341–350 of 450 posts
The crazy thing here is that they go after these gougers so aggressively for just selling a 20$ bottle of soap. And yet, predatory hospitals in the US can do x1000 times worse and not even get a slap on the hand. Hospitals are the #1 cause of bankrupcy in the US.
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. This is not a case of toilet paper suddenly costing more to pro…
> This is a case of consumers attempting to create small niches of artificial scarcity so that they can profit. A good example of this is in a related thread: https://news.ycombinator.com/item?id=22576225 The article describes how a couple of guys drove from store to store all across their state, buying up all of the antiseptic supplies in stock, and then trying to resell them online for as much money as they could p…
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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…
> it's (rightly) considered predatory and criminally anti-social It is this attitude that creates these opportunities. If we collectively understood that allow "surge" pricing is the fastest way to respond to a spike in demand and to quickly return to a more normal market equilibrium we would have fewer and shorter situations like this.
There's a pretty prevalent model for Risk Communication that compares the actual hazard (how bad something will be if it happens) against a person's outrage (how bad a person thinks a thing will be).
When the prevalent authority communicates risk in a way that lowers a person's outrage too low you can get inaction (like a president saying "don't worry" or “I think that whole situation will start working out.")
When the prevalent authority communicates risk in a way that raises a person's outrage (like surprising a population who were told to ignore a situation by then banning travel, closing borders and telling people we don't have testing capacity) you can get very strong reactions.
It's good when outrage matches hazard, that's where we want to be. But when hazard is, say, in the middle, and outrage is raised above that, you can end up with people feeling like they desperately need things.
At this point, they throw whatever money they have to at the things in order to mitigate their perceived hazard, and that's where opportunists and gougers come in. These people aren't acting rationally (they're perceiving a higher hazard than is real) and are vulnerable to ignoring market conditions in that "a free market works when both parties have perfect knowledge" sort of way.
So understanding this, we take actions that kneecap the unrestricted free market, because it doesn't have compassion and we want to be compassionate toward our neighbors that got too freaked out for their own good.
No one should try and take advantage of a vulnerable party, and it's a good thing to have safeguards against that.
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> 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 st…
Another example: https://www.thestar.com/news/canada/2020/03/13/amazon-blocks... > Ranga said that a six-pack of wipes, which might sell for $20 at Costco, could fetch four times that online, representing a “big opportunity.” He said the couple had spent about $70,000 on Lysol wipes and liquid cleaners over the past few weeks I don't think someone buying $70k of Lysol is doing it because they're worried they'll run o…
Earlier quoted context omitted.
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…
> it's (rightly) considered predatory and criminally anti-social It is this attitude that creates these opportunities. If we collectively understood that allow "surge" pricing is the fastest way to respond to a spike in demand and to quickly return to a more normal market equilibrium we would have fewer and shorter situations like this.
No thanks. I'd prefer inflicting a social cost to disincentivize the behavior in light of the taint on one's reputation for doing it.
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The point is that capping the price of e.g. masks means _fewer masks_ are produced, which is worse for stopping the pandemic.
Price gouging laws typically apply at the consumer point of sale, I'm not sure they prevent a higher price from factory to store.
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Yes, for some reason people complaining about the supply-demand economics of price gouging laws seem to think Clorox, Charmin, Kleenex, etc are the ones jacking up the prices of supplies... Manufacturers producing enough quantities to sell is not the issue. The assholes that swoop in and buy out all the stock in a store temporarily to quickly turn around and sell the items for much more are doing the gouging. It's li…
> Clorox, Charmin, Kleenex, etc are the ones jacking up the prices of supplies... In a shortage situation, I suspect they dial-up the production of the higher-margin product lines. The house-brand manufacturing line won't be the one that gets the extra shifts or equipment installed.
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…
Earlier quoted context omitted.
Stores and manufacturers aren't actually charging increased prices in the majority of cases here. It's people buying out those stores and selling. If manufacturers don't see the increased prices the Econ 101 logic breaks down.
They should be charging increased prices. They should have charged increased prices the moment demand went up (like Uber surge pricing). That would have snuffed out the speculators right quick. One reason they don't do this is because of the attitudes illustrated in the comments here. People irrationally believe that surge pricing in this case is wrong and the negative response by their customers outweighs the benefi…
The issue isn't manufacturers, and only retailers in that they failed to implement a purchase limit per customer given news of a pandemic.
You want the maximum number of people with enough supply to get by. Not to have large swathes of the population to go without because someone decided to usurp the logistics network in search of price gouging opportunities.