Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, June 21, 2007

Some Good News From Washington - Someone Else Recognizes that Price Controls Are a Bad Idea

Posted by D. Daniel Sokol

The President's Council of Economic Advisers released a report yesterday blasting Gasoline “Price Gouging” Legislation.  Thank goodness someone in government other than the FTC recognizes that price controls are a bad idea.  The Council provides two primary reasons for why such legislation is a bad idea:

1.  “Price gouging” legislation that effectively places controls on prices exacerbates shortages and potentially increases lines at gasoline stations.

2.  The difficulty in defining “price gouging” would create an unnecessary regulatory regime with potentially high litigation costs and great uncertainty for sellers, enforcement agencies, and the courts.  These added costs and uncertainties would deter investment in new supply, increasing prices in the long run.

http://lawprofessors.typepad.com/antitrustprof_blog/2007/06/some-good-news-.html

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