Estimating Repugnance Toward Price Gouging With Incentivized Consumer Reports

78 Pages Posted: 19 Dec 2020 Last revised: 16 May 2022

See all articles by Justin Holz

Justin Holz

University of Chicago, Harris School of Public Policy, Students; University of Chicago

Rafael Jiménez Durán

Bocconi University - Department of Economics; University of Chicago

Eduardo Laguna-Müggenburg

Stanford University - Department of Economics

Date Written: December 17, 2021

Abstract

Thirty-four states prohibit price increases during emergencies and individuals take costly actions to report violators. We measure experimentally the willingness to pay to report sellers who increase prices of personal protective equipment. Over 75% of subjects pay to report even if others are willing to buy at those prices. We argue that reports contain information about a desire to prevent or punish third-party transactions at unfair or illicit prices. Reports are partially driven by a distaste for firm profits or markups, implying that the distribution of surplus between producers and consumers matters for welfare.

Keywords: repugnance, price gouging, reporting, experiment, COVID-19

JEL Classification: D63, D64, D91

Suggested Citation

Holz, Justin and Holz, Justin and Jiménez Durán, Rafael and Laguna Müggenburg, Eduardo, Estimating Repugnance Toward Price Gouging With Incentivized Consumer Reports (December 17, 2021). Available at SSRN: https://ssrn.com/abstract=3750332 or http://dx.doi.org/10.2139/ssrn.3750332

Justin Holz

University of Chicago, Harris School of Public Policy, Students ( email )

Chicago, IL
United States

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Rafael Jiménez Durán (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Eduardo Laguna Müggenburg

Stanford University - Department of Economics

Landau Economics Building
579 Jane Stanford Way
STANFORD, CA 94305-6072
United States

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