The Coase Theorem
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- Опубликовано: 27 авг 2024
- In this video, we show how bees and pollination demonstrate the Coase Theorem in action: when transaction costs are low and property rights are clearly defined, private arrangements ensure that the market works even when there are externalities. Under these conditions, the market properly manages externalities.
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Taking environmental and resource economics in college, these videos are awesome! Thank you guys for making economics entertaining. I really appreciate the quizzes, lol!
Greets from Germany, you guys are helping me loads (Y)
Glad to hear it, Joseph! :) - Meg
Increíble, muchas páginas incomprensibles resumidas en algo tan simple. Muchas gracias, ciertamente las personas que aman lo que hacen realmente pueden transmitir con facilidad sus ideas.
Instablaster.
you guys are life savers
thank you for the video. it helped me quite a lot!
Greets from India! Thanks a lot for the video
The Pollution vs Flu shot argument is flawed. In the first case, you are actively taking an action that will cause others harm (polluting) in the second case, it is the lack of action that causes others harm (not getting a flu shot).
If I want to start doing something I must first consider who it will affect and compensate any people who will be harmed. You don't choose to get the flu, the choice is to prevent yourself from getting the flu, so the harmful action is not your own.
But in his example, he meant that as people we are aware that not getting a flu shot will probably result in causing harm to our surroundings, which makes this non-action "punishable". As you said, it is true that you don't choose to get the flu, but you are very aware that there is a probability of infecting people if you don't take the shot (which leads to a ripple effect of disease spread). Although this probability is not very quantifiable, as well as the factory's unclear externalities, such opaque properties make the example worthwhile. If public policy made it mandatory for everyone to get a shot, opting out of that standard would imply taxes or fines for those not taking the shot. Hence, drawing this parallel helps him define property rights as a right to clean air and population health, and the opacity extent to which it is hard and time-consuming to find an agreement in either case.
@Robert I think what he meant is in a world of transaction costs and
externalities, welfare is maximized if the property right is assigned to the party with
a higher cost of reducing the externality.
Unless you're locked in doors, you do "choose" to go outside and put yourself in a position where you are at higher risk of getting the flu. Further, once you have the flu, you do choose to still be around others and consequently create the circumstances that allow you to sneeze on someone (as opposed to sneezing at home).
Either way, he wasn't saying that the cases entirely mirror each other. The purpose of that illustration was to point out that property rights and liabilities are sometimes not clearly defined by the law, and this leads to higher transaction costs and market failures.
This is such a beautiful concept
Semi-related: My insurance company pays me $25 to get the flu shot each year.
Do Coase Theorem have some implicit and unrealistic assumptions, like:
1) Parties are fully informed about the future consequences of their actions and externalities
2) You can buy, repair or substitute everything (including the consequences of externalities) with money
3) Historical evolution of events that made some externalities look inevitable today; maybe there are some long-term social & ecological solutions that can make negative externalities completely unnecessary in future
The image from 0:39 to 2:17 isn't a bee. It's a fly.
Thanks for your content really helpful and time saving. 👍🏻
This really helped ,y understanding of the topic!
Watched 11/2/22 - Austin Carrara
What an interesting explanation and analogy
Thanks for the explanation.
Thanks so much, very helpful
Excellent, many thanks.
A great video :) Thank you!
how this theorem is related to the Kyoto protocol?
There is a mistake with Coase Theorem. If the affected party does not have the property rights, and does not have the wealth to bargain and reach a mutual beneficial solution, then it is basically screwed.
well they could sue for damage cause by the pollution
Amazing video
we need diagrams ..
any ideas? then suggest! :)
I love you guys! lol
6:48 / 8:15
6:20 / 8:15
oh boy, I'm watching this to prepare for my exam tomorrow and I can't stop thinking about the anti-vax movement and how they will be so mad if they see it
Especially with COVID right now
I also have an exam about this tomorrow XD
Thank you :)
"moreover"
The factory shouldn't pollute and it shouldn't expect to be rewarded for not polluting ... I would have imagined common decency would have settled that!
Can you tell the person with the flu the same thing - that it's common sense not to pollute others with their coughing?
Well there are some categorical and other differences between the two examples.
1. If you catch the flu and contaminate the space shared with others, it is because you have NOT taken a specific action to prevent that. If the factory pollutes, it is because it is actually carrying out an action that with certainty leads to that. It is therefore actively contributing to produce an externality. It might be worth adding that most people think (common sense) that other people should avoid public spaces when they have the flu.
2. The person catching the flu does so involuntarily and without self-gain. The polluting factory (and the consumers consuming the produce) benefits directly from taking the action which lead to externalities. If someone would profit financially from just having the flu, I think most people (common sense) would think that that person has a responsibility to make sure that others weren't affected (this is the proper analogy).
Of course, one can claim that the individual avoids the cost that the vaccination would incur and by doing so would benefit indirectly. However, then you will end up in discussions that goes back to the above.
On what were you typing that comment : ) You are a direct beneficiary of pollution if you own a phone/computer. Less Pollution=more expensive stuff.
jesus what a brainlet can you keep up?
Any of my aca deca peeps here?
i like this guy but he says "moreover" may too much
:)
Acid Rain...? Increasing global sea levels...? What decade is this? Watch out for Y2K ;)
Sorry Cheung isn't right, you cannot drive with bees from garden to garden. They die, excuse me on the long term.
nonsense
Don't know much about beekeeping or farming do you.
Yves Helsen This is trolling, right?
@@TravisTerrell No, unfortunately. It is a lot of stress for the bees to be transportet like that and a lot of them die during the transport. Also the way in which they are transportet (several crowded hives in one transporter) fosters diseases and pests to spread, so... Cheung is making me cringe, too. This is basic ecological knowledge.
He forgot to mention that autism is an external cost to getting a flu shot (lolol)
Huh... maybe it's so obvious to me that destroying Herd Immunity is a Negative Externality ought to be Fined, because I'm not american...
¿How about being loud in the middle of the night?
A lack of sleep could reduce productivity. The CEO next door arrives an hour late, loosing a million dollar deal.
Should the money lost be payed back by the loud person?
Even if this person was having a schizophrenic meltdown?