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.

Political Centralization and Labour Coercion: Latin America and Russia in Comparative Perspective

Itinerario ◽  
1997 ◽  
Vol 21 (1) ◽  
pp. 137-156 ◽  
Author(s):  
Mario Pastore ◽  
Herman Freudenberger
Keyword(s):  
Latin America ◽  
Public Goods ◽  
Basic Principle ◽  
Free Riding ◽  
Free Rider ◽  
The Other ◽  
Comparative Perspective ◽  
Transactions Costs ◽  
Free Rider Problem ◽  
The Government

Government requires coercion, if only to arrest free riding. Physical coercion alone may not suffice for this purpose, however, and ideological means may be needed as well. This basic principle underlies all government. In market economies the coercive capabilities of government may be expected to be financed out of taxes ultimately levied on factor owners' money incomes, that is, on wages, profits, and rent. On the other hand, in economies where markets have not developed due to high transactions costs individuals' contributions to the provision of public goods will take the form of payments in kind and labour services. In this case, the free rider problem suggests labourers will attempt to shirk; the government, therefore, will have to compel labourers to work and, therefore, will appear to be coercing labour even though it may only be seeking to curtail shirking.

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 PENGARUH PAJAK PENGHASILAN TERHADAP KESEJAHTERAAN: SUATU MODEL TEORITIS

2009 ◽  
Vol 10 (1) ◽  
pp. 125
Author(s):  
Eddy Suratman
Keyword(s):  
Theoretical Model ◽  
Public Goods ◽  
Income Tax ◽  
Free Rider ◽  
Private Goods ◽  
Free Riders ◽  
Change Effect ◽  
Property Income ◽  
The Government ◽  
Tax Payers

Tax affects distortion on economy. To minimize the distortion, the government canonically switches the income resources to income tax from other types of tax deemed to have the least distortion. Furthermore, the increase of this income tax will affect the prosperity of the tax payers. This writing is aimed to develop a theoretical model of: firstly, change effect of income tax on income and leisure; secondly, change effect of income tax on consumptions of private goods and public goods; and thirdly, change effect of income tax on prosperities of tax payers and free rider. This writing indicates that (1) work and leisure hours are bound with time endowment, payment and property income after tax and utility parameter; (2) Income tax increase will promote leisure, thus income after tax will decrease; (3) As individuals, income tax payers can see this change positive or negative; and (4) Free riders will get their prosperity improved from income tax increase.

scholarly journals The Effect of Trusting and Trustworthy Environments on the Provision of Public Goods

2020 ◽  
Author(s):  
Sergio Lo Iacono ◽  
Burak Sonmez
Keyword(s):  
Public Goods ◽  
Learning Effect ◽  
Free Rider ◽  
Trust Game ◽  
Similar Distribution ◽  
Incentive Structure ◽  
Free Rider Problem ◽  
Free Ride ◽  
Relevant Effect ◽  
Distribution Of Resources

Abstract Trusting and trustworthy environments are argued to promote collective action, as people learn to rely on their fellow citizens and believe that only few individuals will free ride. To test the causal validity of this mechanism, we propose an experimental design that allows us to create different trusting and trustworthy conditions simply by (i) manipulating the incentive structure of an iterated binary trust game and (ii) allowing information to flow among participants. Findings indicate that, given a similar distribution of resources among subjects, trusting and trustworthy environments strongly foster the provision of public goods. This outcome is largely driven by a learning effect: subjects transfer what they assimilate during a sequence of dyadic exchanges to their decision to act for the collectivity. In particular, results showed that what we learn from the community has a relevant effect on our ability to overcome the free-rider problem: we are more likely to act for the collectivity when we learn from the community to be trustful or reliable in our one-to-one interactions. The same applies in the opposite direction: we are more prone to free ride when we learn from the environment to be distrustful or unreliable in our dyadic exchanges.

