But if others panic buy, the optimal strategy for you is to do the same, otherwise you’ll be left without toilet paper.
In the case of toilet paper, the government acting as guarantor might involve holding a strategic stockpile of toilet paper.
In 2008, for example, the market crash engendered by the subprime mortgage crisis left multiple Australian banks vulnerable to depositor runs.
One solution is a market mechanism – allowing the price of toilet paper to increase to reduce demand.
If everyone acts normally, we have an equilibrium: there will be toilet paper on the shop shelves, and people can relax and buy it as they need it.