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Lec8 Coase _ Poll Pol_posted

Lec8 Coase _ Poll Pol_posted - Work(or when might it not...

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Efficient Polluting: How to Efficient Polluting: How to Get It, Continued Get It, Continued
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Administrative Stuff Administrative Stuff Read Article for discussion section Next week’s section: HW-like problems Next homework due Mon. 2/4 Midterm Friday 2/8
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Last Time Last Time Coase
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Today Today Is Coase enough? Alternatives, part 1
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Coase Coase Smokestack pollutes laundry Assign rights Efficiency can happen Pollution $/Pollution MB, Smokestack MC, Laundry Pollution*
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Coase and Liability Law Coase and Liability Law Damager is liable for the damages caused It undertakes precaution to avoid paying damages It pays for remaining damages Damaging Activity $/Damaging Activity MB, Damaging Activity MC, Damaging Activity Abate Pay Damages
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Coase: Are We Done? Coase: Are We Done? When does it work? When doesn’t it work?
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Conditions for Coase Theorem to Conditions for Coase Theorem to
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Unformatted text preview: Work (or, when might it not work?) Work (or, when might it not work?) Violations: Important? Violations: Important? • Perfect information • Price taking • Costless enforcement • Agents behave efficiently • No income/wealth effects • No transactions costs • Ability to define rights Coase: A Market Solution to a Coase: A Market Solution to a Nonmarket Problem? Nonmarket Problem? • Advantages • Disadvantages Government Intervention Government Intervention • Tax vs. Standard: The One-Source Case $/Pollution Pollution MB of Polluting MC of Polluting Pollution* t* Tax vs. Standard: The Multiple-Tax vs. Standard: The Multiple-Source Case Source Case Pollution $/Pollution MB, Pleasure Car MB, Ambulance MB, Total MC, Total Pollution* Poll*/2 t* Poll pc Poll A...
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