The purpose of price gouging laws is to prevent excessive pricing and profiteering in a state of emergency.
But price gouging laws in the US, exemplified by those enacted by state governments, were generally designed in anticipation of particular types of emergencies or natural disasters and as a result may embody approaches that strain to address the economic effects of novel emergencies such as the COVID-19 global pandemic.
In this CPI Antitrust Chronicle article, Mary Beth Savio and Tim Snail discuss challenges that arise in applying existing price gouging laws in the wake of widespread economic shocks with long-lasting dimensions and explain how economic analysis and modeling may help sort out these issues.
