微观经济管理学与财务知识分析规范

GovernmentPolicyandMarketFailures,Chapter15,LaugherCurve,Q.Howmanyeconomistsdoesittaketoscrewinalightbulb?A.Eight.Onetoscrewitinandseventoholdeverythingelseconstant.,Introduction,Shouldthegovernmentinterveneinthemarket?Theframeworkpresentedmightbecalledtheinvisiblehandframework.Invisiblehandframeworkperfectlycompetitiveleadindividualstomakevoluntarychoicesthatareinsocietysinterest.,MarketFailures,Amarketfailureoccurswhentheinvisiblehandpushesinsuchawaythatindividualdecisionsdonotleadtosociallydesirableoutcomes.,MarketFailures,Anytimeamarketfailureexists,thereisareasonforpossiblegovernmentinterventionintomarketstoimprovetheoutcome.,MarketFailures,Becausethepoliticsofimplementingthesolutionoftenleadstofurtherproblems,governmentinterventionmaynotnecessarilyimprovethesituation.,Externalities,Externalitiesaretheeffectofadecisiononathirdpartythatisnottakenintoaccountbythedecision-maker.Externalitiescanbebothpositiveandnegative.,Externalities,Negativeexternalitiesoccurwhentheeffectofadecisiononothersthatisnottakenintoaccountbythedecision-makerisdetrimentaltothethirdparty.,Examplesincludesecond-handsmoke,waterpollution,andcongestion.,Externalities,Positiveexternalitiesoccurwhentheeffectofadecisiononothersthatisnottakenintoaccountbythedecision-makerisbeneficialtoothers.,Examplesincludeinnovation,education,andnewbusinessformation.,NegativeExternalities,Whennegativeexternalitiesensuethirdpartiesarehurt.Marginalsocialcostisgreaterthanmarginalprivatecost.,NegativeExternalities,Marginalsocialcostincludesallthemarginalcostsbornebysociety.,NegativeExternalities,Marginalsocialcostiscalculatedbyaddingthenegativeexternalitiesassociatedwithproductiontothemarginalprivatecostsofthatproduction.,TheEffectofaNegativeExternality,PositiveExternalities,Privatetradescanbenefitthirdpartiesnotinvolvedinthetrade.Marginalsocialbenefitequalsthemarginalprivatebenefitofconsumingagoodorserviceplusthepositiveexternalitiesresultingfromconsumingthatgoodorservice.,APositiveExternality,AlternativeMethodsofDealingwithExternalities,Externalitiescanbedealtwithviadirectregulation,incentivepolicies,andvoluntarysolutions.,DirectRegulation,Aprogramofdirectregulationiswheretheamountofagoodpeopleareallowedtouseisdirectlylimitedbythegovernment.,DirectRegulation,Economistsdonotlikethissolutionsinceitdoesnotachievethedesiredendasefficiently(atthelowestcostpossibleintotalresourceswithoutconsiderationastowhopaysthosecosts)andfairlyaspossible.,DirectRegulation,Directregulationisinefficientbecauseitachievesagoalinamorecostlymannerthannecessary.,IncentivePolicies,Incentiveprogramsaremoreefficientthandirectregulatorypolicies.Thetwotypesofincentivepoliciesareeithertaxesormarketincentives.,TaxIncentivePolicies,Ataxincentiveprogramusesataxtocreateincentivesforindividualstostructuretheiractivitiesinawaythatisconsistentwiththedesiredends.Oftenthetaxyieldsthedesiredendmoreefficientlythanstraightregulation.,TaxIncentivePolicies,Thissolutionembodiesameasureoffairnessaboutitthepersonwhoconservesthemostpaystheleasttax.,TaxIncentivePolicies,Anotherwaytohandleanegativeexternalityisthroughapollutiontaxoreffluentfees.,Effluentfeeschargesimposedbygovernmentonthelevelofpollutioncreated.,RegulationThroughTaxation,MarketIncentivePolicies,Analternativetodirectregulationissometypeofmarketincentiveprogram.Marketincentiveprogramaplanrequiringmarketparticipantstocertifytotalconsumptiontheirownorothershasbeenreducedbyaspecifiedamount.,MarketIncentivePolicies,Amarketincentiveprogramissimilartotheregulatorysolutioninthattheamountofthegoodusedisreduced.,MarketIncentivePolicies,Amarketincentiveprogramdiffersfromaregulatorysolutioninthatindividualswhoreduceconsumptionbymorethantherequiredamountaregivenamarketablecertificatethatcanbesoldtosomeoneelse.,VoluntaryReductions,Voluntaryreductionsleaveindividualsfreetochoosewhethertofollowwhatissociallyoptimalorwhatisprivatelyoptimal.Economistsaredubiousofvoluntarysolutions.,VoluntaryReductions,Apersonssocialconscienceandwillingnesstodothingsforthegoodofsocietygenerallydependonhisorherbeliefthatotherswillalsobehelping.,VoluntaryReductions,Ifasociallyconsciouspersoncomestobelievealargenumberofotherpeoplewillnotcontribute,heorshewilloftenlosetheirsocialconscience.,Thisisanotherexampleofafreeriderproblemindividualsunwillingnesstoshareinthecostofapublicgood.,TheOptimalPolicy,Anoptimalpolicyisoneinwhichthemarginalcostofundertakingthepolicyequalsthemarginalbenefitofthatpolicy.,TheOptimalPolicy,Shouldpollutionbetotallyeliminated?,Someenvironmentalistssay“yes.”Economistswouldanswerthatdoingsoiscostlysomarginalcostsshouldbebalancedagainstmarginalbenefits.,TheOptimalPolicy,ThepointwhereMC=MRiscalledtheoptimallevelofpollution.,Optimallevelofpollutiontheamountofpollutionatwhichthemarginalbenefitofreducingpollutionequalsthemarginalcost.,PublicGoods,Apublicgoodisonethatisnonexclusive(noonecanbeexcludedfromitsbenefits)andnonrival(consumptionbyonedoesnotprecludeconsumptionbyothers.,PublicGoods,Therearenopureexamplesofapublicgood.,Theclosestexampleisnationaldefense.Technologycanchangethepublicnatureofgoods.Roadsareanexample.,PublicGoods,Onceapurepublicgoodissuppliedtooneindividual,itissimultaneouslysuppliedtoall.,Aprivategoodisonlysuppliedtotheindividualwhoboughtit.,PublicGoods,Withpublicgoods,thefocusisongroups.,Withprivategoods,thefocusisontheindividual.,PublicGoods,Inthecaseofapublicgood,thesocialbenefitofapublicgoodisthesumoftheindividualbenefits.,PublicGoods,Addingdemandcurvesverticallyiseasytodointextbooks,butnotinpractice.,Thisisbecauseindividualsdonotbuypublicgoodsdirectlysothattheirdemandisnotrevealedintheiractions.,TheMarketValueofaPublicGood,InformationalProblems,Perfectlycompetitivemarketsassumeperfectinformation.Real-worldmarketsofteninvolvedeception,cheating,andinaccurateinformation.,InformationalProblems,Whenthereisalackofinformation,buyersandsellersdonothaveequalinformation,marketsmaynotworkproperly.,InformationalProblems,Economistscallsuchmarketfailuresadverseselectionproblems.,Adverseselectionproblemsproblemsthatoccurwhenabuyerorasellerhavedifferentamountsofinformationaboutthegoodforsale.,PoliciestoDealwithInformationalProblems,Onepolicyalternativetodealwithinformationmarketfailuresistoregulatethemarketandseethatindividualsprovidethecorrectinformation.,PoliciestoDealwithInformationalProblems,Anotheralternativeisforthegovernmenttolicenseindividualsinthemarketandrequirethemtoprovidefullinformationaboutthegoodbeingsold.,PoliciestoDealwithInformationalProblems,Regulatorysolutionsmaybeoverlysloworcostly.,AMarketinInformation,Amarketininformationisonesolutiontotheinformationproblem.Informationisvaluable,andisaneconomicproductinitsownright.,AMarketinInformation,Leftontheirown,marketswilldeveloptoprovideinformationthatpeopleneedandarewillingtopayforit.,AMarketinInformation,Economistswhodonotlikegovernmentinterferencepointoutthatinformationalproblemsarenotaproblemofthemarket;itisaproblemofgovernmentregulation.,LicensingofDoctors,Licensingofdoctorsisadebatethatismotivatedbyinformationproblems.Currentlyalldoctorspracticingmedicinearerequiredtobelicensedthiswasnotalwaysso.Licensingofdoctorsisjustifiedbyinformationalproblems.,LicensingofDoctors,Someeconomistsarguethatlicensingisasmuchaproblemofrestrictingsupplyasitistohelptheconsumer.,LicensingofDoctors,Why,iflicensedmedicaltrainingissogreat,doweevenneedformalrestrictionstokeepothertypesofmedicinefrombeingpracticed?,LicensingofDoctors,Whomdotheserestrictionsbenefit:thegeneralpublicorthedoctorswhopracticemainstreammedicine?,Whathavethelong-termeffectsoflicensurebeen?,AnInformationalAlternativetoLicensure,Asanalternative,thegovernmentcouldprovidethepublicwithinformationaboutwhichtreatmentsworkandwhichdonot.Thiswouldgiverisetoconsumersovereigntytherightoftheindividualtomakechoicesaboutwhatisconsumedandproduced.,AnInformationalAlternativetoLicensure,Inthisscenario,thegovernmentwouldprovidesuchinformationas:,Gradesincollege.Gradesinmedicalschool.Successrateforvariousprocedures.References.Medicalphilosophy.Chargesandfees.,AnInformationalAlternativetoLicensure,Thisinformationalternativewouldprovidemuchmoreusefulinformationtothepublicthanthepresentlicensingprocedure.,AnInformationalAlternativetoLicensure,Herearesomewordsofcautionabouttheinformationalalternative.,Togetatruepictureofwhetherth