Economics: The Value of "Price Gouging"

[clubgop]

No it doesn't. You say you don't care but here you are caring.

I do not agree with them either.

then in the next breath.

creates an incentive to artificially impose scarcity, which is the exact opposite of what you want in a disaster. Again.. fucking duh.

As if all the suppliers are going to willingly sell to one person for a low price when they could sell it for higher to customers.

[Speaker to Animals]

No it doesn't. You say you don't care but here you are caring.

I do not agree with them either.

then in the next breath.

creates an incentive to artificially impose scarcity, which is the exact opposite of what you want in a disaster. Again.. fucking duh.

As if all the suppliers are going to willingly sell to one person for a low price when they could sell it for higher to customers.

Sellers will sell at whatever price they fucking feel like selling. You are free to purchase from anybody, which means anybody who understands markets at all can start buying up the commodity to corner the market.

This will happen until supply is controlled by people who want to sell at a price well above the efficient price point indicated by supply and demand.

If a market gets restricted to a small area, and immediate necessity is exacerbated by disaster, then of course this happens.

It does not even have to happen in a disaster or with necessities. Diamonds are a cornered market. Nobody gives a shit because everybody at some level realizes diamonds are not necessary for really anything outside narrow industrial applications. But it is the same fucking problem.

Patents on life-critical drugs create the exact same problem. If you need some drug to save your life, and I am the only person who is legally allowed to manufacture it, then I cornered the market and, without regulation, can charge you whatever I want.

[Speaker to Animals]

Another example: Why do you think scalping is illegal?

Both of you claim nobody could possibly have the wherewithal to buy up a commodity to create artificial scarcity and then price gouge, but that is exactly what happens with ticket prices in an environment with no anti-scalping laws and ticket retailers not limiting ticket sales.

It obviously happens.

It's almost as if marke5s are a real thing. Who knew humans could possibly be so clever as to realize they can sometimes corner a market and enrich themselves through price gouging..

[Speaker to Animals]

It even happens all the time in financial markets with low liquidity. This is why serious markets like NYSE need market makers to make it difficult to short-term corner a market on a stock or commodity.


Again.. fucking duh..

[DBTrek]

Ticket scalping doesn’t happen because people create artificial scarcity. Ticket scalping happens because 5000 people want 1000 tickets from the get-go. The scarcity already exists, with or without scalpers.

Same with disasters. The disaster creates the very real scarcity, not “price gougers”. In both cases you persist in misrepresenting the cause of the scarcity. In both cases scarcity drives prices higher because demand heavily outstrips supply. In both cases those who have some of the scarce supply simply sell their commodity for what the market will bear.

Likewise, in both cases the government dictating that sellers can’t sell at prices demand commands benefits no one. Legislating that sellers sell for less than demand would dictate does not create any additional supply, nor incentivize anyone to sell. It’s a feel-good measure with no actual benefits.

[Speaker to Animals]

Literally artificial scarcity, DB. Fuck sake.

Scalpers buy as many tickets as they can until the venue is sold out Then they stand outside the venue selling the tickets for much higher prices. The difference between ticket scalping and price gouging in a disaster is that ticket scalpers do not possibly get people killed. Otherwise, it's the same fucking thing.

[DBTrek]

Who do the ticket scalpers sell to, if there wasn’t scarcity to begin with? You honestly believe every concert has the same exact number of interested attendees? Every concert in a 1000 seat venue has exactly 1000 people willing to buy tickets, whether it’s Beyoncé or a local band playing a show?

And these scalpers, they come into the equation and screw up this miracle parity by depriving some of the thousand buyers from getting tickets? If the scalpers weren’t there every interested buyer would always have a ticket, because there’s never a show more than a thousand people want to attend?

Ridiculous. They scarcity exists before the scalpers enter the equation. Ticket scalpers aren’t buying up 600 tickets to a show only 500 people want to attend so they can sell 100. They would lose their shirts. They’re buying tickets to shows that everyone knows will sell out because the scarcity already exists. You know this.

[Speaker to Animals]

It is like talking to an NPC. He's just running the script programmed by Sowell. He does not seem to possess the capability to actually process what people are telling him.

[DBTrek]

I realize you’re equating price gouging and ticket scalpers with monopolies, and that they’re two different things. If I buy a Pearl Jam ticket for $75, and resell it for $200 I haven’t created scarcity, I’ve taken advantage of pre-existing scarcity.

Same if I run 100 electric blankets into Chicago during a deep freeze. I didn’t create shit but an opportunity for people to access goods they otherwise could not purchase. Scarcity was already there.

You keep talking monopoly, scarcity being artificially imposed where it would not otherwise exist. No dude with a van full of blankets or a fist full or Pearl Jam tickets has a monopoly on shit.

/shrug

[Speaker to Animals]

No. I am not equating them with monopolies. You are running off the Sowell script again.