[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

Looking Ahead
We have now examined four situations in which markets may fail to develop an
efficient allocation of society’s scarce resources. In each of these cases—imperfect
competition, imperfect information, externalities, and public goods—a role for government
exists. Government can employ a variety of policies to promote competition,
address the problems created by externalities and imperfect information, and
supply public goods.
In the next several chapters, we will study market failures in more detail, beginning,
in Chapter 12, with the analysis of imperfect competition—including the extreme
case, that of a monopoly. Chapter 13 shows how public policy mitigates the results
of imperfections of competition. Subsequent chapters will deal with strategic behavior
when competition is imperfect (Chapter 14), with imperfect information in the
product market (Chapter 15), and with the effects of imperfect competition and
imperfect information on labor markets (Chapter 16).
256 ∂ CHAPTER 11 INTRODUCTION TO IMPERFECT MARKETS