Rip-offs in a captive market : By Denny Hatch : Denny Hatch's Business Common Sense
According to this article, there is a valid reason for screwing your customers and charging predatory prices. Actually its a lead in, I don't think its valid except in that one case.
So you don't have to read the whole thing, here is that case. The author gives lots of examples of predatory pricing beforehand then has this:
When Price Gouging Is a Good Thing |
Check out "Price Gouging Saves Lives," the 2004 story by David M. Brown from the Ludwig von Mises Institute. The premise is that, during a natural disaster, a store has the right to raise prices on limited amounts of essential merchandise so everyone can benefit rather than allowing a few greedy customers to clean out the inventory at the normal market prices. Brown writes:
But offering goods for sale is per se "taking advantage" of customers. Customers also "take advantage" of sellers. Both sides gain from the trade. In an unhampered market, the self-interest of vendors who supply urgently needed goods meshes beautifully with the self-interest of customers who urgently need these goods. In a market, we have price mechanisms to ensure that when there is any dramatic change in the supply of a good or the demand for a good, economic actors can respond accordingly, taking into account the new information and incentives. If that's rapacity, bring on the rapacity.