Designing Ecolabels In Order To Mitigate Market Failures

2005 ◽  
Vol 16 (4) ◽  
pp. 411-430 ◽  
Author(s):  
Douadia Bougherara ◽  
Gilles Grolleau
Keyword(s):  
Asymmetric Information ◽  
Qualitative Study ◽  
Public Goods ◽  
Market Failure ◽  
Jel Classification ◽  
Market Failures ◽  
Cognitive Support

For the market for ecofriendly characteristics of agrofood products to function effectively, means of mitigating asymmetric information, informational overload and public goods properties are necessary. Ecolabel success requires a design and an implementation capable of mitigating simultaneously these three sources of market failures. Our contribution differs from many to date by (1) introducing and analyzing the informational overload as a source of market failure and (2) considering the ecolabel, not only as a tool to re-establish information symmetry between the producer and consumer but also as a way to overcome informational overload and public goods problems. We analyze how these sources of market failures may be mitigated by providing information perceived as trustworthy, tying credence and public attributes to verifiable and private attributes and designing the ecolabel as a cognitive support for consumers. We provide an exploratory qualitative study of several French ecolabels to stress how they more or less succeed in attenuating the identified sources of market failures. Several implications for policymakers and managers are stressed. We conclude by suggesting several issues requiring further investigations. JEL Classification Numbers: D11, D21, L15

scholarly journals Una crítica a la teoría de los fallos del mercado desde la perspectiva de la Escuela Austriaca

2021 ◽  
pp. 133-159
Author(s):  
Ángel Martín Oro
Keyword(s):  
Public Goods ◽  
Imperfect Competition ◽  
Market Failure ◽  
Welfare Economics ◽  
Perfect Competition ◽  
Market Failures ◽  
Failure Theory ◽  
Palabras Clave ◽  
Competitive Model ◽  
Main Criticism

In this paper, we present a critical analysis of the standard market failure theory, one of the most important pillars of economic interventionism. This theory justifies state interference when markets do not produce so-called optimal outcomes; being based on two fundamental concepts of neoclassical welfare economics, namely, Pareto efficiency and perfect competition. The main criticism is directed at the theoretical framework in which is based on, through the contributions of the Austrian School of Economics. To accomplish that, after revising the basics of the market failure theory, we will put forward an alternative concept of efficiency, as well as questioning the suitability of the perfect competitive model. Next, we will reconsider theoretically the traditional market failures, that is, monopolies, public goods and externalities’ problems. This analysis is accompanied by historical cases that illustrate our criticism. Key words: Market failure, welfare economics, efficiency, imperfect competition, public goods, externalities. JEL codes: B53, D60, H00. Resumen: En este trabajo se realiza un análisis crítico de la teoría tradicional de los fallos del mercado, uno de los pilares más importantes del intervencionismo económico. Esta teoría vendría a justificar la interferencia estatal en los casos en que el mercado no produce resultados óptimos; estando apoyada en dos conceptos fundamentales en la economía del bienestar neoclásica: la eficiencia paretiana y el modelo de competencia perfecta. La principal crítica se realizará al marco teórico en el que se inserta, a partir de las aportaciones de la Escuela Austriaca de Economía. Para ello, tras describir a grandes rasgos la teoría de los fallos del mercado, expondremos un concepto alternativo de eficiencia, y nos cuestionaremos la validez teórica del modelo perfectamente competitivo. A continuación, reconsideraremos desde un punto de vista teórico los fallos del mercado tradicionales, esto es: monopolios, bienes públicos y externalidades. Este análisis se acompañará de casos históricos que ilustren y apoyen nuestra crítica. Palabras clave: Fallos del mercado, economía del bienestar, eficiencia, competencia imperfecta, bienes públicos, externalidades. Códigos JEL: B53, D60, H00.

scholarly journals Which Product Will Survive To Be Standard?: Technology Adoption And The Role Of Governments

2011 ◽  
Vol 4 (2) ◽  
Author(s):  
Akinori Tomohara
Keyword(s):  
Evolutionary Game Theory ◽  
Technology Diffusion ◽  
Market Failure ◽  
Network Externalities ◽  
Evolutionary Game ◽  
Jel Classification ◽  
Market Failures ◽  
Font Size ◽  
Recent Developments

