7 - It is often claimed that, when I have a child, I impose...

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It is often claimed that, when I have a child, I impose net costs on others, so that leaving people free to decide how many children they have will result in overpopulation. o A. But it is not clear what the sign of the net externalities from my having another child is. Positive externalities include: 1. My child may find the cure for cancer and 2. Will reduce the amount of the national debt your child must bear 3. And the amount your child must pay for national defense, or scientific research, or any other government service whose costs is roughly independent of the population. o B. This argument is one example of an error common in political discussions in many areas. You calculate net externalities considering only the externalities of one sign (negative if you want to ban something, positive if you want to subsidize it) and ignoring those of the other sign. o C. How in principle do we define the optimal level of population? 1. If we measure it by per capita income, utility, or something similar, we commit a fallacy of composition. a. Consider one additional person, who will impose neither net costs nor benefits on the rest of us. How can we say that his life (utility 10) is a good thing if the rest of us have an average utility of 9, but the same life is a bad thing of the rest of us have an average utility of 11? b. Mead's example: Consider a world with two communities, A and B. Both are attractive places filled with happy people, but A is a little happier than B. Is the world a better place if B is wiped out by a plague? Average happiness goes up. 2. If we measure it by total utility, we need to define a zero point, so as to know if an individual contributes positive or negative utility to the total. a. The obvious zero point is death, but . .. b. That leads to a rule very favorable to large populations. c. Two unhappy people are better than one happy one unless they would be willing to flip a coin: heads they get to be the happy one, tails they die. They will have to be pretty unhappy to agree to that. VII. Regulation of Sex. Why do we do it? Adultery laws, fornication laws, . .. o A. Contract enforcement? Like copyright--it makes it easier to enforce the contract against infringement involving partners not party to it. o B. Overenforce to protect third parties? 1. Children--who may be injured if adultery leads to marital breakup 2. Keep down VD, AIDS 3. Law against prostitution can be viewed as a way in which wives enforce the marraige contract by making it harder for husbands to break it.
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I. Tort Law: o A. What it is: a private action for a wrong, typically for damages, although injunctions are also possible. o
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This note was uploaded on 04/05/2012 for the course ECON 395 taught by Professor Beckett during the Fall '11 term at Rutgers.

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7 - It is often claimed that, when I have a child, I impose...

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