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$5000 per violation of price-gouging in CA

caloes.ca.gov

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Re: $5000 per violation of price-gouging in CA

#191

Post by cl0rkster »

EdgarVerona wrote: post #146
daenz wrote: post #131

Earlier quoted context omitted.

>A lot of people in this thread are willfully ignoring some basic facts here. These products are being made in sufficient quantity for everyone. There is not a significant decrease in production. There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product. You neglected to mention that demand is increased. If it wasn'…

You neglected to mention that when people see fake headlines about toilet paper scarcity, there's a nontrivial percentage of people who see that as an opportunity for said arbitrage. There's two kinds of hoarding happening here: fear-alleviating and profit-seeking, which allows the profit seeking form of acquisition to be possible. Several weeks ago, it wouldn't have been feasible for someone to scoop up the entire m…

Seems to me that it's unlikely the toilet paper producers are perpetually running at 100% factory output. Something tells me they will respond by increasing production. Why? Because they are seeing enormous sales currently. Of course they want more. With some of the supply chain troubles we are having with everything closing, though, the delay might be slightly longer. I highly doubt this shortage will last longer than a couple of weeks. Even if I'm wrong, I'll keep believing that... Because honestly, the fear people have is as bad as the illness at this point.

Re: $5000 per violation of price-gouging in CA

#192

Post by forkexec »

daenz wrote: post #187
EdgarVerona wrote: post #146

Earlier quoted context omitted.

You neglected to mention that when people see fake headlines about toilet paper scarcity, there's a nontrivial percentage of people who see that as an opportunity for said arbitrage. There's two kinds of hoarding happening here: fear-alleviating and profit-seeking, which allows the profit seeking form of acquisition to be possible. Several weeks ago, it wouldn't have been feasible for someone to scoop up the entire m…

>So is your solution "good on them, they're taking advantage of people's fears to help make the rumors true?" My solution is we should do all that we can to decrease the latency that prices respond to supply and demand. It will help everyone. >Just what price do you think toilet paper should be right now in stores? That's not up to me to decide, because I don't presume to speak for the individual wants and needs for…

Increasing retail prices doesn't do any good, especially normal people who need one package of TP, limiting quantities does. That's a fairer way to solve it than treat TP like some damn Bitcoin.

Re: $5000 per violation of price-gouging in CA

#193

Post by XorNot »

syshum wrote: post #175
XorNot wrote: post #159

Earlier quoted context omitted.

By the exact mechanism in the article above, penalizing price-gouging?

That does not prevent hoarding The idea that people are hoarding right now simply because they want to resell the goods to others is moronic on many levels People are hoarding right now because they believe they may be months with out a supply of the good, so they are buying in multiples of normal levels fully expecting they will use it themselves, not reselling

Well then good news, because it turns out you don't need an authoritarian government, just your local supermarket chain to decide that they'd prefer to retain their existing customer base:

1. https://www.reddit.com/r/australia/comments/fiag4b/handing_o...

2. https://www.reddit.com/r/gifs/comments/fiajl0/props_to_this_...

Re: $5000 per violation of price-gouging in CA

#194

Post by rahimnathwani »

geofft wrote: post #170
rahimnathwani wrote: post #160

Earlier quoted context omitted.

"use the government's influence to artificially prevent the price of the product from rising" How would that work? If Dollar Tree were fully stocked with hand sanitizer, I would go there right now and buy 10 bottles. But so would 99 other people. So we 100 would get all the 1000 bottles, and everyone else would be SOL.

Why would you buy 10 bottles? What are you going to do with them? Are you afraid they're going to run out? Why? (Put another way, why aren't you buying 10 bottles of drain cleaner right now?) One of my local pharmacies had hand sanitizer in stock for $3 and no obvious limit on purchases. I bought one, because I needed one, and I expected that (because my locality had announced anti-price-gouging laws) I could go back…

I would buy 10 because that would last me 2 months (current expectation) to a year (normal usage), so I don't need to think about it for a wbile and, yes, I would not need to worry that they would run out.

