Episode 84: Price-Gouging Bans Don’t Make Things Cheaper, They Make Them More Scarce

Imposing “price gouging” bans after a natural disaster doesn’t actually help anybody. On paper, it looks ideal. Shoppers who don’t have funds and didn’t prepare for the storm can still afford to buy everything, even if it’s completely last-minute and a bit of a race to the finish line. But the reality is that price-gouging laws don’t make things better, nor do they make things fairer. In the face of a category 1 hurricane like Florence, they just create more scarcity and destroy incentives to keep the supply chain moving. In the end, it doesn’t matter how low the price of your wares are if you can’t actually buy it. Join James Harrigan and Antony Davies as they delve into this topic and more on this week’s episode of Words and Numbers.

Show Notes:

Dominos’ CEO earned $8.6 million in 2016

Dominos will fix the roads

Foolishness of the week

Get a Dominos tattoo and get free pizza

Topic of the week: Price gouging

Cafeteria economists

Uber and surge pricing

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Antony Davies on Twitter

James R. Harrigan on Twitter

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