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Externality
In economics, an externality is an Indirect costs, indirect cost (external cost) or indirect benefit (external benefit) to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced components that are involved in either consumer or producer consumption. Air pollution from motor vehicles is one example. The Air pollution#Health effects, cost of air pollution to society is not paid by either the producers or users of motorized transport. Water pollution from mills and factories are another example. All (water) consumers are made worse off by pollution but are not compensated by the market for this damage. The concept of externality was first developed by Alfred Marshall in the 1890s and achieved broader attention in the works of economist Arthur Cecil Pigou, Arthur Pigou in the 1920s. The prototypical example of a negative externality is environmental pollution. Pigou argued that a tax, equal to the m ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Pigovian Tax
A Pigouvian tax (also spelled Pigovian tax) is a tax on any market activity that generates negative externalities (i.e., external costs incurred by third parties that are not included in the market price). It is a method that tries to internalize negative externalities to achieve the Nash equilibrium and optimal Pareto efficiency. The tax is normally set by the government to correct an undesirable or inefficient market outcome (a market failure) and does so by being set equal to the external marginal cost of the negative externalities. In the presence of negative externalities, social cost includes private cost and external cost caused by negative externalities. This means the social cost of a market activity is not covered by the private cost of the activity. In such a case, the market outcome is not efficient and may lead to over-consumption of the product. Often-cited examples of negative externalities are environmental pollution and increased public healthcare costs assoc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Failure
In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value.Paul Krugman and Robin Wells Krugman, Robin Wells (2006). ''Economics'', New York, Worth Publishers. The first known use of the term by economists was in 1958,Francis M. Bator (1958). "The Anatomy of Market Failure," ''Quarterly Journal of Economics'', 72(3) pp351–379(press +). but the concept has been traced back to the Victorian writers John Stuart Mill and Henry Sidgwick.Steven G. Medema (2007). "The Hesitant Hand: Mill, Sidgwick, and the Evolution of the Theory of Market Failure," ''History of Political Economy'', 39(3)pp. 331��358. 200Online Working Paper. Market failures are often associated with public goods, time-inconsistent preferences, Information asymmetry, information asymmetries, Market structure, failures of competition, principal–agent problems, externalities,Jean-Jacques L ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Arthur Cecil Pigou
Arthur Cecil Pigou (; 18 November 1877 – 7 March 1959) was an English economist. As a teacher and builder of the School of Economics at the University of Cambridge, he trained and influenced many Cambridge economists who went on to take chairs of economics around the world. His work covered various fields of economics, particularly welfare economics, but also included business cycle theory, unemployment, public finance, Index (economics), index numbers, and measurement of national output.Nahid Aslanbeigui, 2008. "Pigou, Arthur Cecil (1877–1959)," ''The New Palgrave Dictionary of Economics'', 2nd edAbstract./ref> His reputation was affected adversely by influential economic writers who used his work as the basis on which to define their own opposing views. He reluctantly served on several public committees, including the Walter Cunliffe, 1st Baron Cunliffe, Cunliffe Committee and the 1919 Royal Commission on income tax. Early life and education Pigou was born at Ryde on the I ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Ronald Coase
Ronald Harry Coase (; 29 December 1910 – 2 September 2013) was a British economist and author. Coase was educated at the London School of Economics, where he was a member of the faculty until 1951. He was the Clifton R. Musser Professor of Economics at the University of Chicago Law School, where he arrived in 1964 and remained for the rest of his life. He received the Nobel Memorial Prize in Economic Sciences in 1991. Coase believed economists should study real-world wealth creation, in the manner of Adam Smith, stating, "It is suicidal for the field to slide into a hard science of choice, ignoring the influences of society, history, culture, and politics on the working of the economy." He believed economic study should reduce emphasis on Price Theory or theoretical markets and instead focus on real markets. He established the case for the corporation as a means to pay the costs of operating a marketplace. Coase is best known for two articles: "The Nature of the Firm" (1937), ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Pareto Efficiency
In welfare economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way". A change is called a Pareto improvement if it leaves at least one person in society better off without leaving anyone else worse off than they were before. A situation is called Pareto efficient or Pareto optimal if all possible Pareto improvements have already been made; in other words, there are no longer any ways left to make one person better off without making some other person worse-off. In social choice theory, the same concept is sometimes called the unanimity principle, which says that if ''everyone'' in a society (strict inequality, non-strictly) prefers A to B, society as a whole also non-strictly prefers A to B. The Pareto frontier, Pareto front consists of all Pareto-efficient situations. In addition to the context of efficiency in ''allocation'', the concept of Pareto efficiency also arises in the context of productive efficiency, ''efficiency in prod ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Alfred Marshall
