Informational Barriers to Government Intervention on Externalities
A significant obstacle for governments seeking to address externalities is the lack of necessary information. This information may be entirely unavailable or it may be unverifiable in a court of law, which prevents its use in enforcing contracts. This problem is particularly acute when external effects are complex or difficult to measure, which undermines the ability to guarantee property rights and results in incomplete contracts. The case of DuPont's PFOA pollution is an example where the government lacked critical information to address the harm.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.10 Market successes and failures: The societal effects of private decisions - The Economy 2.0 Microeconomics @ CORE Econ
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