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Shortages can have worse effects than you thought

The gasoline shortages in the Sandy-ravaged areas of New Jersey and New York may be worse than you may have thought.  While New Jersey has turned to odd-even days at gas stations, their shortages are still severe.  Scrapping the misguided anti-price gouging laws would cure the shortages, but it does not look as if people are going to repeal those laws.

In class, we talked about how, during a shortage, the ones who own the items in short supply are in great positions to exploit their advangates over others who are looking for the item.  But consider bad things much be if those who  have gasoline are exploiting those looking for gasoline if they think they can get away with this:

http://newyork.cbslocal.com/2012/11/06/sandy-gas-woes-continue-people-trading-gas-for-sex-on-craigslist/

Is this really better than allowing sellers to price gougle.

-MC

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