Download Document

Kapitel 2
„Marktversagen im Überblick“
(VL Theorie der WIPO)
WS 16/17
Prof. Dr. Thomas Wein
Kapitel 2.1 Monopol
Causes of a Monopoly
• The main reason monopolies exist is barriers to entry – factors that
prevent new firms from entering the market.
• Technical barriers to entry
• Diminishing average cost over a broad range of output like a natural
monopoly.
• Special knowledge of a low-cost method of production.
• Ownership of a key resource
• Possession of unique managerial talent.
• Legal barriers to entry.
• Patents and copyrights.
• Exclusive franchise or license.
3
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Profit Maximization in a Monopoly
Price
MC
P*
D
MR
Q*
Quantity
per week
4
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Economic Profits For A Monopoly
Price
MC
Since there are barriers to entry,
the monopolist can earn positive
profits even in the long run.
P*
AC
Profit > 0;
P > AC
D
MR
Q*
Quantity
per week
5
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
What’s Wrong With Monopoly
• There are two main criticisms of monopoly.
• Monopolies produce too little output: allocatively inefficient.
• There is a redistribution of wealth from consumers to “fat cat”
owners.
• The first criticism is true; the second may not be.
6
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
What’s Wrong With A Monopoly: Efficiency Effects
• Three things to consider:
• Compared to perfect competition, a monopoly produces less
output and charges a higher price.
• Some of the consumer surplus under perfect competition is
transferred to the monopolist.
• There is also a deadweight loss under monopoly.
7
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
What’s Wrong With A Monopoly: Efficiency Effects
Price
PM
Transfers from
consumers to firm
DWL
MC = AC
PPC
D
MR
QM
QPC
Quantity
per week
8
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Monopoly Profit Situations: Profit > 0
Price
MC
P*
AC
Profit > 0;
P > AC
D
MR
Q*
Quantity
per week
9
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Monopoly Profit Situations: Profit = 0
Price
MC
AC
P*
D
MR
Q*
Quantity
per week
10
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
What’s Wrong With A Monopoly: Efficiency Effects
• Why might the actual cost of a monopoly be higher than measured
by the DWL triangle?
• If the costs faced by the monopolist are higher than perfect
competition, DWL would be bigger.
• A monopoly may spend resources to maintain its market power
and long run profits: advertising, lobbying.
11
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Natural Monopolies and Regulation
• With a natural monopoly, average cost falls over the entire range of
output. Ignoring monopoly power, it would be efficient to have only
one firm producing the product.
• The solution is to regulate the market: allow only one firm but
regulate the price it charges.
• Marginal cost pricing.
• Two-Tier Pricing
• Rate of Return Pricing
12
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Natural Monopolies and Regulation: Marginal Cost Pricing
Price
$3
Unregulated
outcome
PA
Regulated
outcome
AC
PR
Economic Losses: P < AC
MC
MR
D
QA
QR
Quantity per week
13
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Natural Monopolies and Regulation: Two-Tier Pricing
Price
$3
One class of consumers
pay PA and demand QA.
PA
Another class pays PR
and demand QR -QA
AC
AC of QR
PR
MC
MR
D
QA
QR
Quantity per week
14
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Natural Monopolies and Regulation: Two-Tier Pricing
Price
Note that in this case the efficient level
of output is produced, although the
pricing is discriminatory.
$3
PA
Profits earned
from high price
consumers
AC of QR
PR
AC
Losses from low price
consumers
MR
MC
D
QA
QR
Quantity per week
15
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Natural Monopolies and Regulation: Rate of Return Regulation
• Under rate of return regulation the firm is allowed to set a price that
just allows it to cover its costs including a “fair” rate of return on
investment.
• Debate over what a “fair” return is.
• Incentive effects of allowing firms some rate of return.
• If the allowed return is greater than the competitive return, firms
have an incentive to use too much capital relative to what is cost
minimizing.
16
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Kapitel 2.2 Asymmetrische Information
Asymmetric information is a situation in which one party to a transaction has
more information than the other party.
Principal Agent Problem
• A principal “hires” an agent to perform some task, and the agent has
private information, either about her actions or her type.
• Employer-employee relationship:
• Employer (principal); employee (agent)
• A worker has full information about whether she is working hard
(action) or her job skills (type).
• How does an employer monitor/influence effort? How does a
potential employee signal their high quality type?
18
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Principal Agent Problem
• Moral hazard problem occurs when an agent’s action is private
information.
• Adverse selection problem occurs when an agent’s type is private
information.
• Automobile insurance
• When selling a policy the company does not know whether you
are a high risk or low risk driver (adverse selection)
• Since you are insured you are less careful (moral hazard)
19
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Moral Hazard: Manager’s Effort
• Shareholders (principal) hire a manager (agent) to run the firm.
• The manager’s effort cannot be perfectly observed by the
shareholders.
• The interests of the principal and agent are not the same.
• Shareholders need to design a contract that provides the manager
with the appropriate incentives.
20
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Nutzenunkenntnis
• Definition: Nutzen bestimmter Güter wird systematisch unterbzw. überschätzt
-> zuviel oder zuwenig nachgefragt
• Ursachen:
• nicht entscheidungsfähige Individuen
-> siehe Nichtrationalität Kapitel 5
• voller Nutzen eines Gutes offenbart sich erst nach dem
Konsum des Gutes
-> hier relevant
21
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Nutzenunkenntnis
•
•
•
Grundsätzlich bei Nutzenunkenntnis:
• Nachfrager fragen Informationen solange nach, bis Grenznutzen =
Grenzkosten
• Anbieter haben ein Interesse daran, über den Nutzen ihres Gutes zu
informieren, um mehr abzusetzen.
