However, forbiding price gouging also disincentivise agents from creating conditions that they can gouge others.
one extreme example: if I can price gouge water, I will be incentivised to go around poisoning all other water source to sell my water at a premium.
since I can not sell my water at a higher price, I am not incentivised to destroy water resource.
This is worth considering, but I basically expect the rest of the legal system to disincentivize this hard enough, and it doesn’t seem obvious that firms can tacitly create these conditions in order to create plausible deniability (as they can with eg tacit collusion).
I am not sure how true is this, but my friend in comsumer protection agency told me that after a particular severe weather event there were a conspiracy to raise roof repair price between most trade workers in the area by not competing on price before the agency crack down on it.
Not even sure if the crack down had any effect to be honest.
I can see the argument that this is natural price raise due to increase demand, but look at it another way it could be seen as artificial reducing supply to increase price.
This is worth considering, but I basically expect the rest of the legal system to disincentivize this hard enough, and it doesn’t seem obvious that firms can tacitly create these conditions in order to create plausible deniability (as they can with eg tacit collusion).
I am not sure how true is this, but my friend in comsumer protection agency told me that after a particular severe weather event there were a conspiracy to raise roof repair price between most trade workers in the area by not competing on price before the agency crack down on it.
Not even sure if the crack down had any effect to be honest.
I can see the argument that this is natural price raise due to increase demand, but look at it another way it could be seen as artificial reducing supply to increase price.