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Recommended readings (Machine generated): Paul A. Samuelson (1954), 'The Pure Theory of Public Expenditure', Review of … Lancaster (1997), 'The General Theory of Second Best', in Richard G. Lipsey (ed) (ed.), Microeconomics, Growth and Political … and Andrew B. Whinston (1965), 'Welfare Economics and the Theory of Second Best', Review of Economic Studies, 32 …
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Recent years have seen the development of new theories of market failure based on asymmetric information and network effects. According to the new paradigm, we can expect substantial failure in the markets for labor, credit, insurance, software, new technologies and even used cars, to give but a...
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This chapter studies second-best models of nutritional externalities, credit, and incomplete markets for risk, developing implications for welfare-improving government policy using primitive economic building blocks. Using a simple model of altruism wherein the rich obtain utility from the...
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Adam Smith turned economic theory on its head in 1776 when he declared that the pursuit of self-interest mediated by … controversy in modern economics from Smith to today. He traces the theory of market failure from the 1840s through the 1950s and …
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