These: Besondere Probleme treten dann auf,
• wenn der Nutzen erst sehr spät anfällt und/oder
• wenn es sich um ein immaterielles Gut handelt
Beispiele:
• Gesundheitsvorsorge
• Einkommenssicherheit im Alter
• Bildung
22
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Nutzenunkenntnis
•
•
•
Bei Bildung viele Probleme:
• u.U. Nutzenunkenntnis
• Eltern müssen für ihre Kinder entscheiden
• Positive Externalitäten
• Unvollständiger Kapitalmarkt bei Bildungsinvestitionen
• "Verzerrte Präferenzen" im Sinne von Nicht-Rationalität
Fazit: Nutzenunkenntnis vermutlich nicht relevant
viel beklagte Unkenntnis Folge institutioneller Faktoren.
• Kein Anreize, sich zu informieren, da Anbieter garantierte Nachfrage
• Nachfrager geringe Wahlmöglichkeit
23
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Kapitel 2.3 Externalities and Public Goods
Externalities
• An externality is the effect of one party’s economic activity on
another party that is not taken into account by the price system.
• Externalities may be positive or negative.
• Externalities between firms.
• Externalities between firms and people.
• Externalities between people.
• Externalities are reciprocal in nature.
25
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Externalities and Allocational Efficiency
• How are resources inefficiently allocated when there are
externalities?
• For efficient allocation of resources what condition must be met?
• Price = social marginal cost of production (MSC)
• Social cost is the cost of production that includes both input costs
(private costs) plus the costs of the externality.
26
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Externalities and Allocational Efficiency
• A firm will maximize profits by producing at what point?
• Price = marginal private cost (MC)
• If production involves a negative externality the marginal social cost
is greater than the marginal private cost.
• Therefore, profit maximizing behavior (P=MC) will lead to too much
output being produced compared to the allocatively efficient
outcome (P=MSC).
27
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Externalities and Allocational Efficiency
MSC (social)
Price,
Costs
MC (private)
P*
q’
q*
Output
28
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Externalities and Allocational Efficiency
MSC (social)
Price,
Costs
MC (private)
Note that there is a net gain
to society. Consumer
spending on the good falls.
P*
By less than the reduction
in total social costs.
q’
q*
Output
29
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Pigouvan Tax
30
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Property Rights, Bargaining and the Coase Theorem
• What role can property rights and bargaining play in solving the
externality problem?
• Property rights are the legal specification of who owns a good and
the trades the owner is allowed to make with it.
• Common property is property that may be used by anyone without
cost.
• Private property is property that is owned by specific people who
may prevent others from using it.
31
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Property Rights, Bargaining and the Coase Theorem
• Costless Bargaining and Competitive Markets
• Assume that property rights to the clean air are given to one of
the firms, but bargaining over how the air is used is allowed.
• With bargaining it is possible that the two firms will achieve the
efficient level of output regardless of who “owns” the air.
32
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Property Rights, Bargaining and the Coase Theorem
• Laissez-faire-rule
33
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Property Rights, Bargaining and the Coase Theorem
• Liability-rule
34
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Property Rights, Bargaining and the Coase Theorem
• The Coase Theorem.
• If bargaining is costless, the social cost of an externality will be
taken into account by the parties, and the allocation of resources
will be the same no matter how property rights are assigned.
• One possible problem with this are distributional effects. How do
you equitably assign property rights?
• Another problem has to do with the role of transaction costs.
35
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Public Goods
• What are the characteristics of a public good?
• Nonexclusive goods are goods that provide benefits that no one can
be excluded from enjoying.
• National defense vs. a hamburger
• Nonrival goods are goods that additional consumers may use at
zero marginal cost.
• Crossing of a bridge during off-peak
• Public goods provide nonexclusive benefits to everyone in a group
and that can be provided to one more user at zero marginal cost.
36
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Types of Public Goods
Exclusive
Yes
Yes
No
Hot dogs,
Automobiles
Houses
Fishing ground
Public grazing land
Clean air
Bridges
Swimming pools
Scrambled satellite
signal
National defense
Mosquito control
Justice
Ideas
Rival
No
37
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Public Goods and Market Failure
• Why is there a market failure in the case of public goods?
• With a private good, the buyer gets the entire benefits from that
good.
• With a public good, the buyer won’t be able to receive the entire
benefits from that good since it is nonexcludable and nonrival.
• Societies benefits from the good outweigh the benefits to any
single buyer.
• Since these additional benefits are not accounted for, private
market will tend to produce too little of the good.
38
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Public Goods and Market Failure
Willingness to
pay
Total demand
Demand by Person 2
Demand by Person 1
Quantity of the
public good
39
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Public Goods and Market Failure
Willingness to
pay
What Q units are worth to society.
What Q units are worth to Person 2
What Q units are worth to Person 1
Q
Quantity of the
public good
40
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO
Literaturhinweise
• Nicholson, Walter/Snyder, Christopher/Luke, Peter/Wood/Michael
Luke (2008), Intermediate Microeconomics, London (Cengage
Learning), S. 373-382, 527-530, 565-584.
• Fritsch/Wein/Ewers (2007), S. 307-309.
41
Kapitel 2 "Grundzüge Marktversagen"
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
Prof. Dr. Thomas Wein, WIPO