Economics @ ITT

The Problem with Price Gouging Laws

Posted in economics by ittecon on July 23, 2013

Many states have anti-gouging laws that curb price increases during disasters. In California, for instance, the maximum that retailers can raise prices after an emergency is 10%. Since this minimal upcharge wont effectively temper demand, limited supplies end up being rationed on a first-come, first-serve basis. While many view this policy as “fair,” gouging laws have two key drawbacks…

via The Problem with Price Gouging Laws – Rafi Mohammed – Harvard Business Review.

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