Do consumers prefer price gouging to shortages?

https://www.econlib.org/do-consumers-prefer-price-gouging/

by delichon • 2 years ago

6 13 2 years ago

From the article: "Price gouging is generally defined as a situation where companies set the price above the customary level in order to prevent shortages from occurring."

This is not the definition as far as I know.

AnimalMuppet2• 2 years ago

That sounds like normal supply and demand, not "price gouging". If you only have N of something, you set the price level such that the demand at that price will only be N of that thing.

But people feel it as price gouging. If the price has been X for a long time, and now the price is suddenly several times X because the supply got short, that feels like price gouging rather than "supply and demand".

beardyw• 2 years ago

I think it is perceived as a reasonable profit vs an unreasonable profit.

JohnFen• 2 years ago

Price gouging almost always happens when there are shortages, so the choice isn't between the two. You'll get both.

Price gouging only benefits those who are relatively wealthy (and the sellers). To those who aren't, it's just a plain old shortage, but combined with having salt rubbed into that wound.

082349872349872• 2 years ago

The latter would explain why the Grateful Dead sold their concert tickets via a lottery system.

pjkundert4• 2 years ago

Except the shortage lasts for mere moments, instead of as long as the causal disruption.

pjkundert4• 2 years ago

Show me an example of “gouging” in any market except those with government-controlled supply.

Surprise!

You can’t — because, it turns out, people enjoy providing goods and services at a profit, and will gleefully and immediately resolve the supply disruption that led to the “gouging”.

This topic is surprisingly robust, for something with so many obvious counter examples in such a wide range of scenarios…

_yid9• 2 years ago

It’s almost as if opposition to free markets is based on ideology, not evidence.

Which is clearly impossible on a platform like HN, which values interesting facts above boring, religious ideology … right?

kelipso2• 2 years ago

Are you joking? Concert food and drinks and anything sold at an airport, for a start.

pjkundert4• 2 years ago

A private enterprise can charge whatever they like; you aren’t forced to visit and buy - go to a competitor that doesn’t charge as much! Or take your own alternative supply.

This is not even remotely an example of “gouging”.

Try again?

Do consumers prefer price gouging to shortages?

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