Chapter Thirty-Three Externalities 外部效应
Chapter Thirty-Three Externalities 外部效应
Structure Definition Consumption externality Production externality The tragedy of commons
Structure Definition Consumption externality Production externality The tragedy of commons
Externalities An externality is a cost or a benefit imposed upon someone by actions taken by others. The cost or benefit is thus generated externally to that somebody. An externally imposed benefit is a positive externality. An externally imposed cost is a negative externality
Externalities An externality is a cost or a benefit imposed upon someone by actions taken by others. The cost or benefit is thus generated externally to that somebody. An externally imposed benefit is a positive externality. An externally imposed cost is a negative externality
Examples of Negative externalities Air pollution. Water pollution Loud parties next door. Traffic congestion Second-hand cigarette smoke
Examples of Negative Externalities Air pollution. Water pollution. Loud parties next door. Traffic congestion. Second-hand cigarette smoke
Examples of positive externalities A well-maintained property next door that raises the market value of your property a pleasant cologne or scent worn by the person seated next to you Improved driving habits that reduce accident risks Education
Examples of Positive Externalities A well-maintained property next door that raises the market value of your property. A pleasant cologne or scent worn by the person seated next to you. Improved driving habits that reduce accident risks. Education
Externalities and Efficiency Crucially, an externality impacts a third party; i.e. somebody who is not a participant in the activity that produces the external cost or benefit
Externalities and Efficiency Crucially, an externality impacts a third party; i.e. somebody who is not a participant in the activity that produces the external cost or benefit
Externalities and Efficiency Externalities cause Pareto inefficiency; typically too much scarce resource is allocated to an activity which causes a negative externality too little resource is allocated to an activity which causes a positive externality
Externalities and Efficiency Externalities cause Pareto inefficiency; typically – too much scarce resource is allocated to an activity which causes a negative externality – too little resource is allocated to an activity which causes a positive externality
Externalities and Property rights An externality is viewed as a purely public commodity a commodity is purely public if it is consumed by everyone (nonexcludability), and everybody consumes the entire amount of the commodity (nonrivalry in consumption) E.g. a broadcast television program
Externalities and Property Rights An externality is viewed as a purely public commodity. A commodity is purely public if – it is consumed by everyone (nonexcludability), and – everybody consumes the entire amount of the commodity (nonrivalry in consumption). E.g. a broadcast television program
Consumption Externality Pareto efficient amount of smoke Inefficient equilibrium with negative externality Property rights and price mechanism Quasi-linear utility and the Coase theorem(科斯定理)
Consumption Externality Pareto efficient amount of smoke Inefficient equilibrium with negative externality Property rights and price mechanism Quasi-linear utility and the Coase theorem (科斯定理)
Consumption Externality Consider two agents a and b, and two commodities, money and smoke Both smoke and money are goods for Agent A Money is a good and smoke is a bad for Agent B Smoke is a purely public commodity
Consider two agents, A and B, and two commodities, money and smoke. Both smoke and money are goods for Agent A. Money is a good and smoke is a bad for Agent B. Smoke is a purely public commodity. Consumption Externality