Price Gouging and Market Failure
New Essays on Philosophy, Politics & Economic: Integration and Common Research Projects, Gerald Gaus, Julian Lamont and Christi Favor, eds., Stanford University Press, May 2010
34 Pages Posted: 21 Nov 2009 Last revised: 8 Jun 2013
Date Written: November 21, 2009
Price gouging occurs when, in the wake of an emergency, sellers of a certain necessary goods sharply raise their prices beyond the level needed to cover increased costs. Most people think that price gouging is immoral, and most states have laws rendering the practice a civil or criminal offense. But the alleged wrongness of price gouging has been seriously under-theorized. This paper examines the argument that price gouging is morally objectionable and/or the proper subject of legal regulation because of the context of market failure in which it occurs. It argues that even if claims of market failure or true, they do not generate these normative conclusions.
Keywords: price gouging, market failure, exploitation, price system, markets
JEL Classification: D41, D43, D45, D61, D63
Suggested Citation: Suggested Citation