Price Gouging or Price Information?
The Answer Is Transaction Costs
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Price Controls Hinder Resilience
High prices during emergencies incentivize stockpiling of essential goods, which is discouraged by anti-price gouging laws. These laws prevent sellers from benefiting from increased demand, leading to potential wasted stock if situations change, such as a hurricane altering its course. Additionally, by keeping prices low despite shortages, these laws dissuade suppliers from reallocating resources to areas of greater need, ultimately undermining the ability to secure necessary supplies during crises. Thus, anti-price gouging laws diminish both stockpiling efforts and the flow of new supplies to affected regions.
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