Allowing those who are willing to pay any price to do so while still serving the community by not price gouging everyone, especially those who are price sensitive but are still desperate.
When the supply of something is lower than the number of people that are price sensitive and desperate, capping prices will still leave desperate people without what they want. Many mechanisms that appear to be more fair, like free lotteries, end up distorting things in other ways: If it's a free lottery, you bet people will sign up without being desperate.
One might have an aesthetically favorite version of deciding who is going to go without, but there's always going to be a problem with just that. What really helps is increasing the supply of what people want. And for that, it's hard to beat increasing rewards to the suppliers.
Don't high price signals in an efficient market serve the community by increasing supply? It's hard to argue that there's a better way to do it that doesn't inadvertently decrease the supply and instead become a lottery
I think this would rely on an assumption that there is always supply available to draw on.
At some point there is no supply to alleviate the problem. Some effects may be dampened by new ride share drivers signing up, but even then, not everyone wants to be a driver regardless of compensation.
I don’t know of a good approach to free-market around a supply limitation in the short-term.
Prices cannot solve all supply problems. We cannot have 2 million teenagers dating the starlet-du-jour. But prices typically can increase the supply quite a bit, while most techniques that avoid prices will not increase supply at all.
So if the goal is to maximize how many people get what they want, prices, plus some mechanism to avoid temporal speculation (for instance someone saving their sealed pokemon cards for 20 years hoping for price increases) makes the most sense.
That's unlikely for sudden and short-lived surges, isn't it? There probably won't be plenty of new rentals popping up in LA because of potentially high demand during the next wildfire.
That is an incoherent, meaningless sentence. You think people should be allowed to pay high prices, but no one should be allowed to accept their money? What do you think it means to be allowed to pay for something?
One might have an aesthetically favorite version of deciding who is going to go without, but there's always going to be a problem with just that. What really helps is increasing the supply of what people want. And for that, it's hard to beat increasing rewards to the suppliers.