Knowledge Problems and the Problem of Social Cost

1992 ◽  
Vol 14 (2) ◽  
pp. 209-224 ◽  
Author(s):  
Roy E. Cordato
Keyword(s):  
Property Rights ◽  
Environmental Economics ◽  
Social Cost ◽  
Tort Law ◽  
Welfare Economics ◽  
Central Issue ◽  
Negative Externalities ◽  
Liability Rules

Ronald Coase's 1960 article, “The Problem of Social Cost,” has been one of the most influential works in the development of welfare economics since A. C. Pigou's The Economics of Welfare. Principally, the article made the definition and distribution of property rights a central issue when discussing the efficiency problems of negative externalities. Coase's approach has given rise to most of the economics of tort law and alternative liability rules. It has also led to the development of the “property rights” approach to environmental economics that has found prominence as an alternative to traditional Pigovian analysis.

scholarly journals The Welfare Impact of Second-Best Uniform-Pigouvian Taxation: Evidence from Transportation

2018 ◽  
Vol 10 (4) ◽  
pp. 211-242 ◽  
Author(s):  
Christopher R. Knittel ◽  
Ryan Sandler
Keyword(s):  
Market Failure ◽  
Social Cost ◽  
Deadweight Loss ◽  
Negative Externalities ◽  
Market Outcomes ◽  
Welfare Impact ◽  
Second Best ◽  
Pigouvian Taxes ◽  
Gasoline Taxes ◽  
Optimal Taxes

When consumers or firms don’t face the true social cost of their actions, market outcomes are inefficient. In the case of negative externalities, Pigouvian taxes are one way to correct this market failure, but it may be infeasible to tax the externality directly. The alternative, taxing a related product, will be second-best. In this paper, we show that in the presence of heterogeneous externalities and elasticities, this type of indirect tax performs poorly. In our empirical application, gasoline taxes to address pollution externalities, less than a third of the deadweight loss of the externality is addressed by second-best optimal taxes. (JEL D62, H21, H23, H71, H76, Q53, R48)

scholarly journals Book Review: Environmental and Natural Resource Economics: An Encyclopedia

2015 ◽  
Vol 55 (2) ◽  
pp. 179
Author(s):  
Aimée DeChambeau
Keyword(s):  
Environmental Economics ◽  
Natural Resource ◽  
Resource Economics ◽  
Welfare Economics ◽  
Natural Resource Economics ◽  
Historical Events ◽  
General Reference ◽  
Alphabetical Listing ◽  
Key Concepts

Environmental and Natural Resource Economics is a single volume, general reference encyclopedia that presents information on more than 140 topics relevant to understanding environmental and natural resource economics. Key concepts, historical events and movements, and biographies are included. Each entry is signed, provides see also references and brief lists of resources for further reading. The volume begins with an alphabetical listing of entries and a useful “Guide to Related Topics” that chunks related entries together under the categories of “General Topics,” “Environmental Economics,” “Resource Economics,” and “Applied Welfare Economics.”

Distribution of Risk of Harm in Delictual Responsibility From the Standpoint of Economic Analysis of Law

2020 ◽  
Vol 27 (2) ◽  
pp. 119-130
Author(s):  
Maryna Velykanova
Keyword(s):  
Property Rights ◽  
Economic Analysis ◽  
Risk Sharing ◽  
Basis Property ◽  
Cost Effective ◽  
Well Being ◽  
Tort Law ◽  
Tort Liability ◽  
Economic Analysis Of Law ◽  
Systematic Analysis

Damage to property and (or) non-property rights of persons occurs quite often. The right to compensation for such damage is indisputable. However, civil doctrine ambiguously addresses the issue of risk sharing in tort obligations. Therefore, the purpose of this paper is to discuss approaches to the distribution of risk of harm in delictual responsibility and to determine their effectiveness from an economic and legal standpoint. The paper, based on economic and systematic analysis using dialectical, comparative, logical-dogmatic and other methods, including economics, describes the approaches to determining the purpose of tort law and its ability to ensure effective distribution of risk of harm. It has been proven that tort law can have direct regulatory consequences by restraining behaviour and sharing risks. It is concluded that the task of tort law is the optimal distribution of risk of harm between the perpetrator and the victim and to ensure the implementation of risky activities only if its social value justifies the risk. Based on the economic analysis of tort law, it has been substantiated that the distribution of the risk of damage in tort liability is carried out through the institutions of insurance and liability. Insurance is cost-effective when it comes to compensation for damage. However, only liability, in addition to the function of compensation, can also perform the function of preliminary prevention of harm. Therefore, the risk of causing harm in tort liability is mainly borne by the person who caused the damage. In obligations to compensate for damage caused by a source of increased danger, a person who on the appropriate legal basis (property rights, other property rights, contracts, leases, etc.) owns a vehicle, mechanism, other object, the use, storage or maintenance of which creates an increased danger, bears such risk even in the absence of guilt in causing harm. The grounds for imposing such risk on the victim are his intention or force majeure. It is this approach to the distribution of harm risk in tort liability that is fair and cost-effective and contributes to public well-being

EZRA MISHAN, CONTRARIAN AND SAGE: AN APPRECIATION

2016 ◽  
Vol 61 (03) ◽  
pp. 1640012 ◽  
Author(s):  
PETER SINCLAIR
Keyword(s):  
Economic Growth ◽  
Economic Analysis ◽  
Environmental Economics ◽  
Welfare Economics ◽  
Central Figure ◽  
Milton Friedman ◽  
The World

For many of us, the world is far too complicated to allow economic analysis to furnish a clear answer on an issue of policy. Ezra Mishan disagreed. For him, as for his teacher and mentor, Milton Friedman, economics was a system of reasoning that cried out to be used for that purpose - and especially so if prevailing orthodoxy was in error. Mishan was the first economist to attack the then universally held view that economic growth must be beneficial. Fifty years later, as we mourn his recent death, he is an inspiring and central figure in environmental economics, and an example of what can be done with practical welfare economics.

