Serious Tuesday Question: Price Surging Edition
Uber got in significant PR trouble yesterday for purposefully instituting price surging during the Syndey Hostage Crisis.
Price surging seems to be one of those unsolvable issues. It is much loved by economists and much hated by many people who are not economists.
The answer for non-economists is that it seems to violate an innate sense of fairness and morality because people see the price surgers as taking advantage of a random and unpredictable act like extreme weather conditions or surprise violent situations to increase profits. The pro-price surging camp argument seems to be that price-surging sends signals to other people that there is money to be had in a dire situation and more product will fill the market and/or people will do subconscious mental calculations about how much of a product they need and will not overstock and horde.
My question is where does the burden lie in bridging this divide or in understanding the arguments of the other side? The big issue with ideological debates is that seemingly every one wants the burden of understanding to be on the opposition. Many the price-surgers do have points about supply and demand and rationing (though I doubt they would support the Bloomberg soda tax which worked on similar logic) but there can also be a social-moral-ethical point about basic decency and fairness and taking advantage in an unfair situation. It is a general and long principal of contract law that contracts with uneven bargaining power deserve extra scrutiny and can be partially or wholly voided by courts on grounds on procedural and substantive unconscionability. We are no longer a caveat emptor society.
Price surging during a crisis and purposefully admitting to it just gives most people more evidence that uber has an asshole problem.
The price surgers tend to bang up and down that people just simply don’t understand economics by opposing price surging but isn’t there an argument that economics is not everything and there are valid moral and ethical considerations that should override economics in certain circumstances?
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