3 ms·
1. If you can price the cost of the externality, you can justify optimizing it. 2. Monopolies and situations with the principal/agent dilemma are less sensitiv
by esafak 11mo ago
1. If you can price the cost of the externality, you can justify optimizing it.
2. Monopolies and situations with the principal/agent dilemma are less sensitive to such concerns.
- bawolff 11mo ago> 1. If you can price the cost of the externality, you can justify optimizing it. An externality is usually a cost you don't pay (or pay only a negligible amount of). I don't see how pricing it helps justify optimizing it.
- esafak 11mo agoYou are right. I should say perceived externality; there may be a price that is discounted.