Capitalizing on hurricanes Irma and Harvey: $6,785 for an economy seat

This is the trick in your sentence. We're talking about aggregate demand and aggregate supply but at the individual level there is certainly the possibility that the price is too high for someone to buy.

Here's the problem, economic utility cannot be a moral guide in this situation, look at this example:

(1) Water is normal price but with a limit per customer or lottery.

(2) Water is very expensive and the richest person or people in town buy a lot and hoard it.

#2 generates a lot more economic utility, but we can all agree that it's not an optimal situation here.

>We don't need to bring coercion (AKA govt) into the equation, you can meet your own needs for creating a world that seems "fair" to you without resorting to violence.

Oh put the talking points away. Why don't you go ask some disaster survivors which is more violent: $100 for water sold privately by a gouger or government provided water? This is exactly the situation that government is created for.

An intersection exists somewhere, but not all violence is coercive, and not all coercion is violent.

When the government collects taxes from you, it is coercive. The underlying threat of violence is gated far from you. Imagine a government that didn't understand the full range of coercion, and only had violence in its tool bin for collecting government revenue. Then you wouldn't need two separate terms, as the government clearly isn't seeing any nuance either.

Maybe in a NORMAL F*CKING MARKET! Not a crisis. How long do you have to be creative when the water is rising in your living room? How quickly can you start an airline that charges reasonable rates when a hurricane is bearing down on your house? What is the economic incentive to rescue you neighbor from their roof during a flood?

Sorry for the yelling but jesus, you're suggesting "incentivizing" saving lives.

Also parent is saying ability to pay doesn't correlate well to need. Many people need plane tickets or water who can't afford sky high prices.

There's a proven algorithm to allocate scarce resources without price-gouging.

That algorithm is called "first-come-first-served-with-quantity-limits".

The solution is pretty obvious, require that companies don't raise prices during a disaster. That might mean they don't quite maximize profits, but it also gives everyone a shot regardless of their wealth. Anti price gouging laws are pretty common and are nearly universally popular.

What this meant was that people who weren't necessarily in all that much danger, or had plenty of time to evacuate via other means, used up all the tickets. But the ones that were really needy and couldn't use other evacuation means, E.g. pregnant women, were not even given the option of the higher price.

If water bottles were selling for 20 dollars each, and I were in an unaffected but relatively nearby area, I might load my truck with a couple thousand water bottles that I buy for 50 cents, drive for a day, and enjoy a big return. In this way, the market is extremely useful. People like me are motivated by profit incentives to move the resources that people in the disaster area need to them. This is because the water bottle market has a very low cost to enter.

Conversely, the airline market has a very high cost to enter. Even if I would like to take advantage of high prices, I can't get myself a passenger plane, necessary permits, agreements with airports, etc, in time to do anything about the hurricane. On the other hand, people with small private planes may be able to fly their planes down, and take on passengers, in a profitable way, and that may be an incentive for more of them to do so than would otherwise.

That's precisely it, it's just a theory and it doesn't apply here.

How are they supposed to increase supply of bottled water during a category 5 hurricane?

Not sure what the best solution is, though.

http://myfloridalegal.com/pages.nsf/Main/5D2710E379EAD6BC852...

> Florida Statute 501.160 states that during a state of emergency, it is unlawful to sell, lease, offer to sell, or offer for lease essential commodities, dwelling units, or self-storage facilities for an amount that grossly exceeds the average price for that commodity during the 30 days before the declaration of the state of emergency, unless the seller can justify the price by showing increases in its prices or market trends. Examples of necessary commodities are food, ice, gas, and lumber.

Of course! That's why we have government, and pay taxes, so that things like disaster relief can be executed without working about "economic incentives".

See health care. ducks

And yet

http://www.denverpost.com/2017/08/29/hurricane-harvey-canned...

And, no, resources aren't rushed to disaster areas if those that have to expend extra effort to do so will simply be punished.

I'd rather rely on those who've been delivering everything efficiently already than wait for the government to do it.

It's not clear to me that government doing this costs us less. Most of the cost is hidden away in the federal budget. At least when I am paying a high price for gas, I am paying for the actual cost of getting it to me, including paying for logistics.

In the event of a disaster, I assert the thing you're sat-solving for is "as many people as possible getting enough of a constrained resource to survive long enough to get out of the disaster condition". In my mind, that's both good and compassionate.

I'm having a hard time not getting snarky here because, to be honest, you don't seem to be arguing in good faith.

Say there is a water shortage and lots of hoarding resulting in high profits and a couple of deaths.

Is that outcome more efficient than forced rationing resulting in less profit and less death?

I'm trying to answer for the sake of debating - not necessarily my point of view.

First, regardless of how much the airline charges, there will be a fixed number of people that will get a seat.

Now, suppose the price is kept low, like $99. Maybe some people that don't want the seat that much will get it. They may have other options and wouldn't pay $200 for the seat, but think $99 is ok. Conversely, some people who value the seat much more (to the point they would pay $4000 for it) may not be able to get it. So you can argue that the seats will be attributed randomly, which is worse than basing the allocation on who wants the seats the most (well, then there's the issue that $5000 is peanuts for some people, and a lot for others, not sure how to answer to that).

Also, with the seats getting so expensive, the airlines may try to sell extra seats (re-routing planes for instance).

Finally, this happens all the time in different contexts. People go to all sorts of trouble because they don't have access to the best lawyers, doctors or can't afford their medication. It's not really an argument but if we are consistent, we shouldn't be shocked by one and not the other.

Conversely, suppose my whole family is healthy and able bodied, but we just don't feel like living in a temporary shelter set up in a high school gymnasium for the next week. I'm on the ball, and I check flights to my brother's city, and because I'm in early enough and the flights are normal price, I spring for tickets for the entire family. Other people who need the seats far more than I do are out of luck. I realize this, but I figure someone else will snap up the seats, regardless of whether they need them as little as I do.

The other moral argument for it is that this increase in "supply" at a higher price, also reduces the load on free/volunteer/government-provided relief and evacuation efforts. E.g. Rich/Wealthy/Middle-class people pay more so they don't have to worry about being evacuated and because they want to spend more money on mitigating risk. Those people then won't need to be transported out on the congested freeways and such.

Plus, the argument doesn't work on a service like airplane flights. Nobody can buy tickets and scalp them for profit.