Document Type

Conference Proceeding

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Journal Title or Book Title

Northeast Business and Economics Association (NBEA) 2020


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PUBLISHED BY THE NORTHEAST BUSINESS & ECONOMICS ASSOCIATION © 2020 The Northeast Business & Economics Association reserves the right to publish the Proceedings in both print and electronic formats. The individual authors retain the copyright over their own articles.


Pricing a product is considered an important component of the marketing mix that induces consumer behavior. During the 2020 Covid-19 pandemic, price gouging emerged from obscure rarely litigated business law to sensational above the fold headlines. $79.99 hand sanitizer went from a ridiculous pricing decision to an abuse of power and a criminal offense. This paper will begin with an overview of common pricing strategies and then examine the limits placed on pricing in the form of laws which prohibit price gouging. While many of the jurisdictions which make short term increases in the price of certain goods and services illegal, the laws vary as to the definitions and requirements of the necessary elements of a price gouging violation. The political reasons for price gouging laws albeit seemingly obvious, will be examined. The safety and consumer protection arguments will be discussed in the context of almost universal opposition by economists of price gouging regulation. Finally, if price gouging does not protect consumers and if artificial legal parameters of prices actually intrude on healthy appropriate market forces, why do price gouging laws exist in 34 states and in the federal law? What alternatives to price gouging laws would yield a more efficient marketplace and concurrently meet the government’s duty to protect consumers and citizens’ health and safety during a state of emergency?

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