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Stores can and have limited the quantity one can purchase during this pandemic which is arguably a better method for preventing hoarding. Many of the supplies

Stores can and have limited the quantity one can purchase during this pandemic which is arguably a better method for preventing hoarding. Many of the supplies issues aren’t due to actual limited supply but due to behavior patterns that stem from either fearing that something would run out or people taking advantage of the situation buy all the toilet paper in town and set your own price on the black/grey market. The problem isn’t people having the foresight to spend resources it’s people creating artificial shortages. This isn’t the type of behavior you want to encourage. This is also not a free market, the free market doesn’t work at short time frames and emergency situations.

AnthonyMouse 6y ago
> Stores can and have limited the quantity one can purchase during this pandemic which is arguably a better method for preventing hoarding. At which point you're assuming everybody has the same need, which is completely wrong. Someone walks into the store to buy on behalf of six dozen people because their ordinary supplier is out of stock and you won't give them any more than what you will a single individual. Requiring every individual to come into the store one by one is both highly inefficient and, in this context, the exact opposite of social distancing. Meanwhile every individual who comes into the store for unrelated reasons then also buys the individual limit on the scarce good even when they don't need it, because the price is still low. > Many of the supplies issues aren’t due to actual limited supply but due to behavior patterns that stem from either fearing that something would run out or people taking advantage of the situation buy all the toilet paper in town and set your own price on the black/grey market. Which higher prices prevent, because hoarding large quantities is very expensive when the price is high, and arbitrage is unprofitable because you can't buy low and sell high if you have to buy at the higher price. > The problem isn’t people having the foresight to spend resources it’s people creating artificial shortages. This isn’t the type of behavior you want to encourage. You can't corner the market on a global commodity by buying out local stores. If it's selling for $50 where you are and $5 in other places then enterprising people will get in their cars and undercut you until the price is much closer to uniform. Meanwhile to make money the hoarders would essentially need to act as a cartel (not selling in order to keep the prices even higher), but with uncoordinated actors everybody has the incentive to defect and sell as soon as the price is above fair market value. If you're keeping prices high by hoarding that means somebody is going to be left holding the bag because the price came back down before they unloaded their hoard, and everybody has the incentive to sell first and not be that guy. The hoarder's greatest risk is a container ship full of product comes into port and resolves the shortage overnight -- and the higher the price the more likely that happens. > This is also not a free market, the free market doesn’t work at short time frames and emergency situations. There is no evidence for this. The amount of time it takes for people to respond to price signals and arbitrage opportunities is measured in hours, not days or weeks.
- wtallis 6y ago
  > At which point you're assuming everybody has the same need, which is completely wrong. Someone walks into the store to buy on behalf of six dozen people because their ordinary supplier is out of stock and you won't give them any more than what you will a single individual. Requiring every individual to come into the store one by one is both highly inefficient and, in this context, the exact opposite of social distancing. The assumption that everyone has the same need is less wrong than a system that implicitly assumes need is proportional to disposable income. Someone walking into a retail store to buy on behalf of six dozen people is theoretically possible, but definitely is not common, and almost certainly less common than someone trying to hoard excess supplies for personal use.
  - nitrogen 6y ago
    Plus I'm sure that e.g. volunteer groups distributing supplies to those in need can negotiate the ability to buy higher quantities.
  - chii 6y ago
    > less wrong than a system that implicitly assumes need is proportional to disposable income. you keep mentioning disposable income, as tho that's a measure that determines buying power. It's not. The measure is available funds, regardless of source. A person with a lot of available funds _do_ have a higher claim than someone who doesn't. The source of the funds may be their prior work and savings (aka, disposable funds), or it could be funds collected from many people (such as donations, or family pooling funds). It is not clear how you can make a distinction between many people pooling their funds, vs somebody who has collected large amount of funds prior (from income or wealth). This is why price fixing doesn't work well, except under quite exceptional circumstances (e.g., all transport infrastructure is disrupted), in which case, rationing by decree works better than price fixing.
    - wtallis 6y ago
      I've yet to see any evidence or plausible explanation for how pooling funds to have one person buy a large quantity of necessities could be a widespread strategy in this situation. It seems like this is just a red herring, and that the vast majority of people tying to buy large quantities of eg. TP, hand sanitizer or masks are either irrationally hoarding excess supplies for personal use, or planning on scalping. But even if shopping on behalf of the entire neighborhood is common, is protecting that strategy more important than deterring hoarders and preserving the ability of underprivileged people to buy what they need for themselves?
justinmeiners 6y ago
> Stores can and have limited the quantity one can purchase It's easier to game, (eg. buy going to multiple stores or at different times of day) and it only solves the hoarding problem. Price increases solve hoarding, allocation, and encourage new production.