<p class="MsoBodyText2" style="text-align: justify; line-height: normal; margin: 0in 0.6in 0pt 0.5in; tab-stops: .5in;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">While several surveys on technology diffusion have been undertaken, few attempts have been made to synthesize existing research to provide a framework for examining the role of governments.<span style="mso-spacerun: yes;">&nbsp; </span>Is government intervention really required to remedy market failures caused by network externalities?<span style="mso-spacerun: yes;">&nbsp; </span>This paper covers recent developments in this area, focusing on works in stochastic evolutionary game theory.<span style="mso-spacerun: yes;">&nbsp; </span>We relate the results of equilibrium selections to the role of governments. JEL classification: L1, L53 Keywords: Path Inefficiency; Market Failure; Network Externalities</span></span></p>

“Public Health, Public Goods, and Market Failure”

2019 ◽  
Vol 12 (3) ◽  
pp. 287-292 ◽  
Author(s):  
L Chad Horne
Keyword(s):  
Public Health ◽  
Public Goods ◽  
Market Failure ◽  
Public Health Ethics ◽  
Recent Criticism ◽  
Market Failures ◽  
The Public ◽  
Health Ethics ◽  
Health Related

Abstract This discussion revises and extends Jonny Anomaly's ‘public goods’ account of public health ethics in light of recent criticism from Richard Dees. Public goods are goods that are both non-rival and non-excludable. What is significant about such goods is that they are not always provided efficiently by the market. Indeed, the state can sometimes realize efficiency gains either by supplying such goods directly or by compelling private purchase. But public goods are not the only goods that the market may fail to provide efficiently. This point to a way of broadening the public goods account of public health to accommodate Dees' counterexamples, without abandoning its distinctive appeal. On the market failures approach to public health ethics, the role of public health is to correct public health-related market failures of all kinds, so far as possible. The underlying moral commitment is to economic efficiency in the sense of Pareto: if we can re-allocate resources in the economy so as to raise the welfare of some without lowering the welfare of any other, we ought to do so.

Option Demand Revisited

1987 ◽  
Vol 15 (4) ◽  
pp. 460-471
Author(s):  
Michael Krashinsky
Keyword(s):  
Public Goods ◽  
No Value ◽  
Market Failure ◽  
Free Rider ◽  
Market Failures ◽  
Important Phenomenon ◽  
Price Discriminate

Weisbrod argues that private commodities for which demand is infrequent and uncertain and for which disinvestment is irrevocable may involve a market failure that he calls option demand. He has identified an important phenomenon, but his analysis is somewhat flawed. If entrepreneurs can price discriminate perfectly, as Weisbrod assumes, there can be no value in options to purchase. Nonetheless, the goods he describes do involve market failures: inability to price discriminate and the free rider problems associated with public goods. Thus option demand remains a useful concept.

scholarly journals Negative externalities of government

2021 ◽  
pp. 215-238
Author(s):  
William Barnet II ◽  
Walter Block ◽  
Jerry Dauterive
Keyword(s):  
Market Failure ◽  
Jel Classification ◽  
Enterprise System ◽  
Market Failures ◽  
Free Enterprise ◽  
Negative Externalities ◽  
Government Failure ◽  
Palabras Clave ◽  
Good Market ◽  
El Sistema

The neoclassical economists have long used the concept of «market failure» as a stick with which to beat up on the free enterprise system. Foremost amongst these so called «market failures» are «negative externalities.» These are defined as action that negatively affects third parties, other than via price. The key example is pollution. These dismal scientists never mention, however, the fact that government itself is the source of negative externalities itself, particularly through the socialization of risk; e.g., social security, Medicare, Medicaid and other forms of socialized medicine, unemployment insurance, welfare, etc. The present paper is devoted to explicating and elaborating upon the concept of government failure. Key words: Externality, public good, market failure, neighborhood effect, government failure, moral hazard. JEL Classification: Q5; D62; H41. Resumen: Los economistas neoclásicos han utilizado durante mucho tiempo el concepto de «fallo de mercado» como un bastón con el que golpear sobre el sistema de libre empresa. Principalmente entre los llamados «fallos de mercado» se encuentran las «externalidades negativas». Estas se definen como acciones que afectan negativamente a terceras partes por vías distintas a los precios. El ejemplo clave es la polución. Sin embargo, estos «tristes» científicos nunca mencionan el hecho de que el propio gobierno es la fuente de las propias externalidades negativas, particularmente a través de la socialización del riesgo; por ejemplo, la seguridad social, los seguros médicos estatales, los seguros de enfermedad, los seguros de desempleo, la asistencia social, etc. El presente trabajo se dedica a explicar y ampliar el concepto de fallo del gobierno. Palabras clave: Externalidad, bien público, fallo de mercado, efecto de vecindario, fallo del gobierno, riesgo moral. Clasificación JEL: Q5; D62; H41.

