Price Gouging

"Good #g is worth $x to Joe Bloggs" is ambiguous.

If it means "is worth exactly the same as" then you can't deduce it from the fact that Joe buys #g for $x.
If it means "is worth at least as much as" then you can deduce it, but you can't get from there to "both sides benefit equally".

If Joe gives Bill $x for good #g, you can deduce two things:

#g is worth at least as much to Joe as $x is.
$x is worth at least as much to Bill as #g is.

The amount by which Joe benefits is the amount by which he prefers #g to $x; the amount by which Bill benefits is the amount by which he prefers $x to #g. There is no reason why these amounts have to be the same.

No, if a good is worth the same amount to two people, then that's the value of the good. You can't measure what people's perceived value of a good is. You can measure selling price. --EvanCofsky

Suppose you're fatally ill and I have something, entirely valueless to me before, that can cure you. And suppose no one else you can get hold of has an equivalent something. If I hadn't known of your illness, I'd have been glad to give you the thing for free; but now I know you need it, I tell you I'll sell it for $100,000. Clearly you'll buy, since your only other option is death. And this thing is clearly worth the money to you. That doesn't stop my behaviour being vile. And the reason why it's vile is precisely that I'm taking unfair advantage of your need. ValueDrivenPricing, in fact.

--GarethMcCaughan

So what? Clearly, if I can't pay, I die, and you've lost a customer. Or, also clearly, my life is worth $100,000, and I have it, so I'll pay, and you've done me a favor by charging me a price I can afford, when you clearly could charge me more. Obviously, if you get $100,000 for a good, then it was worth that much to you, and if I pay $100,000 for a good, it was worth that much to me. Any attempt to value a good outside a transaction is meaningless. Also, what if another person is willing to pay $200,000 for it? Should I sell it to the person offering less money? --EvanCofsky

Is this a zero sum game?

It may or may not be, but you won't know until after the the transaction. Both parties before the transaction perceived that their own positions would be better off after the trasaction than before, so they entered into it. Chances are, if the drug worked, the dying man was restored to health, which enabled him to enter into future transactions, and the purveyor of snake oil gained a nice sum of money, which will enable him to enter into future transactions. --ec

It's unethical to profit (excessively) off the pain of others. This example is also an example profiteering. Profiteering is a bad thing. Definitely in this case, when it is a form of extortion.

Why? So if someone else is in pain, and I have something which will ease that pain, I should only sell it at a loss? -- ec

No, but you should be compassionate. If the roles were reversed, would you like to be price gouged? The problem with making moral decisions based on economics is that the decisions aren't moral at all. Maybe you're a nihilist or an EliminativeMaterialist?. Then you'd be quite happy with CorporateGovernment.

So in order to be compassionate, I need to sell my wonder drug to the lowest bidder? What if I only have one? I can't use this drug personally, but I can sell it to someone who can. I'd actually like to buy something like this myself from someone who won't feel like they're forced to give it away, so that if I need to sell this person something, I won't also have to give it away. How is it moral to force someone to give something away? Isn't that a moral judgement, too? Is it now okay to steal if you need to, but not otherwise? And who determines this need? I need a Porsche, or I'll die. I probably won't get one. How does Porsche know if I'm telling the truth or not? They don't. If I am, and I will die without a Porsche, must they now give me one?--ec

No one is forcing you to be compassionate. That is impossible and immoral.

Exactly my point.--ec