FARM CONSOLIDATION AS AN EXAMPLE OF INTERNALIZING EXTERNALITIES IN AGRICULTURE

2020 ◽  
Vol XXII (4) ◽  
pp. 151-160
Author(s):  
Tomasz Pajewski
Keyword(s):  
Adverse Effects ◽  
Property Rights ◽  
Agricultural Production ◽  
Market Equilibrium ◽  
Profit Maximization ◽  
Social Costs ◽  
Negative Externalities ◽  
Swine Farm ◽  
External Effects ◽  
The Social

The paper deals with the issue of internalising external effects arising during agricultural production. An example was the account of an agritourism farm and a swine farm. Using the Edgeworth box concept, difficulties in establishing a market equilibrium without precisely established property rights are presented. The aim of the study was to indicate a possible solution to the problem of negative external effects. It was indicated that the internalization of unfavorable phenomena resulting from agricultural production may take place across farms. The rationality of such a solution was documented using the profit maximization functions of separate and post-merger farms. In a newly established entity, in order to maximize the benefits of pig production and the offered accommodation places, the factors increasing the emission of odor to the atmosphere should be limited to a socially acceptable level. The theoretical nature of the presented possibilities of limiting the adverse effects of agricultural production for society may take on real shape. The currently observed direction of changes in agriculture towards the creation of farms with an increasing area allows to suppose that a certain amount of negative externalities will be limited, and therefore the social costs of production will partially be reduced. It is difficult to indicate specific values, e.g. reduced social costs, but it is important that the direction of changes is socially desirable.

scholarly journals Strict Liability for Damage Caused by Self-Driving Vehicles: The Estonian Perspective

2019 ◽  
Vol 12 (2) ◽  
pp. 1-18
Author(s):  
Taivo Liivak ◽  
Janno Lahe
Keyword(s):  
Strict Liability ◽  
Tort Law ◽  
Third Parties ◽  
Member States ◽  
Liability Rules ◽  
Conventional Vehicle ◽  
Eu Member States ◽  
Fault Liability

Abstract In the case of damage caused by a conventionally driven vehicle, it is usually possible in EU Member States to subject the possessor/controller of the vehicle to heightened tortious no-fault liability, i.e. strict liability. The development and possible introduction of self-driving vehicles pose a challenge also for tort law, because it is unlikely that self-driving vehicles will not cause any damage to third parties. With the application of strict liability in mind, this article attempts to identify possible differences between damage caused by a conventional vehicle as opposed to that caused by a self-driving vehicle. In light of this developing technology the key legislative question to be answered is whether the introduction of self-driving vehicles calls for, among other things, the revision of strict liability rules. Answers to these questions are sought mainly based on Estonian tort law.

2. Some General Warnings for the Novice Tort Lawyer

2013 ◽  
Author(s):  
Simon Deakin ◽  
Angus Johnston ◽  
Basil Markesinis
Keyword(s):  
Decision Making ◽  
Human Rights ◽  
Real World ◽  
Tort Law ◽  
Ivory Tower ◽  
Human Rights Law ◽  
Liability Rules ◽  
The Real ◽  
The Relationship ◽  
Academic Interests

This chapter discusses issues that readers must bear in mind when encountering criticism of individual rules, decisions, and academic opinions in the remainder of the book. These are: how judicial mentality and outlook affects decision-making; academic interests and practitioners’ concerns; ivory tower neatness v. the untidiness of the real world; tort’s struggle to solve modern problems with old tools; need to reform tort law; whether liability rules are restricted because the damages rules have been left unreformed or because the relationship between liability and damages has been neglected; that tort law is, in practice, often inaccessible to the ordinary victim; and that human rights law is set to influence tort law, but this influence is likely to be gradual and indirect.

Property Rules, Liability Rules and Externalities

2006 ◽  
Vol 24 (2) ◽  
pp. 99-126
Author(s):  
Antonio Nicita ◽  
Matteo Rizzolli
Keyword(s):  
Property Rights ◽  
Transaction Costs ◽  
Property Right ◽  
Legal Systems ◽  
Liability Rule ◽  
Liability Rules ◽  
Ex Ante ◽  
Court Intervention ◽  
Property Rule

Abstract In this paper we argue that traditional explanations of the dichotomisation of property rules and liability rules are somehow misleading, since they tend to neglect the evolutionary complementarity between die two rules in a world of incomplete property rights characterised by sizeable ex-ante transaction costs in rights’ definition. When rights are a complete bundle of well-defined uses, the application of a property rule reaffirms and reinforces the correlation between rights and duties. In a world of incomplete rights, externalities over undefined uses call for a court intervention aimed at defining a new property right through either a property rule or a liability rule. Independently of whether new rights are created by property or liability rules, die nature and die extent of future externalities over conflicting undefined uses could generate new processes of rights’ definition. The emergence of an externality always implies an evolutionary complementarity between property rules and liability rules whose boundaries actually depend, in alternative legal systems, on die degree of incompleteness of original rights.

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