Daniel l. Rubinfeld
Daniel l. Rubinfeld
Daniel l. Rubinfeld
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Contents<br />
Contents<br />
17<br />
18<br />
16.4 Efficiencv in Production 578<br />
Production in the Edgeworth Box 578<br />
Input ~fficieilClI 579<br />
Producer Equilibrium in a Competitil'e InpIlt IvIarket 580<br />
The Productioll Possibilities Frolltier 581<br />
Output EjJidellcy 583<br />
Efficiency in Output lvIarkcts 584<br />
16.5 The Gains from Free Trade 585<br />
ComparatiI'e AdI'alltage 585<br />
All Expanded Production Possibilities FrOlltier 587<br />
16.6 An Owrview-The Efficiency of Competitiw Markets 590<br />
16.7 Wlw Markets Fail 591<br />
lvIarkct Power 592<br />
Incomplete Informatioll 592<br />
Externalities 592<br />
Pl!blic Goods 593<br />
Summary 593<br />
Questions for Review 594<br />
Exercises 594<br />
17.1 Quality Uncertainty and the Market for lemons 596<br />
The lvlarket for Used Cars 596<br />
Impliclltiolls ~f Asymmetric f;~formlltioll 598<br />
The Importllllce ~r Reputlltioll Ilnd Stlllldllrdi:lltion 599<br />
17.2 Market Signaling 601<br />
A Simple Ivlodel of Job Mllrket Signlliing 602<br />
GUllrantecs and Wllfmnties 604<br />
17.3 Moral Hazard 606<br />
17.4 The Principal-Agent Problem 609<br />
The Principal-AgCllt Problem in PriI'llte Enterprises 610<br />
The Principlll-Agent Problem in Public Enterprises 610<br />
IncCIltiues in the Principal-Agcnt Framcwork 612<br />
*17.5 Managerial Incentives in an Integrated Firm 613<br />
AS1flllllletric lI~t(ml1lltion Ilnd Incentivc Design in the Intcgmtcd Firm 614<br />
Applicatiolls 616<br />
17.6 Asymmetric Information in labor Markets: Efficiency Wage Theory 616<br />
Summary 619<br />
Questions for Review 619<br />
Exercises 619<br />
18.1 Externalities 621<br />
Neglltil'c Extcl'Illllities and In~fficicllcy 622<br />
PositiI,c Extcl'lllliities Ilnd IIl~fficiellcy 623<br />
18.2 Ways of Correcting Market Failure 625<br />
All EmissiOlls Stllndard 626<br />
An EmissiOlls Fee 626<br />
APPENDIX<br />
Stllndllrds I'crsus Fees 627<br />
Trallsfemble Emissiolls Permits 630<br />
Recyclillg 634<br />
18.3 Externalities and Property Rights 638<br />
Property Rights 638<br />
Bargllilling and Ecollomic Efflciellcy 638<br />
Costly Bllrgllining-The Role of Strategic Bchauior 640<br />
A Leglll Solution-Suing for Dllmllges 640<br />
18.4 Common Property Resources 642<br />
18.5 Public Goods 644<br />
E_fficiency Illld Public Goods 646<br />
Public Goods Ilnd Mllrket Fllilure 647<br />
18.6 Private Preferences for Public Goods 649<br />
Summary 651<br />
Questions for Review 651<br />
Exercises 652<br />
The Basics of Regression 655<br />
An. Example 655<br />
Estimation 656<br />
Statistical Tests 657<br />
Goodness of Fit 659<br />
Economic Forecasting 660<br />
Glossary 663<br />
Answers to Selected Exercises 675<br />
Index 687<br />
Example 1.1 Markets for Prescription Drugs 10<br />
Example 1.2 TIle Price of Eggs and the Price of a College Education 12<br />
Example 1.3 The Minimum Wage 13<br />
Example 2.1 The Price of Eggs and the Price of a College Education<br />
Revisited 26<br />
Example 2.2 Wage Inequality in the United States 27<br />
Example 2.3 The Long-RIm Behavior of Nahll'al Resource Prices 28<br />
Example 2.4 The Market for Wheat 33<br />
Example 2.5 The Demand for Gasoline and Automobiles 39<br />
Example 2.6 The Weather in Brazil and the Price of Coffee in Ne\v York 41<br />
Example 2.7 Declining Demand and the Behavior of Copper Prices 47<br />
Example 2.8 Upheaval in the World Oil Market 49<br />
Example 2.9 Price Controls and Natural Gas Shortages 54<br />
Example 3.1 Designing New Automobiles (I) 71<br />
Example 3.2 Designing New Automobiles (II) 81<br />
Example 3.3 Decision Making and Public Policy 82<br />
Example 3.4 A College Trust Fund 85<br />
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