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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

#201

Post by EdgarVerona »

forkexec wrote: post #189
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…

The Lottery ticket folks who see this as their one miraculous "opportunity" to become "billionaires" based on toilet paper, hand sanitizer, Lysol and powdered milk hoarding and selling individually on eBay at 10000% of retail. All stores had to do was limit quantities, but they didn't.

I definitely agree with that. I'm totally in support of the idea of limiting quantities, and I do think that would be a rational solution in the face of these current extenuating circumstances.

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

#202

Post by geofft »

seibelj wrote: post #167
geofft wrote: post #130

Earlier quoted context omitted.

> The government may support a lot of research but the government’s tax base derives from entrepreneurs who create a healthy free market. Wouldn't the free market be healthier if the government stopped taxing those entrepreneurs so much?

That’s a debatable point but the fundamental economic structure of society is sound. Free market capitalism won, wins, and will continue to win. But like I said - Venezuela and Cuba are hurting a lot. They need good comrades to help them. Please emigrate there and help fix their societies by donating your labor and knowledge. I just don’t understand why more people don’t move there to help! You seem like an ideologic…

Ah, but I'm already helping them. The biggest reason they're hurting is America has spent almost an entire century using government funds to prevent other countries from becoming communist and to prevent communist countries from being successful. If I can win hearts and minds in America and make us stop doing that, then that solves the underlying problem and not just the symptom.

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

#204

Post by EdgarVerona »

cl0rkster wrote: post #191
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…

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 th…

Unfortunately we don't have the data, only the evidence of whether their capacity is meeting demand. Right now it's not - but we will see in a week or two. If it continues to not do so, it seems rational to believe that they have reached the level of capacity where it would become more prohibitively expensive to increase supply. And at that point, the industry is going to have to face either severe short term shortages or potential long term financial trouble for short term gain.

I hope it doesn't reach that.

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

#205

Post by maxerickson »

briandear wrote: post #3

An argument supporting gouging: https://reason.com/2019/01/31/price-gouging-is-supply-and-de...

It'd likely be good business for Costco to keep prices where they have been and limit each customer to a certain amount.

(I expect the goodwill would outweigh the costs and any "foregone" profit)

Not imposed by the government, not socialism, just good business.

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

#206

Post by bgorman »

forkexec wrote: post #192
daenz wrote: post #187

Earlier quoted context omitted.

>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.

As someone who isn't hoarding TP, I would much rather be able to buy one package of toilet paper for 50 dollars versus being able to buy zero for 5 dollars. If people don't have access to toilet paper they will become hysterical. Raising prices is the obvious way to fix this. Less people will be willing to buy excess tp rolls if it costs 50 dollars a roll.

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

#207

Post by daenz »

altacc wrote: post #197
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'…

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 tha…

>The idea that the correct solution to this is that supermarkets should be charging the same as the profiteering hoarders

Where did I say they would charge the same as the hoarders? I simply said the prices should respond faster to the supply and demand. Yes that will make prices go up accordingly, and it will also decrease the incentive to hoard and resell.

Prices of goods are already set largely by this model. For you to think that the prices responding faster to supply/demand is insane is to also suggest that all prices set by supply/demand is insane.

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

#208

Post by hodgesrm »

logicchains wrote: post #120
hodgesrm wrote: post #45

Earlier quoted context omitted.

The argument that the threat of gouging increases the motivation to hoard is basic economics. For analogous reasons there is FDIC insurance on bank accounts because the alternative is runs on banks that can lead to system collapse. Not every point on the supply/demand curve is a good place to be.

>The argument that the threat of gouging increases the motivation to hoard is basic economics. But the ability to increase price freely also decreases actual hoarding, because when stores see a massive increase in demand, they'll be incentivised to increase prices, which will deter unnecessary purchases.

If your goal is to prevent hoarding and ensure there's enough for everyone, it's simpler just to limit the number of rolls each customer gets. Fewer corner cases.

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

#209

Post by vikramkr »

kragen wrote: post #144
vikramkr wrote: post #24

Earlier quoted context omitted.

I think governments would rather that people that get it first have access than the peoplwnehat can't afford it. If you're going to have to essentially have some people not get supplies, basing it off of wealth and income is not politically optimal

Having people line up around the block to be first when the pharmacy opens is perhaps politically optimal but it is not epidemiologically optimal. Except from the point of view of the virus.

Absolutely. And i think this pandemic is revealing the extent to which political optimality bis deviating from epidemiologic optimality, and the devastating consequences of that given that our politicians are constrained by politics. This has absolutely revealed a need for structural reform to make what's politically optimal and epidemiologically optimal line up, and considering how complex a challenge that is, that's a conversation to start sooner rather than later.

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

#210

Post by EdgarVerona »

altacc wrote: post #197
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'…

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 tha…

This is how I feel, precisely. There are real, human consequences to these price increasing theories. It will be felt by people who are, by a large margin, not the target audience of Hacker News. It'll be felt by people who have to choose between having basic healthcare supplies and paying rent, or eating.

Indeed, at that point I think rationing - either by the companies selling the product, or by the government (as we have done in times of crisis in the past) is in order. Would people be yelling about free markets like this if World War 2 happened today, and there was the kind of rationing we saw in those times? What would have happened to our country if people were so selfish back then?

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