Urban Environmental Economics - Externalities

3 important questions on Urban Environmental Economics - Externalities

What are aspects of externalities?

- when others are affected
- without compensation via market
- often space related

What is 'pigovian tax'?

A tax on any market activity that generates negative externalities (polluter pays)

What is 'coasion bargaining'?

Externalities will be internalized by an efficient bargaining process. Then the efficient level of pollution will be implemented, regardless of initial rights endowments

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