News for hackers. Stuff that matters.

A comment on America produces enough oil to meet its needs, so why do we import crude?. Parent comment

Re:America produces enough oil to meet its needs, so why do ... by jsmith99 on Tuesday March 08, 2022 @02:07PM (#30604639)
During a shock is exactly when price controls are most destructive as they prevent an efficient allocation of the scarce supply to those with the greatest need (assuming willingness to pay is a proxy for that).
[ Parent | on HN ]
Re:America produces enough oil to meet its needs, so why do ... by marcosdumay on Tuesday March 08, 2022 @02:22PM (#30605012)
> assuming willingness to pay is a proxy for that

Hum... Does that assumption ever hold?

Willingness to pay is a proxy for your early earnings and ROI. It correlates very weekly to anything else.

[ Parent | on HN ]
Re:America produces enough oil to meet its needs, so why do ... by pydry on Tuesday March 08, 2022 @06:29PM (#30608827)
>Hum... Does that assumption ever hold?

Never

[ Parent | on HN ]
Re:America produces enough oil to meet its needs, so why do ... by evandijk70 on Wednesday March 09, 2022 @02:45AM (#30611926)
In extreme cases, this does not work.

Eg. in a desert with a supply of 9 water bottles and 10 potential buyers. All buyers have the same need (buy a bottle of water or die of thirst). In an efficient market, the price of a water bottle would go to the amount of savings of the poorest person + 1 cent. The poorest person will die of thirst.

[ Parent | on HN ]
Re:America produces enough oil to meet its needs, so why do ... by chii on Tuesday March 08, 2022 @08:30PM (#30609953)
> the greatest need

and the greatest ability to pay. "Need" has a moral component, which the market does not price in.

But still i would argue that price control do more harm than good.

[ Parent | on HN ]