"I expected that (because my locality had announced anti-price-gouging laws) I could go back and buy another one if I needed it"

Anti-price-gouging laws might stop people selling at high prices near you, but they don't stop people buying up all local supply, and re-routing it to places without such laws.

Re: $5000 per violation of price-gouging in CA

#195

Post by jimmaswell »

yjftsjthsd-h wrote: post #169
robomartin wrote: post #134

Earlier quoted context omitted.

I agree with the points you are making. I will add that hoarding does increase the cost of producing goods. If the toilet paper manufacturer needs to produce at 10x normal capacity because people are filling their car with the stuff, they will need to increase staff, work more shifts and maybe even buy/rent/build more production equipment. Does this double, triple or quadruple costs? Likely not. Yet costs do increase…

> Perhaps the law we need is one to control hoarding behavior or the rate of change. You know what would control hoarding? Higher prices.

Poor people not getting to have toilet paper is not an acceptable solution.

Re: $5000 per violation of price-gouging in CA

#196

Post by daenz »

jayd16 wrote: post #166
daenz wrote: post #111

Earlier quoted context omitted.

I would argue that the supply/demand pricing isn't responding fast enough to the hoarders. If the price was fully elastic, as people began to hoard lysol wipes, prices would rise on the hoarders and make it much less profitable for them. But prices aren't rising correctly, much like an artificial price ceiling would do, making it possible and profitable for hoarders to create a shortage.

>I would argue that the supply/demand pricing isn't responding fast enough Yes, that's a failing of the real free market we live. It already failed so I don't see why suggesting the status quo is useful. In the real world we're not all omniscient, rational actors. Protections like this are useful in the short term.

>Protections like this are useful in the short term.

Explain how this "protection" will stop the stated problem of people hoarding and reselling. Since when have fines or punishment stopped black markets from existing?

>It already failed so I don't see why suggesting the status quo is useful.

"The car brakes couldn't decelerate the car fast enough, they failed, so I don't see why suggesting better brakes is useful." Decentralized, free market pricing is enormously robust and flexible and has allowed the global economy to flourish. But since it has failed you, what would you like to replace it with?

Re: $5000 per violation of price-gouging in CA

#197

Post by altacc »

daenz wrote: post #131
EdgarVerona wrote: post #95

A lot of people in this thread are willfully ignoring some basic facts here. These products are being made in sufficient quantity for everyone. There is not a significant decrease in production. There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product. This is not a case of toilet paper suddenly costing more to pro…

>A lot of people in this thread are willfully ignoring some basic facts here. These products are being made in sufficient quantity for everyone. There is not a significant decrease in production. There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product. You neglected to mention that demand is increased. If it wasn'…

The idea that the correct solution to this is that supermarkets should be charging the same as the profiteering hoarders (say $20 for a small hand sanitiser and $40 for a pack of toilet rolls) is totally insane to me. This isn't some mythical free market model in a textbook, this is the real world, where real people live. Luckily society in general, through its laws, social judgement, etc... agrees to some extent that this level of greed shouldn't exist.

Re: $5000 per violation of price-gouging in CA

#198

Post by syshum »

mattlutze wrote: post #182
syshum wrote: post #161

Earlier quoted context omitted.

While that is in fact the stated reason for the law against price gouging, that rarely happens in the real world What does end up happening is something (like a outbreak or natural disaster) causes a regional shortage of a good, which is often extended because there is no real incentive to divert goods to fill the shortage. Today that if often mitigated because of large national companies like CVS, Walmart, Lowes, Ho…

Actually I took the gas price bit from specific experience and saw enough examples in a quiet Midwest area growing up to expect my experiences weren’t unique. The other issue is people, like in the article, just buying up a bunch of stuff so that other people literally can only buy from the opportunist. Consider the battle for concert tickets, which the band might sell for $20 but a scalper would buy and try to resel…

>>The other issue is people, like in the article, just buying up a bunch of stuff so that other people literally can only buy from the opportunist.

