Market Failures and Policy Responses

This course discusses several ways in which market outcomes fail to be efficient. It introduces alternative notions of efficiency that are adapted to different environments. A first part of the course discusses externalities and public goods, also discussed in introductory classes. However, policy remedies are addressed in more depth. A second part of the course discusses missing markets and property rights. A third part of the course discusses informational asymmetric, going from search frictions to adverse selection and moral hazard.