23. Market Failures I: Externalities

[@hriatpuiachhakchuak8394]

You don't know how much this means to me, someone who's teachers abandoned because they cant teach like this, ... This taught me 4 semester's worth of knowledge in one hour. Our teachers abandoned online class and i think attending this lecture would make me into an actual economist

[@jai_jpg]

Huge respect for the Prof.! I can clearly see a pair of students talking and giggling.. He could ignore that and continue teaching, there is camera pointing at him and he needs to be correct at all times... Huge respect!! he is very experienced and a brilliant Prof!! Hands down!

[@41cata]

Gotta appreciate the repost! Thought I would have to listen with poor quality but this saved me.

[@Mvobrito]

Please release Video Lectures of 14.41!

[@ProWhitaker]

Thanks for trying to fix the audio

[@nathanielreichert4638]

I believe another example of when a father’s cigarette smoke is not an externality on the family is also when the entire family also smokes, right?

[@GauravKumar-fe3ky]

He glued me to the screen throughout the lesson

[@alanc497]

22:29 It's not just weird to pay people to correct what they have done in the first place, By paying the neighbour to remove the piles of dirt you incentivize the behavior to create problems for no reason just so that people would get a social benefit for removing them. I would be blasting music for the sole reason that I know that people would pay me to stop blasting music, it's basically bullying people until they give you their lunch, it's basically theft, it's basically torture. if you create a negative externality the burden to remove it is on you.

[@reidturnbull5756]

That’s behavioral economics

[@jasonleelawlight]

Exactly, I was thinking of this as well and I hope he had explained it in this way because it makes a lot more sense. Essentially it’s rewarding people for making negative externalities. We should not reward bad behavior, we should punish it.

[@lauhityaaashwinkumar]

This lecture helped a lot, thank you so much 💕

[@yassinejedir6547]

Can anyone recommend an article about a real event happening that describes the lecture mentioned in the video?

[@aleneabebe934]

You are really created for economics formidable şkill Excllent lectuf

[@marcospena7407]

Thank you so much for uploading these lectures, it really helps.

[@amybio1189]

This is amazing! Please do more videos like this :)

[@Mykindom2024]

I am enrolled at MIT

[@biloo]

amg önceki videoyu izledim başım ağrıyo sjsjsjjs

[@saddamgu]

Very interesting

[@md.kamalhossain4850]

Would suggest the related books?

[@mitocw]

There is no formal textbook for the course. If students are interested in further reading, they can look at the following book: Perloff, Jeffrey M. Microeconomics, 7th Edition. Addison-Wesley, 2012. ISBN: 9780133456912.

[@roberttrask6826]

Not making sense: does not all of the steel produced result in sludge being dumped?

[@hriatpuiachhakchuak8394]

Yeah, but the the sludge does not directly affect their production and market shares and sales, it affects the fishermen, fish, and the fishing industry , that would mean less fish , more sale of fish substitute, that means other food items will be more in demand and price of fish will rise, also this will effect the market , leading to inflation meaning thenprice of food grows, and that would mean people will spend lesser on construction that would lead to the lesser demand for steel, that would lead to lesser demand that leads to less production ... So by my theory it would level itself out eventually

[@kushverma662]

Robert basically the tradeoff is compensated, the social gain obtained from q* units of steel exceeds the harm inflicted on fish, no doubt there will still be sludge, but it'll be well within reasons

[@GOLDVIOLINbowofdeath]

Need English subtitles

[@mitocw]

It has English subtitles.

[@hriatpuiachhakchuak8394]

Turnnon captions

[@tomdavies8141]

@@mitocw These lectures are fantastic. Please would you consider uploading the lectures for 14.41?

[@ImVedanshAgarwal]

@@mitocw 14.41 AND BEHAVIORAL ECONOMICS

[@nirvairsinghsandhu7828]

the first view, the first comment. What are the other firsts? very insightful lecture

[@alankarshirsath6498]

Did he say fucking hole in the ozone layer? 43:30

[@nad56743]

Hahah "Questions about that" minute 37:16

[@RodrigoFar14]

This sounds a lot more like a central planning class than a economics one.

[@Mike36555]

only 10 degrees lol end of humanity lol

[@Mike36555]

blame china.

[@Ash-jm3pd]

@@Mike36555 whole countries under water, cities sunk, millions of refugees, etc. Costs will be objectively enormous.

[@kurtu5]

Causes damage to fishermen? Ok. Sue them. Now the steel company has a cost for sludge. No market failure.

[@kurtu5]

​@@borisibrahimovic5970 The prevention of tort via limited liability granted by the state is not a market failure, its a state failure. Tort claims would make the damages part of the cost of steel production, just as much as the price of ore would.

[@kurtu5]

@@borisibrahimovic5970 With out a state there is no such thing as deadweight loss.

[@Ash-jm3pd]

surely the (likely) poor fishermen will have the funds to carry out a lawsuit long enough to beat the steel company

[@kurtu5]

@@Ash-jm3pd That is not a market failure, but a failure of the state monopolistic legal system. With out protection against unlimited tort, your law firm can sue for costs and damages. If you have a case, your law firm will win, and you will win when your law firm wins.

[@jeff1ca]

OMG Dr. Gruber promoting freaking statins consumption... I just came for a course in externalities not a pharmaceutical propagation of allopathic medicine. Jeez.