An economics professor uses the run on toilet paper to explain bank runs

One of the strangest manifestations of the threatened coronavirus epidemic in America is toilet paper hoarding.  Justin Wolfers, an economics professor at the University of Michigan, has put together a tweet thread explaining why people are hoarding toilet paper.  According to him, the motivation behind toilet paper hoarding is the same as the motivation behind runs on banks — people are afraid that, if they don't keep up with others who want the same finite resource, then the resource will be gone. The economics of toilet paper shortages is the same as bank runs. [thread] Even if you’re not freaked out about a pandemic, you worry that everyone else is & they’ll stockpile to 🧻, & you don’t want to be the left paperless. So you stockpile to avoid being shut out by others. — Justin Wolfers (@JustinWolfers) March 4, 2020 So you run and get toilet paper not because you need dozens of rolls, but because you...(Read Full Post)
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