Economics: The Value of "Price Gouging"

[Speaker to Animals]

I just showed you explicitly how it is necessary. It is self-evident that the ONLY way you can successfully engage in price gouging is if the other sellers agree to participate in your price gouging, or you control all the supply to yourself.

There's literally no other way. People will just go to the sellers who are not engaging in price gouging.

[Fife]

People will just go to the sellers who are not engaging in price gouging.

No shit, Sherlock.

As I said, it's a one-on-one pricing mechanism. What on earth could you possibly have against people making the best deal they can?

Anyway, what is "successful price gouging?"

People are going to pay the price they feel they want to pay, for the quantity and quality of goods they want to buy, in a free country.

In your model, people will be allowed to keep *all* of their money, or barter capital. Because, there won't be any water, or gas, or whatever available for purchase. They will still have all their money as they starve to death.

The Raleigh pricing done by some asshole Public Administration grad sitting in his tower will have already determined the "correct" price for water, and everything else, way up on the mountain, and everywhere else in NC, for that matter. The next step in a central planning fantasy is prohibiting the Walmart from even giving shit away for goodwill. And there will be no supply for the people deprived of essential goods.

No thanks.

[Speaker to Animals]

People will just go to the sellers who are not engaging in price gouging.

No shit, Sherlock.

As I said, it's a one-on-one pricing mechanism. What on earth could you possibly have against people making the best deal they can?

Anyway, what is "successful price gouging?"

People are going to pay the price they feel they want to pay, for the quantity and quality of goods they want to buy, in a free country.

In your model, people will be allowed to keep *all* of their money, or barter capital. Because, there won't be any water, or gas, or whatever available for purchase. They will still have all their money as they starve to death.

The Raleigh pricing done by some asshole Public Administration grad sitting in his tower will have already determined the "correct" price for water, and everything else, way up on the mountain, and everywhere else in NC, for that matter. The next step in a central planning fantasy is prohibiting the Walmart from even giving shit away for goodwill. And there will be no supply for the people deprived of essential goods.

No thanks.

Successful price gouging occurs when you are actually able to sell your goods at the inflated price, which can only happen when all the sellers agree to engage in price gouging. Otherwise, you are just an asshole on the side of the road with a joke sign for water at $1,000 per gallon. I'd throw my slurpy into your face as I drove by too.

[Haumana]

Janet Snyder, a pharmacy technician in Cape Coral, said several men in two pickup trucks spotted her roof damage and offered to lay down a temporary covering of plastic sheeting. They wanted $600, about four times what she figured was the right price, based on 15 rolls of plastic that usually sell for $10 each

WTF kind of plastic sheeting is selling for $10 a roll? Have you ever bought visqueen? 20' x 100' x 6 mil will run you over $100 a roll.

https://www.homedepot.com/p/HDX-20-ft-x ... /204711641

15 rolls..... 10 bucks each..... smells like a crock of shit to me.

[Speaker to Animals]

Anyhoo.. I think Fife sees the train light at the end of this tunnel and is trying to pull the party back out the other end of the tunnel before it's too late.


DB agrees, and I think Fife does too but knows where this is going, that price gouging is essentially a temporary cartel or monopoly operating in a small area during a time of emergency or duress. Point one is accepted and we can move on. I will let Fife sneak back out if he so chooses, but he cannot deny this simple assertion. It shouldn't even have to be debated. But alas..

Point 2: Given that the condition necessary to engage in price gouging is a temporary control of supply of a good, either through collusion (cartel) or by cornering the entire market under one seller (monopoly), can we at least agree that scarcity is not a precondition at all? By this I mean, is it not possible for there to exist more than enough supply of water between Fife, DB, and myself to keep everybody alive until relief arrives into the righteously ruined city of Seattle, but the condition necessary to engage in price gouging behavior still exists, since it is certainly possible for the three of us to collude and hike prices to $1,000 per gallon?

[Haumana]

Mr. Lawrence, a cook who is studying to become a Web site designer, came across a gas station here in Orlando selling the equivalent of two $1 bags for $10.

$1 bags of what?

In Plant City, just east of Tampa, Rosemary Duffield, who is in her 80's, decided she should get out of her mobile home and she booked a room a little farther inland, at the Crossroads Motor Lodge in Lakeland, she said in court papers. She was told the price would be $44.79, she said. But when she called to reconfirm later in the day, the price was $55.79. After checking in on Friday and settling into her room, she discovered that she had been charged $61.27.

Ok. Did she prepay or just reserve the room?

In one of the boldest cases, some contractors from Jacksonville offered to clear two trees off the roof of an Orlando woman for $23,000, Mr. McMahon said. The woman declined the offer.

Boldest cases? How big are the trees and what was the actual cost to get the trees removed? Or are they still on her roof?

And a man with a chain saw told Jerry Olmstead that he could clear the oak tree off his roof, but it would cost $10,500.

Again, what didn't Jerry Olmstead finally pay to get that oak tree off his roof? And did it take more than a man with a chain saw to get the job done?

[SuburbanFarmer]

This theory depends heavily on everyone at least potentially having the money to pay that price.

It’s a lot different when a starving kid needs water, and you’re selling it to a fat tourist.

This is why laissez fair is not a realistic option.

[Fife]

This is why laissez fair is not a realistic option.

I guess you're right, since "laissez fair" is some kind of autist misspelling.



What's your plan instead?

[SuburbanFarmer]

This is why laissez fair is not a realistic option.

I guess you're right, since "laissez fair" is some kind of autist misspelling.



What's your plan instead?

Autocorrected, douche.

I don’t have a concrete plan. But I know that neither extreme will work. You can’t just “let the market work” in extremis, because it doesn’t. You also can’t clamp the prices down.

Declaring a maximum of 100% increase in price within a week or something, would probably be best.

[DBTrek]

I think a lot of "water" is being muddied by equating "price gouging" with monopoly "price fixing". These are different things. StA's example is not price gouging, it's Fife and I trying to price fix with only 2/3rds of the water supply. Our attempt fails until StA depletes his 1/3rd of the supply, at which time Fife and I have 100% of the remaining water. That's monopoly price fixing - a different animal.

Price gouging is actually a normal market reaction to an enormous spike in demand. Natural disasters create incredible demand, which drives the price of goods higher, which attracts sellers who want to capitalize on these higher prices. That's it. Normal market activity demonized by the derogatory term "price gouging".