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> it comes down to whether your personal values prioritize cash flow over being decent to people This is absolutely false. My personal values prioritize decenc

> it comes down to whether your personal values prioritize cash flow over being decent to people This is absolutely false. My personal values prioritize decency and integrity, but also logic, and my analysis of the facts leads to the inescapable conclusion that shocks to demand/supply should lead to shocks in the price, and suppressing those shocks just leads to more negative distortions and less value for everyone. It is counterintuitive that, say, when a region is hit by a hard storm and supplies are hard to come by, that those holding the supplies (i.e. gas, water, food, etc.) should experience a windfall, but the windfall is only the consequence of making sure that those precious supplies are only consumed by those that absolutely need it. Are inequalities exacerbated in this scenario? Of course. But there is no good way to get around this fact through the price system (there are other, better ways of addressing inequalities here and elsewhere).

scott_s 13y ago
During emergencies, many brick-and-mortar stores do not raise prices, and will eat the cost to avoid making people upset. People hold grudges. You may gain in the short term, but are likely to lose in the long term.
- tvladeck 13y ago
  Absolutely some do; I consider that orthogonal to the question of whether or not it would be ethical for them to raise them if they wished, however.
  - scott_s 13y ago
    I point it out as a counter to the tempting narrative of rational economic thinking versus compassion.
- qq66 13y ago
  Also, because brick-and-mortar stores don't raise prices (often due to price-gouging laws), people who find themselves in a store with bottled water, for example, will buy much more than they would have if the water was suddenly $50 per bottle. They buy more than they need, leaving none for people who need it just as much but showed up to the store 5 minutes later. When demand exceeds supply, there will be some mechanism by which some demand will be satisfied and other demand will not. In the case of hotels, it's price, in the case of water in an emergency, it's randomness or physical strength grabbing bottles in the grocery store, and in some cases the government steps in and starts rationing goods.
PhasmaFelis 13y ago
Wow. I like how you vaulted straight over the defensible middle-ground "hotels charging more during big events isn't actually the same thing as price-gouging" argument and went straight to defending incontrovertible, life-threatening, criminal-in-34-states price-gouging. > the windfall is only the consequence of making sure that those precious supplies are only consumed by those that absolutely need it. No. It's it's making sure they're only consumed by those with the most money.
- tvladeck 13y ago
  > I like how you vaulted straight over the defensible middle-ground "hotels charging more during big events isn't actually the same thing as price-gouging" argument and went straight to defending incontrovertible, life-threatening, criminal-in-34-states price-gouging. I did that because it clearly raises the bar for my argument. I have more to prove in the harder cases. And yes, I do think the logic holds despite what our emotions tell us, and I think that for the most part the laws are wrong. > No. It's it's making sure they're only consumed by those with the most money. Again, I'm granting that emergencies and other demand/supply shocks heighten the problems caused by inequality, and again, I'm granting that that's not ok and should be tackled appropriately by policy. I'm arguing that the price system is not the best way to tackle this and leads to other problems. This will seem a bit off-topic, but Chile tackled a similar problem in their water system by transferring cash to poor populations while letting their prices for water rise [1]. (This is only meant to illustrate how you can use more than one policy mechanism to tackle separate problems: prices for allocation, transfers for inequality). You're right, people with the most money can purchase more, but you also have to think about how you allocate scarce resources in the absence of a rise in price: is it first-come-first-serve? Does everyone get the same amount? You have to have some other mechanism to allocate the scarce resources and they each have their problems. Also, you must think about the supply side. People will find a way to supply areas with high prices. People are creative. In fact, the high prices in the Omaha rental market spurring people to turn to Airbnb is a perfect example of why we should let prices rise. [1] http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-2445 http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-244...
  - 13y ago

scott_s 13y ago

During emergencies, many brick-and-mortar stores do not raise prices, and will eat the cost to avoid making people upset. People hold grudges. You may gain in the short term, but are likely to lose in the long term.

tvladeck 13y ago
Absolutely some do; I consider that orthogonal to the question of whether or not it would be ethical for them to raise them if they wished, however.
- scott_s 13y ago
  I point it out as a counter to the tempting narrative of rational economic thinking versus compassion.
qq66 13y ago
Also, because brick-and-mortar stores don't raise prices (often due to price-gouging laws), people who find themselves in a store with bottled water, for example, will buy much more than they would have if the water was suddenly $50 per bottle. They buy more than they need, leaving none for people who need it just as much but showed up to the store 5 minutes later. When demand exceeds supply, there will be some mechanism by which some demand will be satisfied and other demand will not. In the case of hotels, it's price, in the case of water in an emergency, it's randomness or physical strength grabbing bottles in the grocery store, and in some cases the government steps in and starts rationing goods.

PhasmaFelis 13y ago

Wow. I like how you vaulted straight over the defensible middle-ground "hotels charging more during big events isn't actually the same thing as price-gouging" argument and went straight to defending incontrovertible, life-threatening, criminal-in-34-states price-gouging. > the windfall is only the consequence of making sure that those precious supplies are only consumed by those that absolutely need it. No. It's it's making sure they're only consumed by those with the most money.

tvladeck 13y ago
> I like how you vaulted straight over the defensible middle-ground "hotels charging more during big events isn't actually the same thing as price-gouging" argument and went straight to defending incontrovertible, life-threatening, criminal-in-34-states price-gouging. I did that because it clearly raises the bar for my argument. I have more to prove in the harder cases. And yes, I do think the logic holds despite what our emotions tell us, and I think that for the most part the laws are wrong. > No. It's it's making sure they're only consumed by those with the most money. Again, I'm granting that emergencies and other demand/supply shocks heighten the problems caused by inequality, and again, I'm granting that that's not ok and should be tackled appropriately by policy. I'm arguing that the price system is not the best way to tackle this and leads to other problems. This will seem a bit off-topic, but Chile tackled a similar problem in their water system by transferring cash to poor populations while letting their prices for water rise [1]. (This is only meant to illustrate how you can use more than one policy mechanism to tackle separate problems: prices for allocation, transfers for inequality). You're right, people with the most money can purchase more, but you also have to think about how you allocate scarce resources in the absence of a rise in price: is it first-come-first-serve? Does everyone get the same amount? You have to have some other mechanism to allocate the scarce resources and they each have their problems. Also, you must think about the supply side. People will find a way to supply areas with high prices. People are creative. In fact, the high prices in the Omaha rental market spurring people to turn to Airbnb is a perfect example of why we should let prices rise. [1] http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-2445 http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-244...
- 13y ago