Economic Policy and Market Regulation Part 3
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Transcript of Economic Policy and Market Regulation Part 3
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 1
Economic Policy and Market Regulation
Part 3
Dr. Stefan KoothsBiTS Berlin
(winter term 2013/2014)www.kooths.de/bits-ep
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 2
Outline
1. Introduction and Overview2. Market Mechanisms and Government
Interventions3. Externalities and Public Goods
Technological externalities Public goods and common resources
4. Competition Policy and Regulation5. Ordoliberalism and the Social Market Economy6. Summary: The Key Lessons Learnt
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 3
Technological vs. pecuniary externalities
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 4
Positive externalities: Private and social utility
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 5
Negative externalities: Private and social cost
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 6
Policy instruments: Incentive-based vs. command-and-control
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 7
Criteria: Static efficiency, dynamic efficiency, and effectiveness
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 8
Moral suasion
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 9
Nationalization
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 10
Public orders
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 11
Pigou-taxes/subsidies
Arthur Cecil Pigou(1877—1959)
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 12
Cap-and-trade (example: pollution permits)
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 13
Bargaining: The Coase theorem
Ronald Coase(1910—2013)
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 14
Outline
1. Introduction and Overview2. Market Mechanisms and Government
Interventions3. Externalities and Public Goods
Technological externalities Public goods and common resources
4. Competition Policy and Regulation5. Ordoliberalism and the Social Market Economy6. Summary: The Key Lessons Learnt
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 15
Classification of goods: Excludability and rivalry
Classification matrixRivalry?
yes no
Excludability?yes Private good Club good
no Quasi-public good Public good
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 16
Private vs. collective goods: Aggregating individual demand
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 17
Non-excludability: The free-rider problem
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 18
Managing collective goods: Quantities, prices, and willingness to pay
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 19
Providing public goods: Cost-benefit analysis
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 20
The Tragedy of the Commons
KOOTHS | BiTS: Economic Policy and Market Regulation (winter term 2013/2014), Part 3 21
Common resources and property rights