We have had a couple of different threads that have had some discussion on price gouging. Dealers selling guns at market value above MSRP were called unethical and worse.
Markets Work! The absolutely best way to allocate a scarce resource is through the market. Walter Williams is the best at explaining how and why this works out for the best of all parties. Indiana has a gasoline price gouging law that applies when the governor declares an emergency. Williams explains why this sounds good but actually fails to make the situation better.
These principles hold in everyday markets as well. I thought during the ammo shortage that dealers were not charging much as the ammo was worth. Did that help or hurt shooters that wanted ammo? By dealers selling at lower than market value others learned delivery schedules, bought up ammo, to resell at market value online and through classifieds. Did that help the guy that wants 500 rounds for his kids to shoot. Nope, he couldn't get to the store to beat the resellers, he had to buy from resellers and likely paid more than if the dealer had priced it at market value and it certainly was not as convenient.
Same goes for guns themselves, I get it, the Python is a classic name many never thought they might even be able to own. How should the dealer allocate the Python to the number of buyers wanting it'?
Lots of reading with great examples of how this all works..
https://www.creators.com/read/walter-williams/10/18/price-gouging-during-a-natural-disaster
Price gouging ? Walter E. Williams
https://www.richmond.com/opinion/co...cle_38b62a0e-1aeb-59f1-892c-93fd1572789a.html
https://fee.org/articles/texas-price-gougers-are-hurricane-heroes/
Markets Work! The absolutely best way to allocate a scarce resource is through the market. Walter Williams is the best at explaining how and why this works out for the best of all parties. Indiana has a gasoline price gouging law that applies when the governor declares an emergency. Williams explains why this sounds good but actually fails to make the situation better.
What I think would make gas available to those who really need it are rising prices. Suppose the pre-hurricane price of gas was $2.60 a gallon. As the hurricane approaches, dealers could let the price rise to $4 a gallon. That would give families who have enough gas to evacuate incentive to voluntarily forgo purchasing gasoline. Their voluntary decision would make more gas available for people who desperately need it. By the way, gas available at $4 a gallon seems more preferable than gas stations shut down because they have sold out of gas at $2.60 a gallon.
You might reluctantly agree that allowing prices to rise during a natural disaster helps allocate resources, but that's not the intention of sellers who raise prices. They are in it for windfall profit. I say: So what? It's what their actions accomplish that's important — namely, getting people to conserve during a natural disaster. Also, higher prices create incentives for suppliers of all kinds of goods — such as plywood, bottled water, generators and repair services — to pitch in to help to restore people's lives.
Suppose a New Jersey motel room rented for $125 a night prior to Hurricane Sandy’s devastation. When the hurricane hits, a husband, wife and their two youngsters might seek the comfort of renting two adjoining rooms. However, when they arrive at the motel, they find that rooms now rent for $250. At that price, they might decide to make do with one room. In my book, that would be wonderful. That decision would make a room available for another family who had to evacuate Sandy’s wrath.
New Jersey Gov. Chris Christie and others condemn this as price gouging, but I ask you: Which is preferable for a family seeking shelter — a room available at $250 or a room unavailable at the pre-hurricane price of $125? It’s not the intention of the motel owner to make a room available for another family. He just sees an opportunity to earn more money. It was not the intention of the family of four who made do with just one room to make a room available for another evacuating family. They are just trying to save money.
These principles hold in everyday markets as well. I thought during the ammo shortage that dealers were not charging much as the ammo was worth. Did that help or hurt shooters that wanted ammo? By dealers selling at lower than market value others learned delivery schedules, bought up ammo, to resell at market value online and through classifieds. Did that help the guy that wants 500 rounds for his kids to shoot. Nope, he couldn't get to the store to beat the resellers, he had to buy from resellers and likely paid more than if the dealer had priced it at market value and it certainly was not as convenient.
Same goes for guns themselves, I get it, the Python is a classic name many never thought they might even be able to own. How should the dealer allocate the Python to the number of buyers wanting it'?
Lots of reading with great examples of how this all works..
https://www.creators.com/read/walter-williams/10/18/price-gouging-during-a-natural-disaster
Price gouging ? Walter E. Williams
https://www.richmond.com/opinion/co...cle_38b62a0e-1aeb-59f1-892c-93fd1572789a.html
https://fee.org/articles/texas-price-gougers-are-hurricane-heroes/