Just off the top of my head, special arrangements can mean:
[ul]
[li] Selling things you don’t need to get the extra money for the webcam.[/li][li] Going halves with someone else and then sharing the webcam.[/li][li] Trading the webcam for something equal to its new value.[/li][li] Taking out a new line of credit you may otherwise not have done and buying the webcam with that.[/li][/ul]
Y’know, normal stuff.
I dunno. It seems to me that price-gouging happens mostly when a company creates an artificial shortage of something.
Also, when you buy stuff online, the prices are often set by algorithms, and companies may not even realize immediately that they are doing something that could be considered price-gouging.
Have you ever seen some paperback book priced at over $1,000 on Amazon? It’s because it’s a very low demand book that few people have in stock, and no one has more than one of, which, simply by coincidence, three people buy is a short space of time. The algorithm sees a high demand for a scarce item, and prices it accordingly. It fixes itself, though, when another one doesn’t sell for eight months, and the price bottoms. The someone buys one, and the price returns to some more normal market amount.
I’ve never done it, but I know a couple of people who wanted an item that was exorbitantly priced-- one wanted some low-tech appliance, like a can opener, that was priced at something like $12,000. She emailed the company to ask “What the hell?” and they emailed back that they were not aware the algorithm had done that; please look again, and it was priced around $8.75.
So if something online has what seems like a ridiculous price, or has increased by 5000% in two days, contact the company.
Bzzz. You don’t know this. That’s the whole point behind price-gouging. By definition it’s a short-term unexpected event. If both you and the consumer know that a long-term structural change is happening both sides can make plans to adapt, thereby negating the premise that a 1000% increase can be sustained. Just as much to the point, if you are using a 1000% markup you’ll lose all your business to the seller with a 900% markup and so on down to a new equilibrium point.
Ask any economist.
Sounds like another way is just to do what states with anti-gouging laws such as Texas do: Ban price gouging, but also put limits on how much people can buy (such as two packs of toilet paper per person.) Then you have normal prices that everyone can afford, and also ensure a fair, rationed supply for everyone.
Of course, some people can try to cheat the system anyway, but price gouging isn’t the only way to ration the supply.
(But technically it’s not the state law that rations it, it’s the individual stores such as Walgreens or HEB that are putting in the limit of 2-TP per person.)
Right now, we have millions of people working from home who would otherwise be at work. The demand for teleconferencing equipment has gone through the roof. Consumers can make plans for the future, but those plans aren’t going to help them today.
Today, there exists a much higher demand for webcams, and this is reflected in the price. Why wouldn’t webcam manufacturers ramp up production in response? It’s not like it’s difficult to descale after the crisis has passed.
And sellers are motivated to get as much money as possible. A seller charging a 1,000% markup may be undercut by another seller charging a 900% markup, but if he notices that he’s selling out as quickly as the guy selling webcams at 1,000% markup then he’s got no reason to charge less. In crises, demand is the primary driver of price.
There’s also the fact that people generally ascribe higher value to higher priced items. Oddly, this holds true even when people know they’re being gouged. If you come in and start selling webcams at the normal market rate, most people will presume there’s something wrong with them
and leave you alone. You may well end up selling fewer units than your gouging competitors.
Let’s recap.
You: The free market will take care of it!
Me: The market will work but not in the way you describe.
You: The free market doesn’t always work!
Me: Ummm.
I agree with the others. In response to this “rationing” what you have is that people without jobs line up when the store opens and take along their brothers, sisters, aunts, uncles, cousins, spouses, pets, in-laws, etc. who all buy the allotted 2 packs per person and when the working people get off work, there is nothing left.
As Sam Stone said, higher prices stop the hoarding. At an inflated price, nobody will hoard; they will buy only what they need and there will be plenty for everyone without fistfights in line.
On day one of Econ 101 everyone is taught that taxes are deadweight losses, free trade is good, minimum wage, rent control, and anti price gouging laws are bad. These are universally accepted things among economists, but political pressures will always win out.
And in this world, trickle-down economics raises the living standards of even the poorest people, such that we can eliminate food stamps if we only cut taxes enough.
This world not being the real world. Gotcha.
