Price Stickiness Endangers Scientific Experiments Using Helium
There is a shortage of helium. But that shouldn’t be endangering high-value projects: a higher price can reduce the less important use of helium for party balloons or projects that can wait, while preserving the most essential uses of helium. But apparently there has been some reluctance to raise helium prices on the part of suppliers, resulting in rationing:
Vidoudez has spent countless hours calling or emailing just about every supplier that he could find.
“Most just either don’t answer or the ones that do answer say, ‘We don’t take new customers at the moment,’” Vidoudez said. “It’s been a real struggle.”
This is a good example of why those who raise prices when there are shortages are heroes, not the “price-gouging” villains they are sometimes made out to be. If you get a windfall because there is an unexpected shortage in what you sell, it would be great for you to give some of your windfall to charity, but keeping your price low is bad for society in such a situation.
Update, June 15, 2022: Of course, the “wealth effects” on scientific grants of fluctuations in helium prices can also be disruptive. A good answer to this, which physicists have pursued, is to have the equivalent of futures contracts for helium. Then the “wealth effects” of helium price fluctuations are zeroed out. Ideally, it is possible to take the money from the futures contract and not use the helium; that leaves the “substitution effect” (the incentive effect) of a price increase intact. And of course if the price goes down, the substitution effect is intact—one can buy more helium at the lower spot price if that is attractive.