same time, you'll have a shortage. One thing that might limit the shortage is higher prices, as it makes people purchase less, and incentivizes production and delivery. One thing that most definitely will not help the shortage is limiting the price increases (i.e. price gouging laws).
radu_floricica 7y ago
Except, and I'm answering to @illumin8 as well, you really can't find hand gel anymore, not here at least. It may bounce back in time, or only in a few months. And if you call buying 10 pieces unethical behavior... really.