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A Price Theory of Price Gouging by Scott Duke Kominers,Piotr Dworczak is a book available to read on EtoBox.

What is A Price Theory of Price Gouging about?

AbstractWe propose an economic definition of price gouging: Price gouging occurs in a com-petitive market when lowering the price from the market-clearing level would increase total Utilitarian welfare. We then use price-theoretic tools to characterize determi-nants of price gouging in a setting with income heterogeneity and non-quasi-linear preferences that induce a motive to redistribute across agents. The circumstances un-der which price gouging occurs in our framework align with the contexts covered by existing anti-price gouging laws. By proposing a definition of price gouging that does not appeal to any non-economic notions of (un)fairness or excess, we hope to provide a pathway for follow-up theoretical and empirical research.Keywords: price gouging, price control, equity-efficiency trade-off, market designJEL codes:C78, D47, D61, D63, D82

Author

Scott Duke Kominers,Piotr Dworczak

Published

2025

Language

EN