Public Finance

2.

Market Failures and Government Intervention

2.1.

Public Goods Theory

2.1.1.

Characteristics of Pure Public Goods

2.1.1.1.

Non-rivalry in Consumption

2.1.1.2.

Non-excludability

2.1.2.

Classification of Goods

2.1.2.1.

Pure Public Goods

2.1.2.2.

Pure Private Goods

2.1.2.3.

2.1.2.4.

Common Pool Resources

2.1.3.

Impure and Local Public Goods

2.1.4.

The Free-Rider Problem

2.1.5.

Optimal Provision of Public Goods

2.1.5.1.

The Samuelson Condition

2.1.5.2.

The Lindahl Pricing Model

2.1.5.3.

Voluntary Contribution Mechanisms

2.1.5.4.

Preference Revelation Mechanisms

2.2.

2.2.1.

Types of Externalities

2.2.1.1.

Negative Externalities

2.2.1.2.

Positive Externalities

2.2.1.3.

Pecuniary vs. Technological Externalities

2.2.2.

Private and Social Costs and Benefits

2.2.3.

Measuring Externalities

2.2.4.

Solutions to Externalities

2.2.4.1.

Private Solutions

2.2.4.1.1.

Coase Theorem and Private Bargaining

2.2.4.1.2.

Conditions for Coase Theorem

2.2.4.1.3.

Limitations of Private Bargaining

2.2.4.2.

Government Intervention

2.2.4.2.1.

Pigouvian Taxes and Subsidies

2.2.4.2.2.

Regulation and Command-and-Control Policies

2.2.4.2.3.

Cap-and-Trade Systems

2.2.4.2.4.

Standards and Quotas

2.3.

Information Problems

2.3.1.

Asymmetric Information

2.3.1.1.

Adverse Selection

2.3.1.2.

2.3.2.

Applications to Public Policy

2.3.2.1.

Insurance Markets

2.3.2.2.

Public Program Design

2.3.2.3.

Monitoring and Enforcement

2.4.

Market Power and Competition

2.4.1.

Natural Monopolies

2.4.2.

Regulation of Monopolies

2.4.3.

Antitrust Policy

2.4.4.

Public Enterprise

Previous

1. Introduction to Public Finance

Go to top

Next

3. Public Expenditure Analysis