The hottest Market failure Substack posts right now

Market failure in politics occurs when individual actions that seem rational result in group outcomes that are not beneficial; this concept extends beyond just economics.
Supporters of political parties often engage in actions that go against their own interests, creating market failures within the political system, which can lead to unintended consequences.
In politics, the balance between individual self-interest and the collective interest of a group can determine decision-making; sometimes, actions that benefit individuals may harm the overall success of a party or ideology.

Property rights play a crucial role in discussions about market failure and influence institutional choices.
Common-pool resources often have ill-defined property rights, leading to governance challenges but offering opportunities for diverse institutional solutions.
Elinor Ostrom's work emphasizes the importance of recognizing and addressing ill-defined property rights to achieve effective environmental policy outcomes.

Market failures often lead to arguments for taxes or subsidies to correct them.
AC Pigou's neoclassical approach to externalities suggests using taxes and subsidies to internalize costs.
While Pigou's model is flawed for policy, it remains a useful tool for understanding third-party effects in economics.

Internalizing externalities through taxes or subsidies can improve efficiency and welfare.
Pareto-relevant externalities are those that impact the outcome; not all externalities need to be internalized.
Individual values and costs are subjective, and internalizing externalities may not always create additional welfare.

Markets don't fail, they fail to exist.
Coase's focus on transaction costs and property rights revolutionized thinking about market failure.
Reducing transaction costs and clarifying property rights can enable decentralized solutions to market failures.

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There is a debate around slowing down AI development due to potential risks and concerns.
Consideration is needed for the time horizon and the length of potential delays in AI innovation.
Regulation and incentives for AI innovators play a significant role in the discussion surrounding AI adoption.