Market Failures and Policy Responses

This course discusses several ways in which market outcomes fail to be efficient. A first part of the course considers externalities and public goods and discusses a variety of policy remedies: market-like institutional responses and government responses may be more suitable depending on the environment. A second part of the course discusses missing markets and property rights. A third part of the course discusses informational imperfections, going from search frictions to adverse selection moral hazard, and coordination failures. The course concludes with a discussion of government failures.