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

Trade Union Orientation and Macro-Economic Management

2003 ◽  
Vol 06 (03) ◽  
pp. 381-403 ◽  
Author(s):  
Rosalind Chew ◽  
Soon Beng Chew
Keyword(s):  
Labor Movement ◽  
Full Employment ◽  
Industrial Relations ◽  
Free Rider ◽  
Exchange Rate Policy ◽  
Economic Management ◽  
Strategic Partner ◽  
Free Rider Problem ◽  
Rate Policy ◽  
The Government

This paper makes the distinction between micro-focused unions and macro-focused unions, with the latter emphasizing full employment and competitiveness for the economy. It examines the micro-foundation of the macro-focused labor movement, which calls for certain conditions or arrangements conducive to, and the instruments needed for, the establishment and survival of macro-focused unions. The consequences and outcomes in an industrial relations regime in which macro-focused unions prevail are also examined, and measures for countering the free rider problem suggested. The main conclusion is that a macro-focused labor movement is a strategic partner with the government in enhancing international competitiveness, an option which is superior to an exchange rate policy.

Soliciting Accurate Evaluations of Public Goods

1981 ◽  
Vol 9 (2) ◽  
pp. 221-234 ◽  
Author(s):  
A. H. Barnett
Keyword(s):  
Risk Aversion ◽  
Public Goods ◽  
Free Rider ◽  
Public Funds ◽  
Policy Makers ◽  
Free Rider Problem ◽  
Bidding Mechanism ◽  
The Many

Among the many problems faced by policy makers in attempts to use public funds efficiently, none is more troublesome than that of inducing users of public goods to reveal their demand prices. The difficulty in attempts to solicit demand prices falls under the general rubric of the free-rider problem, and is manifest in the propensity of users to behave strategically when asked to reveal evaluations. Several preference revelation devices have been proposed to surmount this problem, but all of these schemes are seriously flawed. This article presents a device which overcomes some of the flaws contained in previous work. The preference revealing mechanism proposed here is a bidding mechanism which takes advantage of the commonly found trait of risk-aversion to discourage strategic revelations.

scholarly journals Government Failures in Development

1990 ◽  
Vol 4 (3) ◽  
pp. 9-23 ◽  
Author(s):  
Anne O Krueger
Keyword(s):  
Developing Countries ◽  
Market Failure ◽  
The Political ◽  
Economic Policies ◽  
Market Failures ◽  
Political Arena ◽  
Positive Theory ◽  
Government Behavior ◽  
Government Failure ◽  
The Government

By the 1970s and early 1980s, governments in most developing countries were mired down in economic policies that were manifestly unworkable. Whether market failures had been present or not, most knowledgeable observers concluded that there had been colossal government failures. In many countries, there could be little question but that government failure significantly outweighed market failure. This essay focuses on insights relating directly to government behavior affecting economic activity and economic growth in developing countries. It briefly examines each of the following questions: 1) What is “the government”? 2) What is the comparative advantage of government? 3) What are the dynamics of government intervention? 4) Can a positive theory of political behavior be formulated that will help explain when and how alternative policies will evolve in the political arena?

scholarly journals The East Asian Model of Economic Development and Developing Countries

2002 ◽  
Vol 18 (4) ◽  
pp. 330-353 ◽  
Author(s):  
Jong H. Park
Keyword(s):  
Economic Development ◽  
Southeast Asia ◽  
East Asian ◽  
Northeast Asia ◽  
Market Failures ◽  
Government Interventions ◽  
Scarce Resources ◽  
Asian Economies ◽  
The Government ◽  
East Asian Economies

This paper examines the debate on the East Asian model of economic development in light of the different approaches undertaken by different groups of countries (economies) in Northeast Asia and Southeast Asia. The common strengths and weaknesses shared by the East Asian countries (economies) have helped to reinforce the misconception that there is a single East Asian model of economic development. There are, however, significant differences in economic structures as well as development experiences among the East Asian economies, especially between the economic development paradigms of Southeast Asia and Northeast Asia. Nonetheless, one single common thread underlies the differences in development strategies and experiences among the East Asian economies—the role of the government. The governments of East Asia have recognized the limitations of markets (or market failures) in the allocation of scarce resources in the economy, and have used government interventions to promote economic development. The recent Asian crisis hardly signifies the end of the so-called East Asian model of economic development.

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