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IANAL (or economist), but I'd say price gouging is when hoarders raise prices to profit from artificial shortages that they created. As a people, we did not ru

by ken 6y ago

IANAL (or economist), but I'd say price gouging is when hoarders raise prices to profit from artificial shortages that they created. As a people, we did not run low on hand sanitizer. As a free market, we ran low on hand sanitizer because a small minority decided they needed 10,000 bottles in their garage. When there exists plenty of product for everyone, and there are distribution networks by which we can get it to everyone who needs it, and yet opportunists insert themselves in the middle for no purpose other than to make a quick buck, I call that price gouging.

javagram 6y ago
I’m pretty sure we actually did run low on hand sanitizer. Yes, there were some hoarders, but people also started buying and using a lot more sanitizer, the supply chain was overwhelmed. Companies didn’t have huge excess warehouses of the stuff ready to ship when demand suddenly spiked over the period of a few days.
- Raidion 6y ago
  I think he's referring to the feedback loop that hoarding causes. If you're confident you'll be able to buy the good in the future, you'll buy less now. If a hoarder clears out the supermarket, that means that everyone that shops at that supermarket and doesn't get what they want is more liable to make a larger purchase when do find it at another store. This chain reaction leads to shortages. It's impossible to prove the direct amount of causation (and of course organic demand spiked), but the relationship is clearly there.
  - chrischen 6y ago
    I think he's specifically referring to the hoarders being the cause of the price increase in the first place and profiting off of their hoarding (correct me if I'm wrong). But that's definitely not the case with most shortages of things like PPE and alcohol. Most people are calling any price increase gouging, to the point where sites like eBay have simply banned anyone from selling masks at marked up prices. However they grandfathered some pre-existing sellers. Ironically this created a monopoly situation that has constrained supply which by definition means ebay is price gouging (since they make a percentage based fee on sales). If they simply let new sellers "price gouge", it would flood the supply and naturally lower prices for things like masks on eBay.
  - javagram 6y ago
    Sure, but people also just used up what they had. I had a box of mini hand sanitizer in the closet i purchased 2-3 years ago, I brought it out at the beginning of march and began to use it. I ran out and there was no more to be found in any store. Still have only seen it once or twice in a store, behind the counter now 2 months later. Even if we had all just tried to buy 1 bottle of hand sanitizer each that would have been 330 million bottles, I don’t think store shelves had that many in march. (Edit: It’s the same thing as happened to stuff like toilet paper - we usually make just enough toilet paper for everyone, between commercial and retail toilet paper sales. Suddenly commercial toilet paper became unsaleable with industries shuttering their doors, and the existing supply of home toilet paper wasn’t enough anymore since now all the bum-wiping that would have been done with commercial toilet paper needed to be done with the different rolls that are sold to home goods buyers)
deathgrips 6y ago
Wrong. Demand for hand sanitizer increased because people thought the world was ending and hand sanitizer would save their lives. Hand sanitizer went from a tool that marginally increased your health to a tool that many believed would save their lives. If you can't call this a genuine rise in demand, I'm not sure what you could call a rise in demand. I haven't seen any real data that the effect of middlemen was anything but tertiary. Hospitals and governments buying up truckloads of hand sanitizer had a greater effect on the market than middlemen.
vmception 6y ago
> IANAL (or economist) And true to form, your following statement was not what lawyers or economists would call price gouging. As with most things, there is the colloquialism, and then there is the law. Price gouging laws are almost impossible to run afoul of, because thats not how this country is run. There are limited temporary state-controlled market disruptions, activated by a State of Emergency declaration.

by ken 6y ago

javagram 6y ago

I’m pretty sure we actually did run low on hand sanitizer. Yes, there were some hoarders, but people also started buying and using a lot more sanitizer, the supply chain was overwhelmed. Companies didn’t have huge excess warehouses of the stuff ready to ship when demand suddenly spiked over the period of a few days.

Raidion 6y ago
I think he's referring to the feedback loop that hoarding causes. If you're confident you'll be able to buy the good in the future, you'll buy less now. If a hoarder clears out the supermarket, that means that everyone that shops at that supermarket and doesn't get what they want is more liable to make a larger purchase when do find it at another store. This chain reaction leads to shortages. It's impossible to prove the direct amount of causation (and of course organic demand spiked), but the relationship is clearly there.
- chrischen 6y ago
  I think he's specifically referring to the hoarders being the cause of the price increase in the first place and profiting off of their hoarding (correct me if I'm wrong). But that's definitely not the case with most shortages of things like PPE and alcohol. Most people are calling any price increase gouging, to the point where sites like eBay have simply banned anyone from selling masks at marked up prices. However they grandfathered some pre-existing sellers. Ironically this created a monopoly situation that has constrained supply which by definition means ebay is price gouging (since they make a percentage based fee on sales). If they simply let new sellers "price gouge", it would flood the supply and naturally lower prices for things like masks on eBay.
- javagram 6y ago
  Sure, but people also just used up what they had. I had a box of mini hand sanitizer in the closet i purchased 2-3 years ago, I brought it out at the beginning of march and began to use it. I ran out and there was no more to be found in any store. Still have only seen it once or twice in a store, behind the counter now 2 months later. Even if we had all just tried to buy 1 bottle of hand sanitizer each that would have been 330 million bottles, I don’t think store shelves had that many in march. (Edit: It’s the same thing as happened to stuff like toilet paper - we usually make just enough toilet paper for everyone, between commercial and retail toilet paper sales. Suddenly commercial toilet paper became unsaleable with industries shuttering their doors, and the existing supply of home toilet paper wasn’t enough anymore since now all the bum-wiping that would have been done with commercial toilet paper needed to be done with the different rolls that are sold to home goods buyers)

deathgrips 6y ago

Wrong. Demand for hand sanitizer increased because people thought the world was ending and hand sanitizer would save their lives. Hand sanitizer went from a tool that marginally increased your health to a tool that many believed would save their lives. If you can't call this a genuine rise in demand, I'm not sure what you could call a rise in demand. I haven't seen any real data that the effect of middlemen was anything but tertiary. Hospitals and governments buying up truckloads of hand sanitizer had a greater effect on the market than middlemen.

vmception 6y ago

> IANAL (or economist) And true to form, your following statement was not what lawyers or economists would call price gouging. As with most things, there is the colloquialism, and then there is the law. Price gouging laws are almost impossible to run afoul of, because thats not how this country is run. There are limited temporary state-controlled market disruptions, activated by a State of Emergency declaration.