Alfred Marshall (26 July 1842 – 13 July 1924) was an English economist and one of the most influential economists of his time. His book ''Principles of Economics (Marshall), Principles of Economics'' (1890) was the dominant economic textbook in England for many years, and brought the ideas of supply and demand, marginal utility, and costs of production into a coherent whole, popularizing the modern Neoclassical economics, neoclassical approach which dominates microeconomics to this day. As a result, he is known as the father of scientific economics. Life and career Marshall was born at Bermondsey in London, the second son of William Marshall (1812–1901), a clerk and cashier at the Bank of England, and Rebecca (1817–1878), daughter of butcher Thomas Oliver, from whom, on her mother's death, she inherited property. Marshall had two brothers and two sisters; a cousin was the economist Ralph George Hawtrey, Ralph Hawtrey. The Marshalls were a West Country clergy, clerical f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Harold Hotelling
Harold Hotelling (; September 29, 1895 – December 26, 1973) was an American mathematical statistician and an influential economic theorist, known for Hotelling's law, Hotelling's lemma, and Hotelling's rule in economics, as well as Hotelling's T-squared distribution in statistics. He also developed and named the principal component analysis method widely used in finance, statistics and computer science. He was associate professor of mathematics at Stanford University from 1927 until 1931, a member of the faculty of Columbia University from 1931 until 1946, and a professor of Mathematical Statistics at the University of North Carolina at Chapel Hill from 1946 until his death. A street in Chapel Hill bears his name. In 1972, he received the North Carolina Award for contributions to science. Statistics Hotelling is known to statisticians because of Hotelling's T-squared distribution which is a generalization of the Student's t-distribution in multivariate setting, and i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Laissez-faire
''Laissez-faire'' ( , from , ) is a type of economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies or regulations). As a system of thought, ''laissez-faire'' rests on the following axioms: "the individual is the basic unit in society, i.e., the standard of measurement in social calculus; the individual has a natural right to freedom; and the physical order of nature is a harmonious and self-regulating system." The original phrase was ''laissez faire, laissez passer'', with the second part meaning "let (things) pass". It is generally attributed to Vincent de Gournay. Another basic principle of ''laissez-faire'' holds that markets should naturally be competitive, a rule that the early advocates of ''laissez-faire'' always emphasized. The Physiocrats were early advocates of ''laissez-faire'' and advocated for an ''impôt unique'', a tax on land rent to replace the "monstrous and crippling net ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Free Rider Problem
In economics, the free-rider problem is a type of market failure that occurs when those who benefit from resources, public goods and common pool resources do not pay for them or under-pay. Free riders may overuse common pool resources by not paying for them, neither directly through fees or tolls, nor indirectly through taxes. Consequently, the common pool resource may be under-produced, overused, or degraded. Additionally, despite evidence that people tend to be cooperative by nature (a prosocial behaviour), the presence of free-riders has been shown to cause cooperation to deteriorate, perpetuating the free-rider problem. In social science, the free-rider problem is the question of how to limit free riding and its negative effects in these situations, such as the free-rider problem of when property rights are not clearly defined and imposed. The free-rider problem is common with public goods which are non-excludable and non-rivalrous. The non-excludability and non-rivalry o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Graph Of Positive Externality In Production
Graph may refer to: Mathematics *Graph (discrete mathematics), a structure made of vertices and edges **Graph theory, the study of such graphs and their properties * Graph (topology), a topological space resembling a graph in the sense of discrete mathematics *Graph of a function * Graph of a relation * Graph paper *Chart, a means of representing data (also called a graph) Computing *Graph (abstract data type), an abstract data type representing relations or connections * graph (Unix), Unix command-line utility * Conceptual graph, a model for knowledge representation and reasoning *Microsoft Graph, a Microsoft API developer platform that connects multiple services and devices Other uses * HMS ''Graph'', a submarine of the UK Royal Navy See also * Complex network *Graf *Graff (other) *Graph database *Grapheme, in linguistics *Graphemics *Graphic (other) *-graphy (suffix from the Greek for "describe," "write" or "draw") * List of information graphics software *S ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