What on Earth do you think you’re “recapping”? That’s not an accurate or justifiable restatement of my position. In fact, I’m not sure what it is.
Try again.
If a webcam seller tries price-gouging, use your phone as a streaming video source. Apps exist.
If a TP seller tries price-gouging, buy a cheap attachment turning a squeeze bottle into a bidet.
If every commodity seller in town price-gouges, you’re fucked by the illegal cartel. Seek justice.
Don’t drop this steamer into GD without some proof to back it up.
You DO have proof to back this up, right? You have proof that people (without jobs, natch) are dragging their relatives (jobless as well, yes?) into stores to get past the 2 pack limit on toilet paper?
Economically speaking, price gouging DOES work to ration supplies of scarce items. And, just like all supply and demand based rationing, it impacts the poor more than the rich. A poor person who just got their hours cut is going to see a 6 pack of TP for $25 very differently than the wealthy person. While we want both of them to decide “I’m not going to fill my cart with TP” there are other ways to accomplish this besides crushing the poor person’s budget with an inflated price.
But we’ve already been assured that special arrangements to acquire these items are already in place for the [DEL][COLOR=“Black”]needy[/DEL][/COLOR] poor.
And really, once this pandemic blows through the price of undamaged lungs is gonna skyrocket, the poor are gonna make money hand over fist!
CMC fnord!
This isn’t exactly the sort of stat that news agencies would keep tabs on, but yes, there have been anecdotes of people trying to sneak past the 2-TP/person rule by splitting up the family into separate purchases (mother, father, adult son, etc.) in such a way that the store and clerks wouldn’t catch on that these were all members of a nuclear family and instead believe they were separate people buying items for themselves.
The notion of dragging in nieces, nephews, aunts, uncles, grandparents, etc. into the scheme is farfetched, but it is certainly plausible that families have gotten away with the 2-TP/person rule by doing it this way.
You have failed Econ 101 once again, and by espousing the exact same thing that was shown to be incorrect in a previous thread.
I am honestly curious if you have ever taken Econ 101.
He was pretty specific that it would be the jobless doing this, lining up with the rest of their unemployed families before the store opens to drain the store of TP.
In the real world, while people DO get around the 2 pack limit, it is actually a very effective way to ration limited supply items. So effective, that stores routinely do it for deeply discounted loss leaders.
What if I ask Nobel Prize winner Angus Deaton?
Disheveled? My gf spends the same amount of time doing her wardrobe, hair, and makeup working at home as she did going in to work. between calls and meetings she fixes her hair and makeup.
Just to take a slightly different track on this question, let’s talk about hand sanitizer.
The demand for hand sanitizer has sky rocketed to the point that companies that were making it are ramping up production (purell), companies that were in related business are adding product lines (Mary Kay), and companies that might normally be ingredient suppliers are not manufacturers (distilleries). This means that the demand for ingredients has sky rocketed. The price of bulk drinking ethanol has increased about 15% in the last week to close to $7/gallon and I’ve had people who had it in stock try and sell it to me at $18/gallon. Obviously the last guy is an asshole and we chose not to do business with him.
But lets say that we did and we buy $18/gallon 96% ethanol which brings our cost to make a 4 oz bottle from $0.53 to $1. The price to the consumer has doubled due to consumer demand but the company’s margins have shrunk. The end user sees in a crisis that prices have doubled and accuses us of price gouging.
It is very likely this is going on with a lot of critical supplies where people are engaging in bidding wars to get ingredients to meet customer demand which is driving up the price to the end consumer. We know it is going on with health care since we hear about bidding wars for ventilators and I’m seeing it with hand sanitizer. I don’t know TP or webcams specifically but I wouldn’t be shocked to see bidding wars going on in the back ground. If that’s the case, I’d vote capitalism. If its just one guy seeing if he can set his family up for life during a time of need I’d guess price gouging.
Rationing can prevent people from hoarding but it does nothing to increase supply. Probably does not matter in toilet paper because I doubt people are using more than they otherwise would, they are just using it at home instead of work. But in things like hand sanitizer or web cams rationing would just mean that the shortages last alot longer.
Raising prices solves the hoarding problem and the shortage problem at the same time.