Principles of Economics * When Markets Cannot Work Optimally * Adverse Selection
Somer Is Icumen in! (To Berkeley, at Least): Live from La Farine CIV: February 24, 2014

Econ 2: Spring 2014: UC Berkeley: Administrivia for February 24, 2014

Modes of Market Failure

Six modes of market failure:

  • Maldistribution
  • Miscalculation—which we will not cover
  • Externality
  • Non-rivalry
    • Market power
  • Adverse selection
  • Non-excludibility

Today We Are Going To Do...

Market Power

Adverse Selection


Problem Set 2

Errors in…

Due on Wednesday at start of lecture


Problem Set 3

Out tomorrow

Due on Wednesday March 5 at start of lecture


Sample Midterm

Out on Wednesday

Midterm will be Monday March 10

  • Bring blue books!
  • Bring pens!
  • Bring calculators!
  • Open book-open notes!

Further Reading

Ronald Coase, "The Nature of the Firm”

Martin Weitzman, "Prices vs. Quantities”


Books

Milton Friedman and Rose Director Friedman, Free to Choose

Tom Slee, Nobody Makes You Shop at WalMart


What We Do This Week

M Feb 24

W Feb 26

Sections

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