[Moonman62]

I guess the hardware store should have raised prices appropriately so that people don't come in and buy up all the generators. Keep an item that is in demand at an artificially low price will cause the hoarding that you see.

My real world experience is that good businesses like Home Depot bring in extra supply before and after a hurricane and they usually stay open extended hours. People get what they want, and Home Depot does a great business, making lots of money at its usual prices or just a bit more to cover their costs. Everbody's happy and it's a win-win situation. So why should Home Depot and their customers be distracted from their good work just to keep a few charlatans from cornering the market?

[bvw]

That Home Depot example is fine, but says not a whit as to the vital need for price gougers when resources are in scarce supply. The HD example you gave removes "scarcity" as a factor in pricing. The question in scrace supply situations is how best to allocate scarce resources to those who most need them. And price gouging does that better than any scalable mechanism.

Allocation by some allocation board or authority does not scale well at all -- it works for a small number of resources and a small number of well-known of users, but becomes both expensive and ineffecient after that. And it's rare to find situtations outside of the interior of households and small cohesive organizations where users and usages are well-known enough to allocate well, to allocate better than free market pricing.

Laws against gouging and laws that setup price controls create situtations of dread shortage and complete unavaility usually exactly when scarce goods are most needed.