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Anti‐Hoarding Laws: A Stock Condemnation Reconsidered
Author(s) -
Wright Brian D.,
Williams Jeffrey C.
Publication year - 1984
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240923
Subject(s) - hoarding (animal behavior) , monopoly , monopolistic competition , irrational number , economics , stock (firearms) , microeconomics , business , law and economics , market economy , mechanical engineering , ecology , geometry , mathematics , foraging , engineering , biology
Economists have regarded anti‐hoarding laws as irrational reactions to nonexistent monopoly in the storage of grain. This paper shows that anti‐hoarding laws cannot be rationally directed against a monopolistic storer, for he will always store less, not more, than would be stored under competition. But seemingly perverse competitive storage, in the form of excessive stockholding, can arise when a price ceiling distorts the market. Additional public storage exacerbates this perverse private behavior, and may even induce behavior that appears to be active market manipulation. Under such circumstances, anti‐hoarding laws can be desirable second‐best measures.