Setting low prices might mean the few gallons of gas, bottles of water, or flights that are available are allocated to people who get to them first, or who can wait in line the longest, rather than based on who is willing to pay, but it’s not clear that these allocations are more egalitarian.
If the sellers put caps on how many items can be bought by any given buyer, that makes it more egalitarian. Price gouging obviously makes things far less egalitarian by capping by willingness to pay, which varies massively.
The main question is whether willingness to pay correlates with need or with wealth or with mental illness or with greed, to which the answer probably is “all four”, though it’s unclear how much, and the quantities really matter. “Everyone works together” seems like a plausibly-good heuristic during a natural catastrophe, both to minimize conflict, and because natural catastrophes impact a geographic area and so plausibly everyone has similarly high needs.
I disagree with that being “the main question” because:
High prices simultaneously increase quantity supplied and reduce quantity demanded. The OP is foregrounding the supply effect but your comment is purely focused on the demand effect.
It’s possible for willingness-to-pay to correlate poorly with need, but for ability-to-procure-underpriced-items-during-a-shortage to correlate even more poorly with need. For example, the latter might involve having time to wait on line, or savvy ability to know where supplies will open up next, or even worse, being friends with the shop owner, being the police chief, etc.
If a shop charged a high price AND had a cap on how many items can be bought by any given buyer, people would still be about equally angry about the price gouging.
Right, when I said “the main question”, I meant the main question for the local allocation only, in response to “it’s not clear that these allocations are more egalitarian”.
Evidence from wartime rationing is that given a per-buyer cap, people are less angry about price rises. Or perhaps war creates more solidarity than natural disasters.
Maybe a compromise is possible where merchants are allowed to raise the price provided that they have a per-buyer cap and sell their stock quickly.
If the sellers put caps on how many items can be bought by any given buyer, that makes it more egalitarian. Price gouging obviously makes things far less egalitarian by capping by willingness to pay, which varies massively.
The main question is whether willingness to pay correlates with need or with wealth or with mental illness or with greed, to which the answer probably is “all four”, though it’s unclear how much, and the quantities really matter. “Everyone works together” seems like a plausibly-good heuristic during a natural catastrophe, both to minimize conflict, and because natural catastrophes impact a geographic area and so plausibly everyone has similarly high needs.
I disagree with that being “the main question” because:
High prices simultaneously increase quantity supplied and reduce quantity demanded. The OP is foregrounding the supply effect but your comment is purely focused on the demand effect.
It’s possible for willingness-to-pay to correlate poorly with need, but for ability-to-procure-underpriced-items-during-a-shortage to correlate even more poorly with need. For example, the latter might involve having time to wait on line, or savvy ability to know where supplies will open up next, or even worse, being friends with the shop owner, being the police chief, etc.
If a shop charged a high price AND had a cap on how many items can be bought by any given buyer, people would still be about equally angry about the price gouging.
Right, when I said “the main question”, I meant the main question for the local allocation only, in response to “it’s not clear that these allocations are more egalitarian”.
Evidence from wartime rationing is that given a per-buyer cap, people are less angry about price rises. Or perhaps war creates more solidarity than natural disasters.
Maybe a compromise is possible where merchants are allowed to raise the price provided that they have a per-buyer cap and sell their stock quickly.