While I am sure there are opportunists as you call them, that is not the primary reason people are buying up the stocks of goods. Most people are not bulk buying with the intent on reselling.

>>Consider the battle for concert tickets, which the band might sell for $20 but a scalper would buy and try to resell for $100.

That is not what is happening right now, and personally i have no issues with scalpers but I am also anti-social and never attend events for which a scalper would be able profit from. The solution to scalping is not price gouging laws, but non-transferable tickets, or individually named tickets. Many events are already doing that because the practice of scalping hurts attendance and the fan base. No government intervention is needed to resolve that issue

>but it’s fine for a society to determine it’s better for everyone

This will be our deviation point in philosophy, I am an individualist, holding the individual rights are in fact more important thank what society determines to be "better"

Re: $5000 per violation of price-gouging in CA

#199

Post by geofft »

logicchains wrote: post #178
geofft wrote: post #164

Earlier quoted context omitted.

You could, alternatively, convince them that they don't want that much toilet paper. For instance, convince them that stores will not run out of stock and that they will be able to go to stores. This is the normal state of the toilet paper market. The problem here is not that we've suddenly been possessed by demons who want infinite toilet paper, the problem is that people are making rational decisions based on actua…

>Also, price-gouging laws do not "stop the market from giving them what they want." If anything, price gouging does - if someone who has $100 in savings wants a year's worth of toilet paper, they're less able to successfully get it if the market can run unchecked. It's true that an unregulated free market is good at getting products sold at the best price for the sellers - that's very different from giving people wha…

> the rise in price incentivises the market to produce more of the product / incentivises more producers to enter the market

I really don't see evidence that it does. Remember that there are two steps here: production and retail sale. It certainly incentivizes price-gouging resellers to collect more of the product and incentivizes people to become resellers - see the various folks who are "hustling" by buying out their local Costco and reselling online for a markup. I haven't seen evidence that e.g. Charmin is saying, "Thanks to higher prices, we're able to see more toilet paper" or "We're limited in supply, we're going to have to raise prices."

That was the original point. At the top of the thread you're replying to:

> These products are being made in sufficient quantity for everyone. There is not a significant decrease in production. There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product.

If you disagree with that, please present evidence of decreases in production / insufficient production / etc. There's been plenty of evidence in this comment section about the existence of profiteers.

(Perhaps the confusion here is whether price-gouging laws prevent your local corner store from selling more expensive toilet paper if their actual wholesale cost goes up? I would think they don't, and I would in fact agree that they should not and such a law would be a bad thing. It should prevent them from charging more markup, and either it should prevent them from buying from opportunistic intermediaries who are charging them more or it should apply to such intermediaries directly.)

Re: $5000 per violation of price-gouging in CA

#200

Post by EdgarVerona »

EdgarVerona wrote: post #174
logicchains wrote: post #168

Earlier quoted context omitted.

>What becomes of that toilet paper when this fear has subsided? It doesn't expire? People just use it up, and don't buy more until they've used all their store. >What becomes of the companies that had to scale production, create new factories, hire new workers etc... when the existing glut of supply is not only so much that those new facilities are hurting them, but also that it has decreased the demand for their pro…

> They only would have made the decision to scale production if they estimated the profit from filling this short-term demand would make up for the cost of having to eventually scale back the temporary investment. It's not exactly hard to predict that the demand won't last forever. So what you're saying is, they wouldn't have scaled production, so your entire proposition about why the price increase would be an effec…

> only the producers who could scale without "too much" cost would scale. > the rise in price incentivises the market to produce more of the product / incentivises more producers to enter the market

It sounds like this is built under an assumption that there is extra capacity available without significant or permanent costs. I don't know the level of capacity at which they are currently producing, but rationally speaking the mere fact that the shelves are empty due to demand would mean that intelligent companies would already have ramped up that capacity in response. So if the shelves remain empty, is that a sign that we've reached the level of demand where the cost of additional supply becomes more expensive/ongoing?

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