Are Price Controls Fair?

Abstract

The neoclassical economic model predicts that price controls lead to deadweight losses. In experimental auction markets, actual deadweight loss is greater than what the neoclassical model predicts, because access on the buyer side under price controls is more random in practice than what the neoclassical model predicts. The randomness that accounts for losses being larger than predicted further implies not only that price controls are no general cure for unfair access but that price controls can be a source of such unfairness.