Price Gouging in a Pandemic

80 Pages Posted: 13 Jan 2021 Last revised: 10 Apr 2021

See all articles by Christopher Buccafusco

Christopher Buccafusco

Yeshiva University - Benjamin N. Cardozo School of Law

Daniel J. Hemel

University of Chicago - Law School

Eric L. Talley

Columbia University - School of Law; European Corporate Governance Institute (ECGI)

Date Written: January 1, 2021


The ongoing COVID-19 pandemic has led to acute supply shortages across the country as well as concerns over price increases amid surging demand. In the process, it has reawakened a debate about whether and how to regulate “price gouging.” Animating this controversy is a longstanding conflict between laissez-faire economics (which champions price fluctuations as a means to allocate scarce goods) and perceived norms of consumer fairness (which are thought to cut strongly against sharp price hikes amid shortages). This article provides a new, empirically grounded perspective on the price gouging debate that challenges several aspects of conventional wisdom. We report results from a survey experiment administered to a large, nationally representative sample during the height of the pandemic’s initial wave. We presented participants with a variety of vignettes involving price increases, eliciting their reactions along two dimensions: the degree of unfairness they perceived, and the legal response they favored. Overall, we find that participants are more tolerant of price increases than either the existing behavioral economics literature predicts or most state price gouging statutes countenance. But we also find that price fairness perceptions can be highly sensitive to context. For example, participants are much more tolerant of moderate price increases if they previously are asked to contemplate large price increases. Moreover, participants are substantially more willing to accept a price increase when it is accompanied by an apology and/or a public-minded rationale (such as supporting furloughed employees). We explore the implications of our findings for behavioral economics, pricing practices, and legal reform.

Keywords: price gouging, consumer fairness, behavioral economics, COVID-19, survey experiments

JEL Classification: K12, K29, M31

Suggested Citation

Buccafusco, Christopher J. and Hemel, Daniel J. and Talley, Eric L., Price Gouging in a Pandemic (January 1, 2021). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 921, Cardozo Legal Studies Research Paper No. 626, U of Chicago, Public Law Working Paper No. 762, Columbia Law and Economics Working Paper No. 652, Available at SSRN: or

Christopher J. Buccafusco

Yeshiva University - Benjamin N. Cardozo School of Law ( email )

55 Fifth Ave.
New York, NY 10003
United States

Daniel J. Hemel (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

Eric L. Talley

Columbia University - School of Law ( email )

435 West 116th Street
New York, NY 10025
United States


European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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