3 PIGOU What’s Wrong with the World, Part 1

3 What’s Wrong with the World, Part 1
Note:3@@@@@@@@@@@@@PROBLEMA DELLE ESTERNALITÀ. REGOLE vs tasseRENT SEEKING COME COSTO DEL TRASFERIMENTOil danno netto dei furti é pari al costo di organizzarlo.frodi: c é frode solo con arricchimento del frodatore. Altrimenti é imperizia. Il caso del manager.

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under what circumstances does individual rationality fail to lead to group rationality—to
Note:La disarmonia fondamentale

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consider my decision of which computer game to play this evening.
Note:Una decisione che influenza solo me

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Suppose I decide to put my house up for sale. One result is that my neighbor ends up selling his house for five thousand dollars less
Note:Il caso particolare della concorrenza

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but the person who bought his house at the lower price is five thousand dollars better off,
Note:Danno compensato

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I impose no net cost on others,
Note:Quindi

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When my steel mill produces a ton of steel, I pay my workers for the cost of their labor, I pay the mining firm for the cost of its ore, but I do not pay the people downwind for the sulfur dioxide I am putting into their air.
Note:Una esternalitá nn compensata.

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One solution is direct regulation:
Note:La soluzione inefficiente

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The first is that the EPA may not be interested in maximizing efficiency.
Note:PRIMO PROBLEMA: PUBLIC CHOICE

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The second problem is that, even if the EPA wants to maximize efficiency, it does not know how to do it.
Note:Secondo problema: ignoranza

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Instead of telling the firm what it must do, the regulator simply charges the firm for its pollution.
Note:Soluzione pigouviana

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the regulator does not have to know anything about the costs of pollution control;
Note:VANTAGGIO

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A second advantage is that this approach generates not only the right amount of pollution control but the right amount of steel as well.
Note:Il secondo vantaggio

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it may not be easy to measure the damage actually done by each additional pound of sulfur dioxide,
Note:Inconveniente. Il calcolo della tassa.

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the same analysis can be used to explain large parts of tort law.
Note:La pena come tassa pigouviana

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When I drive fast I am imposing a cost, in additional accident risk, on other drivers.
Note:Un applicazione pratica

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Rent Seeking: How Not to Give Things Away

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Ttttttttttttt

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A clever—and mischievous—reader might suggest extending the argument from competition to theft.
Note:Prima abbiamo visto i danni della competizione considerandoli bilanciati. Conclusioni impertinenti. Se assumiamo che i dollari abbiano lo stesso valore x il ladro e il derubato...

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Picking pockets is not a costless activity; it involves time, training, and a variety of risks.
Note:Risposta: rubare costa

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I gain fifty dollars at a cost of twenty,
Note:L ineffcienza

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the net effect is to transfer fifty dollars from you to me at a cost of twenty, making us on net twenty dollars worse off.

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So far we have omitted the cost to the victims of their precautions—sore
Note:Altri costi: psicologia e allarmi

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The general term for this phenomenon is “rent seeking.” It occurs when there is an opportunity for people to spend resources transferring wealth from others to themselves.
Note:Chi campa sui costi di traaferimento

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competition for government favors
Note:Un esempio di rent seeking

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Firms competed to get those valuable favors by public relations efforts, lobbying, campaign contributions, bribes.

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consider litigation. Each side is spending money on lawyers, expert witnesses, and the like in order to increase its chance of winning the case.
Note:Altro esempio

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This is a less clear example of rent seeking because it is at least possible that the expenditures are producing something valuable: an increased probability of a correct verdict,

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Getting It Wrong: Fraud on the Market Suits
Note:Ttttttttttt altro caso di inefficienza

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The CEO of a company gives an optimistic speech. Six months later the newest product turns out to be a flop, and the company’s stock falls.
Note:Il manager sta truffando?

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omitting relevant facts that might have led to a more pessimistic conclusion,
Note:L argomento dell avvocato

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Since the potential damages are enormous, even a small chance of success is enough to make it in the interest of some defendants
Note:Avvocati che ci marciano

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CEOs are no more omniscient
Note:Primo problema x una causa del genere

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Customers are free to decide for themselves whose predictions to believe.
Note:Secondo problema

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I bought a share from you for a hundred dollars and it later fell to fifty.
Note:Terzo problema: ma c é un danno netto?

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I am fifty dollars worse off as a result of my believing the CEO, but you are fifty dollars better off.

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We get a net externality only if I bought the stock from the CEO, making the effect of his speech a transfer from him to me and converting the situation from pecuniary externality to rent seeking.
Note:Il costo del discorso manipoatorio. Ma se il manager nn ci guadagna?

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One result is to penalize executives for making predictions that might turn out to be wrong, thus reducing the total amount of information available
Note:Un danno del considerare tutto frode

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it provides injured stockholders an incentive to sue and thus deters fraudulent statements
Note:La risposta di chi considera il discorso fraudolento

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One might, on similar grounds, argue that since we want to deter illegal parking, anyone who finds an illegally parked vehicle should be allowed to claim it for his own. What we want, here as in many other cases, is not an incentive but the right incentive,
Controreplica: NON UN INCENTIVO MA IL GIUSTO INCENTIVO