Lesson3_Government

Eriksen 1 real estate fundamentals texas tech

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Unformatted text preview: etter Dr. Eriksen 1 Real Estate Fundamentals Texas Tech University Lesson 3: Governmental Controls ARGUMENTS FOR INTERVENTION 4 Natural Monopoly When Most “Efficient” Supplier is a Monopolist First Entrant Often Has Large Economies of Scale Government Provides (or Regulates) Allocation • • Examples of Water, Electricity, and Education Lubbock Power and Light Presence of Asymmetric Information One Party of Transaction Has Superior Information May Be Too Costly To Obtain Correct Info Examples of Adverse Selection and Moral Hazard ARGUMENTS FOR INTERVENTION 5 Negative Externalities Private Costs do not equal Social Costs Examples: Pollution, Congestion, Urban Sprawl Do foreclosures cause more f...
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This document was uploaded on 03/13/2014 for the course FIN 3332 at Texas Tech.

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