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Well, for Pigouvian taxes to make sense, you first have to argue why in your specific situation Coasion bargaining breaks down. Similar to how, if you want to
by eru 1y ago
Well, for Pigouvian taxes to make sense, you first have to argue why in your specific situation Coasion bargaining breaks down.
Similar to how, if you want to use 'market failure' to justify your favourite government intervention, it actually comes with lots and lots of restrictions and only justifies a very narrow slice of possible interventions.
- croemer 1y agoThanks for reminding me of that, it's been a while since I read Varian's Micro textbook. There are lots of ways for Coase to break down. Lack of clear property rights, transaction costs etc