Homines libenter quod volunt credunt
Posted in Market Failures on Jan 17th, 2011
In a previous post, we examined whether it was even possible in principle to determine if a company was engaging in “socially harmful” predatory pricing. Today we’ll address whether there is even a theoretical possibility for making such a determination. And in another future post, we’ll return to the more fundamental question of whether price […]
Posted in Economic Illiteracy, Market Failures on Jan 13th, 2011
Does the existence of pollution indicate that an outcome is inefficient? No, the existence of pollution is a sign that it is costly to produce and consume something – but from that fact alone you can neither infer whether an outcome is efficient nor if a market has failed. (in other words, pollution is a […]
Posted in Market Failures on Jan 6th, 2011
GE, I believe, is the only company that was among the 10 largest in the country in both 1900 and again today. The canard that “private market forces lead to concentration of industry, declines of wages and gouging of consumers” is so tired that I worry that bringing it up here will reinvigorate what is […]
Posted in Corporatism, Market Failures, Regulation on Jan 5th, 2011
Regulation and anti-trust is rarely about consumer protection. I was thinking about the old anti-trust suit brought against Microsoft over a decade ago. The claim went something like this: Microsoft developed its own web browser (Internet Explorer) that it packaged for “free” with its windows operating system software. Most hardware devices contracted with Microsoft to […]
Posted in Economics Problems, Market Failures on Dec 13th, 2010
No, it’s not because of this (in case you don’t want to sort through it, we’re #7).Why was it dreadful? Because like most other colleges, all it really does is pay lip service to the idea that students will develop critical thinking skills. Amherst still tells its customers that this is what it does. Here […]
Posted in Education, Market Failures on Dec 1st, 2010
I am sympathetic to the argument that “we” do not produce higher education very well because of the increasing and high costs of attending and producing “higher education.” I am especially sympathetic because I see lots of what happens here. But this view of higher education is too narrow. If what “we” were selling to […]
Posted in Market Failures, You Can't Have it Both Ways on Nov 15th, 2010
Suppose policy makers had the right to intervene in the private marketplace and consider the following situation. The Groovy Gravy Company is considering whether it should “outsource” its customer support work from New York State to a foreign country. Such a move would save the company, on net, $100 million from the release of NYS […]
Posted in History, Market Failures on Nov 8th, 2010
Imagine the fantastic amount of coordination required to move the economy from an oil based one to whatever the next “energy source” is going to be! Suppose the new technology is hydrogen. Then we’d have to build networks of pipelines, filling stations, repair industries, oversight, education, etc. in order to build and service this incredible […]
Posted in Environment, Market Failures on Oct 26th, 2010
If market prices do not reflect the full social costs of a product, then “markets” will overproduce those goods. Consider the case of plastic shopping bags. It is argued that plastic bags take up too much landfill space, and that their production emits dangerous CO2 which will cause the planet to warm. In the retail […]
Posted in Market Failures on Oct 22nd, 2010
I am very sympathetic to ideas which promote more choice in government. In other words, can we get some version of the feedback and competitive mechanisms which work so well in markets to operate in government. Of course there are many. But I think those proposals suffer from a problem that government in general faces. […]