Tuesday, July 24, 2007

Panic Buying and Stupid Government

There are lots of floods around in England at the moment. They aren't affecting me yet, which is good. But the government in badly-affected areas has advised people not to panic buy. That is stupid.

Panic buying is an understandable reaction to the possibility of being cut off from supplies of water and food. You buy enough to last a couple of weeks. The problem with panic buying is that shops do not stock enough for everyone to last a couple of weeks. The aim in this sort of situation is to make sure that everyone gets enough to survive for however long it takes before easy access to food and water is restored, which means that me going to Tescos and buying all their bottled water is not helpful for everyone else.

But advising people not to do it is really stupid. Because then some people do it anyway, running the risk that there isn't going to be enough left for the people who don't. In other words, advising people not to do it automatically means that you are giving the people who ignore your advice more chance than the people who do not ignore your advice. In other words, it is discriminating against the people who think you are sensible and giving the people who don't trust you even more reason not to do so.

Introducing rationing - fine. Introducing non-linear pricing schemes, clever, if you can get them to work. Making an emergency law against panic buying then shooting anyone who breaks it - unethical, but it'd work. Saying "if this lasts longer than 5 days, we will make sure you have enough food and water. We'll fly it in if we need to." - good. But advising people not to panic buy, stupid, because too high a proportion will ignore you, making ignoring your advice the optimal strategy.

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