Term
| Asymmetric Information (demand) |
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Definition
| not equal information. used cars performance problems are not revealed to potential consumers |
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Term
| With asymmetric info (demand) (2) |
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Definition
1 consumers pay too much for the products
2 from the view of the efficiency too much is consumed |
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Term
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Definition
| not equal, one sided information, one party knows more |
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Term
| Asymmetric information (supply) |
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Definition
| worker safety: health risks from producing butter flavored micro wave popcorn |
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Term
| With Asymmetric Info (supply) |
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Definition
- workers will be under compensated
- from the view of efficiency too much labor is supplied |
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Term
| Government ensures consumer and worker safety through.... |
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Definition
| productive regulation. different agencies regulate different aspects of the marketplace |
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Term
| Private regulation forms when... |
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Definition
| customers perceive that government quality regulations are insufficient. |
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Term
| Private regulation will be profitable for firms if.. |
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Definition
| .the market values the additional regulation over the cost of providing it |
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Term
| Examples of private regulation |
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Definition
1 Best Western
2 Underwriters Laboratories
3 Carfax.com |
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Term
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Definition
1 don't always consider the costs of regulation
2 Funded through taxes paid by all individuals
3 tend to respond to only media scares |
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Term
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Definition
1 profitability depends on the efficiency of value of brand vs cost of implementation
2 People that benefit from regulation pay cost of implementation for it
3 Based on the need for regulation from within the industry |
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Term
| How much regulation is efficient |
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Definition
1 individuals benefit from ensuring safety in consumer products and working conditions
2 however each level of safety is costly to obtain |
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Term
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Definition
| No it is efficient to enact only the regulations that are more beneficial than costly. Regulate to the point where MC=MB |
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Term
| Socially minded NGOs will take action whenever... |
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Definition
| they believe public and private regulation are insufficient at ensuring quality |
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