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트렌드 검색
Liability Law Apparoach
e.g Taxation, Fines etc..
Pros: It would reduce the level of
"pollution" / Negative Externalities
It has moral appeal - because its based on the premise of punishing the prepetrator
Cons: Monitoring costs are high
Legal remedies are slow and costly
Often leads to complex questions that judges and juries find difficult to follow
Depends on formulas specified for calculating the exact amount of tax/ penalty
Works best if the number is small and their victims are easily identified
Law suits maybe unfair if the damaged individuals don't have the resources to undertake law suits
If the number of parties is large - it is difficult to determine who was liable to what degree
Property Rights Approach
Professor Ronald Coase - University of Chicago- (Also known as The Coase Theorem)
He proposed that "simply by assigning property rights we can overcome the externality " ... so how does this work ?
Pros: Assignment can be complety arbitary but it will lead to a optimum reduction in pollution
Reduces the role of public prosecutors
Optimal level of pollution is determined by voluntary negotiations of private parties
Cons: Property rights must be well defined, enforceable and tansferable
High transaction costs - due to negotiations
It assumes the continuity of the business
Intertemporal barganing is difficult
Voluntary Actions Approach
(not mandated by laws or regulations) --- when might this work ?
It works when people have strong social conscience
(but since wealthier consumers are more likely to pay for "green goods" - there is avenue for price discrimiation
Moral Suasion - is about promoting ethically driven actions (part information / part persuasion - i.e people case but don't fully understand the environmental damage of their actions)
But the problem is not all people respond equally
Market Driven Voluntary Action -
Based on Margolis (2007) - Harvard Business School - showed a positive relationship between running a socially responsible business and finanical performance
Travel Cost Valuations
Indirect Method that assumes that it should be possible to infer the value people place on a environmental amenity based on the amount of money they spend to get there
Involves doing surveys and running regression or monte carlo type models
Cons: there is ommited variable bias (i.e based on your regression equation)
Not applicable to things like air quality
Contingent Valuation
Relies on people to state the value they place on an environmental good
Pros:
It can deal with use and non use existence values (not just places people travel to) - and relatively simple
You can ask about both "willingness to pay" and "willingness to accept" for environmental damage
Cons:
If you ask hypotetical questions you will get hypothetical answers -
Not a ture measure of if people will commit to the amount they state
Hedonic Price Method
Damage Funtion Method
Adverting Expenditue Method
Economic Growth is an important consideration to environmental economics because it is used as an argument for "prosperity" ....
Prosperity as Oppulance
Prosperity as Utility
Prosperity as Capabilities flourishing
Is economic growth necessary for prosperity ?
Bigger share of the pie ? or is the pie itself big enough ?
John Nash (1928- 2015)
Confess
Stay Quiet
Do Nothing
Advertise
Person A
3 0
Pay a Price
1 1
50 x $2 = $100
30 x $2 = $60
Stay Quiet
Do Nothing
70 x $2 - $20 = $120
50 x $2 = $100
-$10 + $20 = $10
-$10 + $10 = $0
Pay a Price
2 2
-$10 +$20 = $10
0 3
Person B
Confess
-$0 +$10 = $10
70 x $2 - $20 = $120
50 x $2 - $20 = $80
Advertise
50 x $2 - $20 = $80
30 x $2 = $60
-$0 + $10 = $10
Do Nothing
-$0 + $0 = $0
"The Prisoner's Dilemma"
-$10 + $0 = -$10
-$0 + $0 = $0
Game Theory
Thank you