Correcting market and government failures: generic policies
5 important questions on Correcting market and government failures: generic policies
Other values besides efficiency may lead us to rejects the market solution as a final policy choice. Nevertheless, letting markets work should be among the policies we consider if market failure does not appear inherent in the policy problem. We distinguish three general approaches for taking advantage of private exchange (or market-like exchange between private citizens and governments):
- Freeing markets
- Facilitating markets
- Simulating markets
Examples of framework rules are:
- Tort law: tort systems allow those who have suffered damages to seek compensation through the courts. The possibility of torts lowers the expected loss that consumers facd from collateral damage and deters some risky behavior by producers I situations involving information asymmetry.
- Contract law can also be formulated to reduce the consequences of information asymmetry.
- Antitrust law: can be desired to employ either criminal or civil procedures, seeks to prevent firms from realizing rents through collusive efforts to restrict competition.
Price regulation is frequently used as a method of preventing monopolies from charging rent-maximizing prices. Many regulatory regimes attempt to force natural monopolies to price at average cost by regulating prices. Historically, the usual approach has been rate-to-return regulation. There have been two major lines of criticism to the use of this type of price regulation to limit undersupply by natural monopolies:
- The regulators are quickly "captured" by the firms that they are supposed to be regulating, such that the outcome may be worse than no regulation at all.
- Such regulation induces inefficient and wasteful behavior. Two well-documented outcomes of such incentives are X-inefficiency and an overuse of capital under rate-of-return regulation.
- Higher grades + faster learning
- Never study anything twice
- 100% sure, 100% understanding
For my 1st exam I got a C. Then, I started looking for ways to learn better and I came across Study Smart. Since then I have scored a A+, A, A- and another A. I highly recommend it to everyone who wants to hear it. I am so happy with it!!
I was struggling to finish all my first-year subjects for 3 years. Then I discovered Study Smart, which helped me to finish all of them within 3 months.
Because of StudySmart, things are going well in many ways. Before, I always had study stress and no time for anything. Now I feel calm and confident (because of the program). I used to score a B, now I usually score an A or A+.
Hey Chris, I really want to thank you very much for developing the platform, I usually got around C for my exams, now I scored an A+, an A and a A- !!
Since using Study Smart, my average has increased significantly. I even completed a statistics course with a A+ while I'm bad at statistics. I took on extra courses this year, because of Study Smart. Thanks so much!
Ever since I started studying with StudySmart I passed all my exams !!! No more re-sits!! At first, I was happy with a pass and now I only get good grades. Many thanks!
I aced all the courses I studied with Study Smart. For law, I first scored a D, and now an A! I’m 100% sure that I’ll pass all the courses I study with Study Smart.
I always thought I studied well. My grades were fine. I could never have imagined that applying these study skills would have such a huge and direct impact on my grades, my speed and the pleasure I have in learning.
For the first time, I finally feel totally confident about the way I learn. I have the perfect overview and make great progress in terms of speed and the grades I get. Thanks, Chris!
I immediately started to enjoy learning again, and my grades soared. All of a sudden, everything went better. I highly recommend Study Smart to all students..
Being able to create my materials online made the process of studying so much smoother and quicker. I no longer have to spend a huge amount of my time on creating my summaries.
At first, my notes were a mess. Now I use Study Smart to take my notes in a perfectly structured way. It helps me to save a lot of time and do other things I enjoy.
Students that study with Study Smart get better grades. The system applies all the learning methods in such a way that both well-performing students and students who struggle perform much better.
Hi Chris, I would like to thank you very much. Last year I scored C on a course, and this year I got an A+ thanks to your method! Thank you very much!
The largest effect is that my child is more enthusiastic about school! Every parent wants their children to be happy at school, Study Smart made it happen.
In high school, I failed several exams, and that has really changed now. I actually needed this tool very much back then. Since I started studying with StudySmart, I haven't had any D's. My average score is now an A and those are results I would have never had in the past
With my old method, I passed only 3 out of 8 courses. Since I started taking my notes digitally in Study Smart, I have passed all my courses on the first try. For me, StudySmart takes away the stress of wondering if I will pass or not.
Thanks to StudySmart, I passed all my exams, and with better grades than before! On top of that, I have mastered a very good study method now, which I am confident will help me earn my degree.
Single-purpose government entities, called special districts, are usually created to supply goods that are believed to have natural monopoly, public goods, or externality characteristics. A major disadvantage is the costs that consumers face in monitoring a whole series of "mini-governments" for different services. Three advantages are:
- They allow consumers to clearly observe the relationship between service provision and tax price.
- They can be designed to internalize externalities that spill across the historically evolved boundaries of local governments.
- Collections of special districts prevent logrolling across issue areas.
Because private firms could make an expected profit by buying low during normal markets and selling high during disruptions, we might ask why the government should stockpile. Two reasons:
- Government failure: based on past experience, firms might anticipate the possibility that the government will institute price controls, preventing them from realizing speculative profits.
- Market failure: acquisition and drawdown decisions by private firms have external effects on the economy.
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
