In the aftermath of a disaster, there is usually a large shift in what
people need, what is available, or both. For example, people normally
don't use very much ice, but after a hurricane or other disaster that
knocks out power, suddenly (a) lots of people want ice and (b) ice
production is more difficult. Since people really don't want their
food going bad, and they're willing to pay a lot to avoid that, In a
world of pure economics, sellers would raise prices.
This can have serious benefits:
Increased supply: at higher prices it's worth running
production facilities at higher output. It's even worth planning,
through investments in storage or production capacity, so you can sell
a lot at high prices in the aftermath of future disasters.
Reallocated supply: it's expensive to transport ice, but [...]
First published:
January 17th, 2025
Source:
https://www.lesswrong.com/posts/tJnSkxhq9CzF4icb2/tax-price-gouging)
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