Search results
Results from the WOW.Com Content Network
A negative externality (also called "external cost" or "external diseconomy") is an economic activity that imposes a negative effect on an unrelated third party, not captured by the market price. It can arise either during the production or the consumption of a good or service.
In law and economics, the Coase theorem (/ ˈ k oʊ s /) describes the economic efficiency of an economic allocation or outcome in the presence of externalities.The theorem is significant because, if true, the conclusion is that it is possible for private individuals to make choices that can solve the problem of market externalities.
Different economists have different views about what events are the sources of market failure. Mainstream economic analysis widely accepts that a market failure (relative to Pareto efficiency) can occur for three main reasons: if the market is "monopolised" or a small group of businesses hold significant market power, if production of the good or service results in an externality (external ...
Along with an earlier article, “The Nature of the Firm”, "The Problem of Social Cost" was cited by the Nobel committee when Coase was awarded the Nobel Memorial Prize in Economic Sciences in 1991. The article is foundational to the field of law and economics, and has become the most frequently cited work in all of legal scholarship. [1]
A pecuniary externality occurs when the actions of an economic agent cause an increase or decrease in market prices. For example, an influx of city-dwellers buying second homes in a rural area can drive up house prices, making it difficult for young people in the area to buy a house.
From an economic aspect, congestion is a negative externality, for drivers can affect other drivers' costs of travel, such as costs of time, miles, or gasoline. [ 28 ] Therefore, in 1920 A. C. Pigou published the first edition of The Economics of Welfare and tried to solve the congestion problem.
The concept of spillover in economics could be replaced by terminations of technology spillover, R&D spillover and/or knowledge spillover when the concept is specific to technology management and innovation economics. [2] Moreover, positive or negative impact often creates a social crisis or a shock in the market like booms or crashes. [1]
An externality is defined as a cost or benefit incurred by a third party as a result of production or consumption of a good or services. ... Economics of development ...