scholarly journals An Analysis of Government Interventions in Addressing Market Failures Caused by Non-Excludable and Non-Rivalrous Public Goods Based on COVID-19 Vaccination Cases

2021 ◽  
Vol 4 (5) ◽  
pp. 89-92
Author(s):  
Wenqing Chen
Keyword(s):  
Public Goods ◽  
Market Failure ◽  
Free Rider ◽  
Market Failures ◽  
Vaccination Programs ◽  
Government Interventions ◽  
Private Goods ◽  
Free Rider Problem ◽  
Intervention Measures ◽  
The Government

The non-excludable and non-rivalrous characteristics of public goods distinguish them from private goods. The existence of these two characteristics leads to the “free rider problem” and the variation problem, making the market supply less than the actual demand, thus causing market failure. The government should therefore intervene against this impact. At the beginning of 2020, the global outbreak of the novel COVID-19 brought significant harm to various countries, races, and groups of people. In the second half of 2020, several companies developed vaccines, which are able to fundamentally block the transmission of the virus. However, as vaccines have been reducing the severity of the epidemic in certain regions, the situation somewhat reflects non-excludability and non-rivalry, in which before officially being listed in vaccination programs, the society may have the thought of “vaccination would reduce the risk of transmission; thus, I can enjoy the reduced risk of everyone being vaccinated without paying for it.” For this reason, most countries have been purchasing vaccines for the public through government appropriations to solve the free-rider problem. It can be said that in the face of market failure caused by public goods, the government should carry out timely intervention measures, including taxation and government appropriation, to avoid negative impacts from the characteristics of public goods.

Discontinuous Institutional Alternatives in the Context of Economy Deregulation

2004 ◽  
pp. 94-110 ◽  
Author(s):  
A. Shastitko
Keyword(s):  
Market Failure ◽  
Transaction Management ◽  
Market Failures ◽  
Relative Cost ◽  
State Participation

Various ways of state participation in the mechanisms of transaction management are considered in the article. Differences between compensation and elimination of the market failures are identified. Opportunities and risks of non-regulatory alternatives usage as a mean of market failure compensation are described. Based on classification of goods correlated to relative cost of their useful characteristics evaluation (search, experience, merit) questions of institutional alternatives in three areas (political, financial and commodity) are examined.

Grosser Wert und wenig Geld? Über die Honorierung von Waldleistungen | Highly Valuable But Hardly Remunerative? On Compensating Forest Benefits

1999 ◽  
Vol 150 (2) ◽  
pp. 41-48 ◽  
Author(s):  
Ingrid Kissling-Näf
Keyword(s):  
Social Change ◽  
Property Rights ◽  
Social Welfare ◽  
Public Goods ◽  
Market Failure ◽  
Public Funding ◽  
Forest Products ◽  
Marketing Strategies ◽  
Economic Perspective ◽  
Financial Compensation

Forests provide people with a variety of services and products (protection against avalanches, walking trails, etc.). Most forest services and products are not provided by markets and the extent of their availability is often guaranteed by public funding. In this context, the question arises whether the high benefits derived from forests could not be converted into cash more easily. Looking at various explanations for the market failure (externalities, public goods, property rights) possible marketing strategies for forest products and services and how they could optimize social welfare are investigated. Although general compensation criteria are not available, economic concepts (type of externality, scarcity, etc.) provide a first clue as to the necessity of compensation. However, mention must be made that compensation is always the result of a social agreement, and financial compensation as well as property rights are subject to social change. From a political and an economic perspective the payment of compensation for forest benefits is limited.

Regulation

2018 ◽  
Author(s):  
Robert Sugden
Keyword(s):  
Public Goods ◽  
Maximum Yield ◽  
Monopoly Power ◽  
Choice Overload ◽  
Market Failures ◽  
Governmental Regulation

Chapter 7 considers a range of conditions that are usually considered as ‘market failures’ to be corrected by governmental regulation. I discuss these conditions, and possible responses to them, from a contractarian viewpoint. I argue that neoclassical arguments for regulations against cartels and against the exploitation of monopoly power can be endorsed on contractarian grounds, as can certain kinds of regulations against spurious complexity in pricing. I raise doubts about the significance of behavioural arguments for regulation that assume choice overload or preferences for self-constraint. I develop a concept of consumers’ surplus that does not depend on assumptions about preferences, and is defined in terms of the maximum yield of discriminatory pricing. I discuss two opportunity-enhancing mechanisms for the supply of public goods.

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