Burying the Corpse, an inquery into gouging and hoarding

This post is meant as an easy reference (I couldn't find one online). I certainly don't claim to have invented the idea, or even the name.

Burying the Corpse refers to a well-known problem for anyone who hoards commodities.

The basic idea of hoarding in order to gouge is that the hoarder buys up enough of a particular commodity in order to restrict its supply and therefore raise its marginal price.

The problem for the hoarder is that, in order to make a profit, he has to sell the commodities he hoarded. The fundamental problem is that, if the hoarder has bought enough commodities to raise the marginal price, the sale of those commodities will lower the marginal price.

Burying the Corpse refers specifically to the problem of selling a large quantity of hoarded commodity while trying to maintain said commodity's high marginal price.

Additionally, while the marginal price of the hoarded commodity is high, other people will be heavily incentivized to sell whatever stocks of said commodity they can get their hands on.

One of the best examples of this is the Hunt Brothers' attempt to corner the silver market.

In general, the only way someone can make money in such a manner is to take a loss while "burying the corpse" (selling off commodities), but to use the change marginal cost as a way to manipulate a previously negotiated deal, which was indexed to the price on some (preferably illiquid) market.