Pigouvian vs. Coasian approach: Ideas, values, perspectives

The paper reveals the characteristics of competing approaches — Pigouvian and Coasian — to identify the grounds for state regulation. We outline the connections between Pigouvian and Coasian approaches with the values and prospects for their advancement in the field of political decision-making in the context of demand for economic knowledge and the possibilities of organizing compensating transactions. These connections are considered in the light of the externalities problem as one of the manifestations of market failure, as well as different internalization options. We also clarify the provisions from the theory of externalities in terms of their definition, classification and correlation with the conditions for optimal allocation of resources. The key types of structural alternatives for correcting market flaws are considered, and the main properties of the Pigouvian and Coasian approaches in economics, as they relate to the problem of market and government flaws, are determined. This helps explain why the Coasian approach cannot be considered synonymous with liberal fundamentalism. Finally, we indicate the relationship between normative conclusions and prospects of functionalism and two types of fundamentalism in the field of political decision-making. Using the example of intertemporal externalities, the difference in the approaches of Coasianism and Pigouvianism to their internalization is demonstrated.

Information needs and delivery channels: Experimental evidence from Cambodian smallholders

Despite numerous policy interventions, poverty still exists. Those most harshly affected are people living in rural areas of low-income countries, regions that are often characterized by information asymmetries leading to market failure. The widespread growth of information and communications technologies (ICTs) in remote areas across the world holds immense potential for lifting the information barriers of the rural poor. However, there is little evidence of the effectiveness of delivery channels, which might be one reason why digital advice differs in its impact. Seeking to ascertain how smallholders can best be served by ICT, the authors investigated information needs and effective ICT delivery channels. Sociodemographic and ICT-related data was collected and a framed field experiment was conducted with smallholders in Cambodia; they were asked to build an object while using various delivery channels for instruction. Employing different regression techniques and matching algorithms, the experiment reveals that multisensory instructions trump all others.

Test of Asymmetric Information in the Nepalese Reinsurance Market

Background: The imperfect information can cause an imbalance of power which may lead to market failure thus collection of information is very essential in today’s business world therefore, the availability of the correct and accurate information is very crucial for making sound economic decisions. Thus, information asymmetry has been a very pertinent issue where economic transaction takes place insurance market is not far behind. As, reinsurance provides huge indirect capital to the insurance industry, providing correct information’s like premium earned, claim by the insurer to the reinsurer’s for fair pricing of reinsurance premium along ensuring top rated reinsurance company remain in Nepalese insurance industry. Objectives: This study aims to examine whether there remains asymmetric information in Nepalese insurance market with reinsurer’s perspective in different portfolios such as fire, marine, motor, engineering and miscellaneous as well as combining all portfolio in aggregate. Methods: The study uses descriptive and causal relation research design. Further, the study uses secondary data of 14 nonlife insurance from 2008/09 to 2018/19 with 168 firm year observations Result: Results of the study revealed that that only in fire, marine and overall portfolios there exists strong asymmetric information. Rest of the portfolio like motor, engineering and miscellaneous there is no evidence of existence of asymmetric information. Conclusion: Existence of asymmetric information is mostly an inevitable part as one party always tries to avoid information to others for the sake of benefit. However, the existence of asymmetric information to a large extent may lead to unhealthy relations between the parties and may bring the cold war distortion of relations. Thus, the finding of the studies is beneficial to the Nepalese nonlife insurers as insurers need to provide correct and accurate information to the reinsures Implication: To cope with asymmetric information in the Nepalese insurance industry, this study provides strong evidence to provide correct and accurate information’s to the reinsurers else top rated reinsurers might withdraw their presence from the Nepalese market which will have adverse effect in the insurance industry.

