[jimmaswell]

Exactly this. Why is Scrooge McDuck buying the entire supply of something somehow better than evenly distributing it? I can't believe people actually think making toilet paper $20 a roll is the correct outcome instead of rationing with price controls. Maybe it's the Ferengi mentality of people seeing themselves as the exploiters.

[hamandcheese]

If toilet paper was $20/roll, people would think twice before hoarding, and would probably also use less squares overall.

[hannasanarion]

Hoarding isn't the (entire) problem, a bigger issue is the sudden shift in consumption from commercial to consumer. Nobody is pooping in office buildings, schools, or shopping centers anymore, everyone is doing it at home. Producers that uses to sell 50/50 consumer to commercial are now selling 90/10 in favor of consumer and they can't reconfigure their production lines fast enough.

https://marker.medium.com/what-everyones-getting-wrong-about...

[kortilla]

And $20/roll would expedite the changeover pretty quickly.

[asdkjh345fd]

Not if the producers believe that this is temporary and will go back to 50/50 again soon. It isn't worth the cost of making big changes just to have to change back again in a month.

[lukas099]

It may incentivize them to invest in the ability to quickly change the ratio.

[Robin_Message]

For a once every hundred years event? Probably not.

[simonh]

If they thought it might increase to $40 a roll soon, they will hoard. They might not be able to hoard as much of it, but they might still do it. Doubling your money on $1000 worth of rolls is still the same outcome whether that represents 50 rolls or 500 rolls, excepting only the logistics.

[aianus]

Anecdotally, this fits with my observations at the grocery store in Canada.

All the regularly priced milk, chicken, and eggs were sold out around March 25th but the "organic" milk and chicken at double the price was still in stock as was the AAA steak and the expensive Omega-3 eggs.

It appears there is still a fair amount of price elasticity of demand even in a pandemic.

[jimmaswell]

And a lot of people would just have to go without, As opposed to everyone getting a little with price controlled rationing.

[AnthonyMouse]

I think this is the biggest flaw in your argument. If toilet paper was $20/roll, that wouldn't deter someone who has none in the slightest bit. They'd buy one roll and pay $20 in a second. But that guy who was trying to buy a thousand? He's thinking twice.

[neilwilson]

"But that guy who was trying to buy a thousand? He's thinking twice."

Why wouldn't he just borrow the money to pay for it, hoard the supply and then flip it back onto the market when the price hits $40?

You're assuming a finite amount of money, but the monetary system is necessarily elastic.

Then the hoard, because it has gone up in value, becomes collateral for more loans.

Whereas rationing necessarily solves the distributional conflict instantly.

Price auctions only work when the demand is optional and the supply is elastic.

[roenxi]

Because they are running an enormous risk of a 50 crates of toilet paper being driven up in a hastily hired farm truck direct from a commercial factory at $19 a roll. Then they lose money per roll and that has a crippling effect on their finances because debt magnifies gains and losses.

We know that the amount of toilet paper being produced matches how much is being consumed because it did pre-crisis and consumption/production aren't really changing. Any ramp up at all from the factories will quickly lead to a glut of the stuff. The problem is the commercial-private shift causing a mismatch between the orders for consumers and the supply for commercial toilets. If the price goes high enough someone will figure out how to match the two and it will happen really quickly. The price isn't going to climb after the initial spike; it is going to fall.

[Leherenn]

I think the issue here is that we are talking about toilet paper, which is not really vital. In this case, having people priced out for say 2 weeks before prices come down again is not the end of the world.

If we were talking about something really vital like food, those same 2 weeks become unacceptable.

It's a good thing that it did not happen at the same scale for food (supply is more elastic? demand is less elastic?) and that we can debate about an annoyance, not people starving.

[bb88]

> Why wouldn't he just borrow the money to pay for it, hoard the supply and then flip it back onto the market when the price hits $40?

Interesting data point: about three weeks ago a guy was selling single rolls for $5 a piece outside our development. He put his kids in gas masks and had them prance around with a big sign. I'm sure he wasn't doing it for the kindness of his heart.

[sokoloff]

Because at some point, TP will go back to $0.50/roll essentially permanently.

You can’t be sure that you’re buying on a sustained upswing in prices.

[TeMPOraL]

And yet this doesn't deter people from buying stocks.

[jimmaswell]

Yes it is going to deter someone who has none. Is it impossible for you to imagine someone who couldn't afford that premium so they resort to using the shower or something? And do you really think a millionaire is going to be deterred from buying too much in that instance?

[AnthonyMouse]

Someone who couldn't afford $20 for something that lasts more than a month? If this person exists it's because they place a below-average value on toilet paper, not because they don't have $20.

And there aren't enough millionaires for their toilet paper buying habits to have a meaningful effect on the market unless they each start buying millions of rolls, which is a ridiculous hypothetical with no chance of really happening.

[michaelmrose]

Rolls of TP don't last a month in most households. They normally last 1 to 2 days. You either own a bidet or need to see a doctor.

[xorcist]

> If toilet paper was $20/roll, people would think twice before hoarding,

The rational response to $20/roll is to buy as much as possible. It will be worth $40 soon.

[Camas]

In real life the problem isn't Scrooge McDuck buying the entire supply. It's everyone who buys a few extra just to be safe that makes demand rocket.

[alexmingoia]

The more you have to exchange for something, the more you're foregoing other forms of consumption. If toilet paper cost you your entire budget, you wouldn't buy toilet paper at all. You'd buy food instead. In that way, prices redirect your consumption to higher priority things. That's what is meant by "more important."

[kaitai]

Only if you have to think about money. What you point to is that poor and maybe middle-class people have to 'redirect' their consumption to 'higher priority things', which in some cases is equivalent to just going without.

Insulin, rent, or food? Ah, just prioritize, honey!

[SftwrSvior81]

Defining "more important" this way seems limited to one actor. In your original post, you talk about multiple actors, namely hospitals and individual people. Different actors are going to have different budgets and preferences. Suppose you consider toilet paper to be an absolute necessity but at $20/roll, it is not affordable to you. I, on the other hand, don't value toilet paper as much but my budget is much bigger than yours so I can afford and am willing to pay $20/roll. When looking across both actors, could we still say that the "more important" need was met?

[roywiggins]

If many people can't afford TP, they will start flushing other things, which will block everyone else's toilets.

[asiachick]

If I run out of TP and can't get any more at a reasonable price I will just use cloth towels and wash them right after use. Many people still use cloth diapers with their babies. Running out of TP is a first world problem.