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Terms in this set (26)
What are the three components of pareto efficiency?
What is allocative efficiency?
What is consumptive efficiency?
What are the necessary conditions for price discrimination?
Market power to prevent competition, reselling is prohibited, prices that are segmented based on consumers' willingness to pay
What are first degree, second degree, and third degree price discrimination?
First degree: each consumers pays at exactly the price they are willing to pay
Second degree: non-linear pricing, sorts by quantities bought or time of sale
Third degree: Sorts by consumer group.
How will a monopolist decide the prices and quantities set in each market when segmenting?
What is an oligopolistic market structure?
A market with only a few sellers offering very similar or identical products
What are two types of cartel behavior that are considered illegal under U.S. law?
What are some examples of price fixing?
Bid rigging, customer allocation, agreeing to produce at a certain level
What are the rights granted by a patent? What are the traditional types of subject matter covered by patents?
The right to exclude others from making, using, offering for sale, selling, or importing the patented invention. The traditional types of subject matter covered by patents are machines, new technologies, manufactured products, and processes for manufacturing products.
What are the rights granted by copyrights?
The exclusive right to copy, distribute, reproduce, adapt, perform, or display their works.
What are two important differences between the protection granted by patents and copyrights?
List two reasons why licensing technology covered by a patent may be beneficial
1. Allows inventors to share intellectual property with others without giving up profits
2. Licensing can be needed to resolve blocking patents
List and explain two ways in which licensing can be used to restrict competition.
What are the three most common choice architecture paradigms?
What conditions need to be met for libertarian paternalism to be desirable?
Policymakers have to be confident about the optimal choices, individuals' best interests are uniform, and private choices have to have few negative social externalities.
What conditions need to be met for libertarian welfarism?
Individuals' decisions have high social externalities, and policymakers have to have a good understanding of the social utility function (to ensure that the costs of social welfare are borne by the people with the lowest private costs)
What conditions need to be met for decision simplification?
Private choices have to have modest social externalities that decrease their relevance in the social utility function, and individuals' best interests are highly heterogeneous.
What are the two ethical frameworks that need to be considered in evaluating public health policy nudges?
What are the five areas considered in the ethical framework?
Utility, justice, autonomy, legitimacy, transparency
What are four possible mechanisms underlying motivational crowding out?
SIgnaling, endogenous preference formation, learned self-helplessness, impaired self-determination
Give an example of three signaling effects
Image-spoiling, burden of the task, social norms surrounding task
What is decision utility?
What is experienced utility?
The pleasure and pain actually experienced after making a decision resulting from an outcome
What factors make cooperation in cartels more likely?
Small number of firms, repeated long-term interaction, ability to communicate.
What has been shown about the statistical properties of SWB measures?
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