KillerApps Micro: Externality
The externality and time horizon of costs and benefits bedevil college distribution of condoms.
Resource conservation depends on who pays and the time horizon of costs vs benefits.
Free or subsidized parking has suffocated the development of mass transit and increased traffic congestion and air pollution.
External costs or benefits exist only if property rights have not been clearly defined and/or when the negotiation or enforcement cost exceeds damage.
Charging motorists for contributing to rush-hour congestion may be economists' dream of internalizing negative externality on toll roads but politicians' nightmare when competing highways are free.
Individual health insurers may be reluctant to aggressively offer smoking cessation treatment to their insured members because of high turnover of treated patients to other health insurers
Pollution credits convert the atmosphere from a commons into private property. They can reduce pollution if the pollution cap is lower than the unrestricted total and lower the costs of reducing pollution if credits can be sold from low-cost avoiders and high-cost avoiders.
Total 7 records
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