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If Prices Are Prevented from Rationing a Product Because of a Binding

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Essay

If prices are prevented from rationing a product because of a binding price ceiling, how is the scarce product rationed among potential buyers?


Definitions:

Priming

A psychological phenomenon where exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance or intention.

John Wayne

An iconic American film actor famous for his roles in Westerns and war movies.

Representativeness Heuristic

The representativeness heuristic is a cognitive bias where individuals judge the probability or frequency of a hypothesis by considering how much the hypothesis resembles available data.

Base-Rate Effect

A cognitive error whereby people judge the likelihood of an event by intuitive examples rather than by statistical evidence.

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