Broadband Connectivity, Government Policies, and Open Innovation: The Crucial IT Infrastructure Contribution in Scotland

Broadband connectivity is now essential to ensure a competitive advantage for any business. The analysis of Scotland’s crucial IT infrastructure contribution supported the authors’ thesis that the Government plays a decisive role in Open Innovation ecosystems. Indeed, IT infrastructures are a clear case of market failure where remote areas will never be served by adequate connectivity without public support. The main contribution is the demonstration that the benefits of public intervention are sometimes required and beneficial to correct market distortions and generate positive spillovers in terms of collaboration in Open Innovation ecosystems. Another relevant contribution is a comprehensive analysis of the consistency of the evolution of the public policies that supported the IT Infrastructure in Scotland. Therefore, pivotal is the study of this case study that can be easily generalised to many other contexts where the Government addressed market failures and, at the same time, contributed to generating collaborative environments.

Asymmetric Information, Transaction Costs, and Farmers Decision To Participate In Tobacco Voor-Oogst Kasturi Contract Farming

Contracts participation between tobacco farmers and traders is still low even benefit of contract is huge. This is related to factors that affect to the contract, demographics, farm characteristic, and other related factors. Contracts that initially became a tool to prevent market failure because it regulates how economic actors act against other, turns out to cause transaction costs as a result of asymmetric information that makes the contract does not function ideally. Therefore, this study attempts to explain asymmetry information during the transfer product and the potential transaction costs incurred using the New Institutional Economy approach. Beside that, this study also attemps to explain factors that underlie farmers decision making partnership, that were analized by using the analyst logistic regression.Respondents in this study were 100 respondents, 50 tobacco contract farmers, and 50 independent farmers from December 2018 through January 2019. The results showed that asymmetric information caused adverse selection and moral hazard, as many as 30% farmers had sold products to other parties and 8% of farmers had used pesticides that prohibited by traders. Contracts that are not ideal due to asymmetric information must be re-enforced by using additional costs called transaction costs which are divided into three typess, namely search and information costs, cost to design, negotiate and conclude and the monitor and contract enforcement costs. Monitoring costs have the potential to absorb the largest portion compared to other types of transaction costs. The greater the asymmetric information generated, the greater the transaction costs incurred. Then the factors that significantly influence the decision making of tobacco farmers to partnership are long time farming experience, land size, risk aversion level, certainty of price and source of capital.

Improving mariculture insurance premium rate calculation using an information diffusion model

Mariculture is a well-known high-risk industry. However, mariculture insurance, which is an important risk management tool, is facing serious market failure. An important reason for this market failure lies in the unsound premium rate and pricing method. Due to a lack of long-term yield data, empirical rates are often adopted, but this adoption can lead to a high loss ratio. This paper provides an improved method for premium computation of mariculture insurance using an information diffusion model (IDM). An example of oyster insurance in China shows that, compared with the traditional pricing approach, the IDM can greatly improve the accuracy and stability of premium rate calculations, especially in cases of small samples.

Improving the Drug Development Pipeline for Mycobacteria: Modelling Antibiotic Exposure in the Hollow Fibre Infection Model

Mycobacterial infections are difficult to treat, requiring a combination of drugs and lengthy treatment times, thereby presenting a substantial burden to both the patient and health services worldwide. The limited treatment options available are under threat due to the emergence of antibiotic resistance in the pathogen, hence necessitating the development of new treatment regimens. Drug development processes are lengthy, resource intensive, and high-risk, which have contributed to market failure as demonstrated by pharmaceutical companies limiting their antimicrobial drug discovery programmes. Pre-clinical protocols evaluating treatment regimens that can mimic in vivo PK/PD attributes can underpin the drug development process. The hollow fibre infection model (HFIM) allows for the pathogen to be exposed to a single or a combination of agents at concentrations achieved in vivo–in plasma or at infection sites. Samples taken from the HFIM, depending on the analyses performed, provide information on the rate of bacterial killing and the emergence of resistance. Thereby, the HFIM is an effective means to investigate the efficacy of a drug combination. Although applicable to a wide variety of infections, the complexity of anti-mycobacterial drug discovery makes the information available from the HFIM invaluable as explored in this review.