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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

#241

Post by dragonwriter »

georgemcbay wrote: post #238
seemslegit wrote: post #132

Is there any evidence consumers are stocking up to profit rather than just have enough so as to be able to avoid stores for some time ?

Yes, there is evidence, because some of the people engaged in this are dumb enough to give interviews to major press: https://www.nytimes.com/2020/03/14/technology/coronavirus-pu... I'm sure in terms of overall numbers the vast majority of people who are panic buying aren't doing it to profit, but it only takes a couple of jackasses like the ones described in the article operating at the scale they did to cause real…

The thing is, once people are hoarding for any reason, profit or not, and that leads to signs of potential supply problems, everyone else has a strong incentive to stock up defensively, not for profit or defense against the original disaster, but to prevent being adversely effected by the supply shortages caused by hoarding. Which then creates a positive feedback loop of incentives unless external controls (rationing) are imposed.

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

#242

Post by krapp »

seibelj wrote: post #48
krapp wrote: post #38

Earlier quoted context omitted.

The reason the water is clean and the food is nutritious is due to regulations, not free market capitalism.

Free market capitalism is not in opposition to regulations. America is a free market. We don’t live in socialism.

First, reasonable people do disagree about what free markets are, and many people do believe that free markets are by definition not regulated by anything but market forces.

Second, regulated markets are not an indicator of socialism, per se. It's entirely possible for regulated capitalism to exist, it's just debatable whether such markets can be called free.

Third, there is still no accepted definition of free market capitalism which makes your former comment true. Regulation is still the primary factor responsible for water and food quality.

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

#243

Post by 6gvONxR4sf7o »

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…

Amen. Price isn't even the issue here, just a symptom. Hoarding is the issue. Limit people to not buying 100 rolls of toilet paper, and suddenly the price everyone's willing to pay levels out. Price isn't the problem. Uneven distribution is.

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

#244

Post by sova »

logicchains wrote: post #184
daveFNbuck wrote: post #143

Earlier quoted context omitted.

Higher prices may encourage hoarding, as people might see the higher prices as a sign of scarcity and want to buy as much as possible before prices increase further or stores run out.

But they also decrease hoarding in that the higher the price, the fewer items people can afford to buy and hoard.

Hoarding is a temporally displaced behavior that begins before crisis happens. Artificial scarcity is created in pockets spurned on by time itself. Artificial Scarcity is capable of riding Real Demand as long as Real Demand exists.

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

#246

Post by georgemcbay »

sneak wrote: post #216
ghshephard wrote: post #76

Earlier quoted context omitted.

"I'm doubtful I'll get to see any more this year." - I'll take that action. All of the consumable that people have been panic buying - toilet paper, hand gel, etc... have experienced absolutely zero supply shock, and, indeed, most of the manufacturers are going to be delighted to draw down their inventory and get a boost this quarter. I'll be extraordinarily surprised if shelves aren't completely full of those consum…

> I'll be extraordinarily surprised if shelves aren't completely full of those consumable within 7-10 days. Then why do we need any price-gouging laws? Who is harmed without them, if the supply remains intact?

People with short term need?

7-10 days is a long time to go without some things like food, cleaning supplies (particularly in time of pandemic), masks for those who actually need them like healthcare workers on the front lines, etc.

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

#247

Post by armenarmen »

mattlutze wrote: post #141
geofft wrote: post #37

Earlier quoted context omitted.

Isn't price-gouging usually (and definitely in this context) about someone who bought an item at a standard wholesale price and is reselling it at a markup? That's not about the reward for producing it, that's about the reward for being in the right place at the right time. You can still try to argue that it's economically reasonable to reward people for being in the right place at the right time (to incentivize peop…

Price gouging is the supply side artificially raising prices significantly above normal to take advantage of a temporary imbalance in the anxiety vs actual threat being experienced by the demand side. The day congress declares war on Iran, if you significantly raise fuel prices at your gas station but the wholesale supply hasn't changed, you're generally trying to take advantage of the consumer's fear. We're for some…

Tangent sorry, but Congress hasn’t declared war since the last world war. America no longer declares war. It just invades.

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

#248

Post by _bxg1 »

rahimnathwani wrote: post #138
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…

"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." People hoarding aren't trying to create artificial scarcity. They are buying because they anticipate scarcity, and want to either (i) be prepared, or (ii) profit from resale. Hoarding has caused shortages which, in turn, justify the original hoarding. This…

> People hoarding aren't trying to create artificial scarcity

https://www.nytimes.com/2020/03/14/technology/coronavirus-pu...

> On March 1, the day after the first coronavirus death in the United States was announced, brothers Matt and Noah Colvin set out in a silver S.U.V. to pick up some hand sanitizer. Driving around Chattanooga, Tenn., they hit a Dollar Tree, then a Walmart, a Staples and a Home Depot. At each store, they cleaned out the shelves. Over the next three days, Noah Colvin took a 1,300-mile road trip across Tennessee and into Kentucky, filling a U-Haul truck with thousands of bottles of hand sanitizer and thousands of packs of antibacterial wipes, mostly from “little hole-in-the-wall dollar stores in the backwoods,” his brother said. “The major metro areas were cleaned out.”

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

#249

Post by geofft »

stale2002 wrote: post #226
geofft wrote: post #199

Earlier quoted context omitted.

> 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 the…

> haven't seen evidence that e.g. Charmin is saying, "Thanks to higher prices, we're able to see more toilet paper" Do you honestly believe that manufacturers are currently at 100% capacity, and have been at 100% capacity for years? That's ridiculous. Manufacturers always have spare capacity. One simple solution is that they can increase hours that the factory runs (ex, by giving overtime pay). Or they can delay upgr…

I'm not claiming that manufacturers are at 100% capacity.

I'm claiming (or more specifically, the person I quoted is claiming) that there isn't an underlying genuine shortage (i.e., that any inability to buy things in practice are caused by things other than "the product you want to buy literally hasn't been produced yet"), and so whether a manufacturer is at 100% capacity or 20%, they're still producing enough. That is, I think, the same claim you're making - that the world is not running out of toilet paper and all we have is local shortages.

I'm also claiming that if a manufacturer is not at sufficient capacity to meet demand, the cause is something other than a need for the per-unit price to go up. Generally, as production increases, the cost of production per item goes down. I certainly agree that manufacturers can take plenty of actions to increase capacity - I do not agree that those actions necessarily require them to raise prices.

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

#250

Post by EdgarVerona »

mhb wrote: post #217
cl0rkster wrote: post #191

Earlier quoted context omitted.

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…

There's another benefit of the signal sent by high prices. It encourages the use of alternatives. There are many substitutes for toilet paper including other paper products and bidets.

That is a good point, and if that was an outcome of this situation that'd be great, as long as people who otherwise can't afford/can't find toilet paper can get their hands on them. On a personal level I think bidets are fantastic. I'm not sure why they didn't spread in the United States.
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