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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.
- Fall '08