| Abstrakt: |
Traditional law and economics allows no place for price controls. Yet public support for anti-gouging legislation has led to the enactment of a variety of legal regimes to control price hikes following natural and man-made disasters such as hurricanes and terrorist attacks. This Article provides an economic justification for such laws. First, the Article surveys the existing models of anti-gouging legislation. Then, it describes the traditional economic critique of price caps, a critique applied to anti-gouging laws. Finally, the Article argues that anti-gouging laws enhance economic efficiency by ensuring a functioning consumer market after the collapse of electronic payment systems on which the American economy now depends. The externalities of consumption in post-disaster environments mean that the costs of consumers forgoing needed products are not adequately captured by a reliance on market mechanisms. In addition, anti-gouging laws may offset market inefficiencies caused by the decision making heuristics of suppliers. This analysis suggests that current anti-gouging laws should be restructured to include a more discrete focus on areas actually affected by physical damage from natural or man-made disasters. [ABSTRACT FROM AUTHOR] |