AnthonyMouse 6y ago

> Stores can and have limited the quantity one can purchase during this pandemic which is arguably a better method for preventing hoarding. At which point you're assuming everybody has the same need, which is completely wrong. Someone walks into the store to buy on behalf of six dozen people because their ordinary supplier is out of stock and you won't give them any more than what you will a single individual. Requiring every individual to come into the store one by one is both highly inefficient and, in this context, the exact opposite of social distancing. Meanwhile every individual who comes into the store for unrelated reasons then also buys the individual limit on the scarce good even when they don't need it, because the price is still low. > Many of the supplies issues aren’t due to actual limited supply but due to behavior patterns that stem from either fearing that something would run out or people taking advantage of the situation buy all the toilet paper in town and set your own price on the black/grey market. Which higher prices prevent, because hoarding large quantities is very expensive when the price is high, and arbitrage is unprofitable because you can't buy low and sell high if you have to buy at the higher price. > The problem isn’t people having the foresight to spend resources it’s people creating artificial shortages. This isn’t the type of behavior you want to encourage. You can't corner the market on a global commodity by buying out local stores. If it's selling for $50 where you are and $5 in other places then enterprising people will get in their cars and undercut you until the price is much closer to uniform. Meanwhile to make money the hoarders would essentially need to act as a cartel (not selling in order to keep the prices even higher), but with uncoordinated actors everybody has the incentive to defect and sell as soon as the price is above fair market value. If you're keeping prices high by hoarding that means somebody is going to be left holding the bag because the price came back down before they unloaded their hoard, and everybody has the incentive to sell first and not be that guy. The hoarder's greatest risk is a container ship full of product comes into port and resolves the shortage overnight -- and the higher the price the more likely that happens. > This is also not a free market, the free market doesn’t work at short time frames and emergency situations. There is no evidence for this. The amount of time it takes for people to respond to price signals and arbitrage opportunities is measured in hours, not days or weeks.

wtallis 6y ago
> At which point you're assuming everybody has the same need, which is completely wrong. Someone walks into the store to buy on behalf of six dozen people because their ordinary supplier is out of stock and you won't give them any more than what you will a single individual. Requiring every individual to come into the store one by one is both highly inefficient and, in this context, the exact opposite of social distancing. The assumption that everyone has the same need is less wrong than a system that implicitly assumes need is proportional to disposable income. Someone walking into a retail store to buy on behalf of six dozen people is theoretically possible, but definitely is not common, and almost certainly less common than someone trying to hoard excess supplies for personal use.
- nitrogen 6y ago
  Plus I'm sure that e.g. volunteer groups distributing supplies to those in need can negotiate the ability to buy higher quantities.
- chii 6y ago
  > less wrong than a system that implicitly assumes need is proportional to disposable income. you keep mentioning disposable income, as tho that's a measure that determines buying power. It's not. The measure is available funds, regardless of source. A person with a lot of available funds _do_ have a higher claim than someone who doesn't. The source of the funds may be their prior work and savings (aka, disposable funds), or it could be funds collected from many people (such as donations, or family pooling funds). It is not clear how you can make a distinction between many people pooling their funds, vs somebody who has collected large amount of funds prior (from income or wealth). This is why price fixing doesn't work well, except under quite exceptional circumstances (e.g., all transport infrastructure is disrupted), in which case, rationing by decree works better than price fixing.
  - wtallis 6y ago
    I've yet to see any evidence or plausible explanation for how pooling funds to have one person buy a large quantity of necessities could be a widespread strategy in this situation. It seems like this is just a red herring, and that the vast majority of people tying to buy large quantities of eg. TP, hand sanitizer or masks are either irrationally hoarding excess supplies for personal use, or planning on scalping. But even if shopping on behalf of the entire neighborhood is common, is protecting that strategy more important than deterring hoarders and preserving the ability of underprivileged people to buy what they need for themselves?

justinmeiners 6y ago

> Stores can and have limited the quantity one can purchase It's easier to game, (eg. buy going to multiple stores or at different times of day) and it only solves the hoarding problem. Price increases solve hoarding, allocation, and encourage new production.